Use this free CD calculator to find out how much interest is earned on a CD.
Bankrate regularly surveys approximately 4,800 banks and credit unions in all 50 states to provide you with one of the most comprehensive comparisons of interest rates. All of the CD accounts below are insured by the FDIC at banks or the NCUA at credit unions. When selecting the best CD account for you, look for the highest yield while also considering introductory rates, minimum balances and accessibility.
Overview: Capital One is often associated with credit cards, but it also provides a range of depository and lending products to consumers through Capital One 360, an online banking subsidiary. Capital One 360 offers a wide range of CDs, a savings account, a savings IRA and a checking account. Yields from Capital One 360 tend to be highly competitive. In fact, CD rates from the bank are consistently among the top nationally available options. Along with stellar rates, Capital One's banking products come with the security of being insured by the Federal Deposit Insurance Corp.
Perks: High yields and low fees make CDs from Capital One 360 top contenders. And it offers a wide range of term options, from six months to 60 months. But Capital One also provides quality banking tools for money management and excellent customer service. In fact, it has a number of Capital One Cafes spread throughout the country, where you can go to bank, get answers to financial questions and connect with other people.
What to watch for: Capital One has limited branch access, other than Capital One Cafes, which are located in 10 states. Deposits and transfers are mainly done through the bank's mobile app. And while Capital One's CD rates are very competitive, it's often possible to find better yields from other banks.
Overview: Marcus is the consumer banking arm of investment firm Goldman Sachs. It offers a range of savings products and personal loans. That includes a number of CD options and a high-yield savings account. And like other online banks, its rates are highly competitive. Marcus often is found within the group of banks offering the highest CD rates across all terms. In fact, Marcus guarantees that you'll receive the highest rate it offers on a CD within 10 days of opening an account, as long as you deposit $500 during that time. So, if you purchase a CD and the bank's rate goes up within 10 days after you purchase, you'll receive the higher rate.
Perks: In addition to high yields, Marcus offers a wide range of terms on its CDs — from six months to six years — providing plenty of flexibility. And its 10-day guaranteed rate on CDs means you won't miss out on a higher return.
What to watch for: Because it's an online bank, Marcus doesn't have any branches. It also doesn't have a mobile app. That means you'll need to call customer service on weekdays or look at the FAQ section to get answers about your account. Marcus also doesn't offer a checking account. If you're looking for a full-service bank, you may be better served elsewhere.
Overview: Synchrony Bank, formerly known as GE Capital Retail Bank, offers a number of depository products for consumers, including CDs, money market accounts and savings accounts. As an online bank, it has limited branches. It also doesn't offer a checking account. But it does consistently offer some of the best rates available on CDs, with terms ranging from three months up to 60 months. And Synchrony has a highly rated customer service department available by online chat or by phone seven days per week. Customers of Synchrony get access to loyalty perks, including complimentary identity theft resolution services and travel and leisure discounts. "Diamond customers" get a dedicated customer service number, access to webinars, three free wire transfers per statement cycle and unlimited ATM reimbursements.
Perks: High rates are undeniably one of the biggest perks of CDs at Synchrony. But Synchrony also frequently offers CD specials that come with specialty terms. Those specials often come with high rates and provide an alternative to the typical CD terms. In addition, you'll find 24/7 online account management access, no monthly service fees and perks for being a customer.
What to watch for: Synchrony Bank isn't a full-service bank. It doesn't offer a checking account. That means you won't have much liquidity. But sometimes that can be a good thing, if you're looking to keep your hands off your cash while it grows.
Overview: Barclays is popular for its credit cards and personal loans, but it's also a strong contender in the category of deposit accounts. In fact, the bank offers a full suite of products, including a slew of online CDs and an online savings account. Its rates are competitive across the board. In the U.S., its banking operation is only online. That means Barclays can save on overhead costs and consistently pass that savings on to customers by offering some of the top available rates on CDs and savings accounts. The bank's CD terms range from three months to 60 months and require no minimum deposit, something that's hard to find out of a high-yield CD.
Perks: Very competitive interest rates, no minimum deposit requirement and daily compounding interest make CDs from Barclays hard to beat. You'll also get the benefit an online banking experience and no hidden monthly fees.
What to watch for: Barclays, like many other online-based banks, isn't a full-service banking institution. It doesn't have a checking account, ATM network, mobile app or branch locations. If you're comfortable banking online, and only want to use Barclays for its savings products, credit cards or personal loan features, it can be a good fit. Otherwise, you might want to look elsewhere. And though Barclays CD rates are very competitive, you may be able to lock in a higher rate from another online institutions.
Overview: Over the past several years, Ally Bank has become well-known for offering high-yield savings products to consumers. It not only offers a suite of high-yield CDs, including a raise-your-rate CD and no-penalty CD, it also provides an online savings account, money market account and a checking account. CDs terms from the bank range from three months to five years, offering some flexibility. In addition to its savings products, it also provides credit cards, auto financing, home loans and investment products. If you're searching for a full-service online banking experience, Ally is worth consideration.
Perks: Ally consistently offers some of the highest CD rates available. And it has tier levels for its CD terms according to your deposit. The more you deposit, the better your return. It also doesn't charge any maintenance fees and compounds interest daily.
What to watch for: Notably, Ally doesn't require a minimum deposit to open a CD. But you'll earn less. In order to earn the highest rate out of a CD at Ally, you'll need to put down a steep minimum deposit of $25,000. And while the top rates from Ally Bank are very competitive, you can often earn more with a smaller minimum deposit requirement from other online banks. That said, if you're looking for a full-service banking experience, you may be able to overlook the slightly lower rates and hefty minimum deposit requirement.
Overview: PenFed, or Pentagon Federal Credit Union, offers a wide range of savings products to its customers, including money market certificates, Coverdell Education certificates, checking, savings and even IRAs. That's in addition to offering auto financing, credit cards, mortgages and loans. The credit union serves more than 1.6 million members, including members of the U.S. military or uniformed services, employees of the U.S. government and other groups and associations. But membership is also open to those who join Voices for America ($17 per year) or the National Military Family Association ($17 donation). That makes it easy to join this national credit union, which typically offers some of the most competitive rates in the country.
Perks: It's often tough to beat the rates PenFed pays on its certificates. And it's a full-service credit union, making it a very attractive place to stash savings while taking care of other banking needs. If you prefer credit unions to banks, PenFed offers the credit union experience with a membership model that's available nationally.
What to watch for: The $1,000 minimum to open a certificate at PenFed is somewhat high. And although its membership is technically available nationwide, PenFed does require that you join via employment, association membership, through volunteerism or by military affiliation. So, you'll have to jump through some hoops in order to join. But the high rates you'll receive on CDs may be worth it.
Overview: PurePoint Financial is a hybrid digital bank and a division of MUFG Union Bank, N.A. PurePoint Financial is a member of the Mitsubishi UFJ Financial Group Inc, which according to PurePoint’s website is the fifth largest bank in the world, based on total assets. As PurePoint says on its website, "And while we’re a new brand, we’re not new to banking."
Perks: PurePoint Financial pledges "to help Americans save more and grow the personal savings rate in the U.S. over the next five years." PurePoint Financial also has more than 20 PurePoint Financial Centers in the New York, Chicago, Dallas, Houston, Miami, and Tampa Bay areas.
What to watch for: PurePoint Financial has a 2.80 APY 12-month CD that is among the most competitive CDs out there. If you have the $10,000 to meet the minimum deposit requirement, this might be a good place for your savings that you don’t plan on using for the next year.
Overview: CIT Bank is a nationwide direct bank, and is a division of CIT Bank, N.A. CIT Bank was founded in 2009. CIT Bank, N.A. is a subsidiary of CIT Group, Inc., a financial holding company founded in 1908.
Perks: CIT Bank’s 1-year CD currently is earning 2.50%. It also has daily compounding on that CD, to maximize your earnings.
What to watch for: CIT’s CD APYs peak at the 18-month CD at 2.50 APY. This, and the one-year CD, are the top CD options at this bank.
Overview: Citizens Financial Group, which has roots dating back to 1828 via High Street Bank, launched Citizens Access – its direct bank – in July. Citizens Access debuted among some of the highest-yielding accounts and is still near the top of the leaderboard.
Perks: Citizens Access takes pride in its fee-free approach. Its CDs also give you the option of having your interest credited toward your principal or you can transfer it to another account.
What to watch for: The Citizens Access 6-month CD has one of the top APY’s around.
Continue reading for more information on certificates of deposit. Bankrate regularly analyzes banks, gets insights from top financial experts, and compiles industry data to provide the information you need to make an informed financial decision.
Our team has also interviewed financial professionals to give you expert advice on choosing the best CD rates. Check out tips below from experts like Greg McBride, Stewart Welch, and Dana Twight.
A CD is a Certificate of Deposit, which is a type of savings account, found at banks and credit unions, that pays a set interest rate on money deposited. In exchange, you agree to keep the full deposit in the account for a set term. Common terms include 6, 12, 18, 24, 36, 48 and 60 months.
Generally, the longer the term, the higher the interest rate. CDs with higher APY rates give you a better yield on your deposited money. Just be sure to consider factors like minimum deposit requirements and monthly fees when choosing the best CD rate for your financial goals.
The biggest risk associated with traditional CD accounts is the penalty institutions charge for withdrawing money before the CD's maturity date. Early withdrawal penalties can often eat up any interest earned and some of the principal investment.
But overall, certificates of deposit are a safe place to stash cash. They are insured up to $250,000 at banks by the Federal Deposit Insurance Corp. and at credit unions by the National Credit Union Administration.
In addition to traditional CDs, some institutions offer specialty CD rate options. These can include jumbo CDs, bump-up CDs, liquid CDs, callable CDs and zero-coupon CDs.
A certificate of deposit (CD) is a savings account found at banks and credit unions where you can deposit money for a predetermined amount of time and earn interest on those funds. The interest is usually compounded and added to the principal. One of the reasons you get a higher annual percentage yield (APY) is because the bank knows how long you’ll be keeping your money in its CD. And if you withdraw before that time, you may incur a penalty. CDs are popular accounts for longer-term money. Typical CD lengths are 6, 12, 18, 24, 36, 48 and 60 months.
Choose your CD length wisely. The duration of CD accounts typically determines the rate; the longer the term, the better your CD interest rate will be. Luckily, CD rates come in a wide variety of terms, from a 1-year CD that offers a 2.25% APY with no minimum deposit to a 5-year CD rate that offers a 2.85% APY with a $2,000 minimum amount.
A fixed-rate CD is a good product for those who don’t like surprises – and want to know their rate of return beforehand. Because they’re low-risk investments, CDs tend to be associated with older, more risk-averse savers preparing for retirement. But people of different ages can benefit from sticking some of their savings into a CD.
A CD could be a good place to store money you’re setting aside for a specific goal, like saving for a down payment on a house or a new car. Tying up money in a CD for 12 months or two years could be one way to stop yourself from dipping into your savings prematurely. A CD could also be a good place for an emergency fund, says Stewart Welch, founder and senior member at the Welch Group, a fee-only investment management and financial planning firm. CDs are best for meeting short-term financial goals. Due to inflation, using a CD to build wealth over time won’t work in your favor.
“This is why I wouldn’t even recommend that a retiree puts all their money in CDs,” says Dana Twight, founder and principal of Twight Financial Education. “Some of your money has to be positioned so that you will beat inflation. And traditionally, the way to do that is a balanced approach to the stock market.”
A CD is a bad investment for a person who needs the money to be liquid or someone that needs the funds during the term of the CD. This may result in a penalty that will erase interest earnings and may even eat into principal.
CDs are good for small investors because you don’t need a large minimum deposit to open one and they can offer competitive yields. Currently, there are CD options that have no minimum deposit requirement.
CDs are perfect for the investor who has a low-risk tolerance and wants a fixed rate of return. CDs usually have fixed rates for the term, but there are some exceptions. For instance, step-up CDs usually start with a lower APY and gradually increase on an annual basis. Some banks, meanwhile, offer variable-rate CDs.
"A certificate of deposit is a fine choice if you have a specific cash need at a future date. Invest your money with complete safety, a known return and a defined time frame for when you’ll get that money. Seek out the top yields on the maturity that suits your timetable."
- Greg McBride, CFA, Bankrate’s chief financial analyst.
Fixed-rate CDs are safe because if you keep your money in them for the full term, you know your principal is never in jeopardy. They’re also safe if they’re at a Federal Deposit Insurance Corp. (FDIC) bank or a National Credit Union Administration (NCUA) institution. FDIC deposit insurance covers accounts at FDIC banks up to at least $250,000. An account at an NCUA institution has a standard share insurance amount of $250,000 per share owner, per insured credit union, for each account ownership category.
Choosing the best CD rate can be tricky, but it is certainly not impossible. There are thousands of banks out there, each with multiple CD term options offering different APY rates with varying minimum deposits and fees. Bankrate is here to help you choose the best CD rate for your savings and spending needs.
If you’re looking for CDs with the highest yield, your best bet is to compare rates offered by online banks. Banks without hefty overhead costs can pass their savings on to customers in the form of higher yields. Many credit unions also offer competitive CD rates. Chances are the highest CD yields are several times higher than the ones your existing bank offers.
"Don’t trust your local bank to have the highest rates. You definitely need to do the research."
- Stewart Welch, Welch Group
In addition to the interest rate, consider other important factors before choosing a CD, such as whether you can deposit enough money to earn the top yield. You should also think about how soon you’ll need the money you want to leave inside of a CD. If you need the money in three or six months, for example, keeping it in a savings account is a better idea.
The best CDs don’t have a harsh early withdrawal penalty. (Typically, you stand to lose about six months’ interest.) They also allow interest to compound daily rather than monthly, allowing your savings to grow faster.
Compare CDs to get the highest APY and determine when you’ll realistically need to use the funds. An early withdrawal penalty can quickly wipe out any gains – and could potentially take a portion of your principal. For emergencies, keep an adequate amount of money in a liquid savings account and use this money first. This may protect you from incurring early withdrawal CD penalties. Choosing the shortest term that gives you the best rate is the recommended strategy.
"In a rising rate environment, favor shorter maturities that give you the ability to earn a competitive return now but to reinvest at even better yields later."
- Greg McBride, CFA, Bankrate’s chief financial analyst.
All of the CD accounts below are insured by the FDIC at banks or the NCUA at credit unions. Find the best CD rates for you by considering the annual percentage yield (APY), term, minimum deposit required and the penalty charged for early withdrawal. Our goal is to help you make the safest financial decision possible.
You can typically earn a higher APY with a CD than most savings accounts or money market accounts. That interest is usually compounded on a daily, monthly, quarterly or annual basis. It is usually credited to your account on a monthly, quarterly, semiannual or annual basis. You can re-evaluate the CD after the term expires. You usually have a grace period between the CD’s maturity date and renewal date. This allows you to renew it, change the terms or withdraw and close it. You usually can’t add money to CDs until they mature. In most cases, can withdraw from a CD at any time, but this may result in an early withdrawal penalty. So this is something to avoid, if possible.
Yes, you are taxed on the interest earned on a CD that contains non-qualified money – money that you already paid income tax on. However, if the money is in a traditional IRA CD, you will pay taxes when the money is withdrawn. This is because traditional IRAs are tax-deferred accounts. If the money is in a CD that is a Roth IRA, you’ll pay taxes upfront.
The average interest on a CD varies by term. Typically, shorter-term CDs have lower rates than longer-term CDs.
Here are the current average rates for the week of December 5, 2018, according to Bankrate's weekly survey of institutions:
|CD Term||CD Rate National Average|
Note that those are average rates. See the table at the top of the page for rate comparisons.
The "Bankrate.com National Average," or "national survey of large lenders," is conducted weekly. The results of this survey are quoted in our weekly articles and national media outlets. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We've conducted this survey in the same manner for more than 30 years, and because it's consistently done the way it is, it gives an accurate national apples-to-apples comparison.
Traditional CDs come with a fixed interest rate that's locked in for the entire term. While it's possible to withdraw money before the CD's maturity date, most institutions have stiff early withdrawal penalties for doing so. That makes it wise to keep the full deposit in the CD account until the term is completed.
However, some banks and credit unions offer specialty CDs that allow some flexibility. One such CD is a liquid CD account, which provides the option to withdraw money without incurring a penalty. The interest rate paid on liquid CDs, and similar types of CDs, is typically lower than that of a traditional CD.
The interest gained on a CD will be taxed for that tax year if it’s non-qualified money. A traditional IRA is taxed-deferred, and a Roth IRA is taxed upfront. Tax-deferred means the taxes will be paid upon withdrawal. A portion of your retirement money in CDs may help diversify your portfolio. This may be a good option for money that you don’t want in a fluctuating investment product. Not all CDs can be IRAs, so check with your financial institution.
Savings and money market accounts are more liquid than CDs. That means the funds you store in those types of accounts are easier to access. You could withdraw the savings you’ve stashed in a CD, but be prepared to pay a penalty (unless you’ve purchased a no-penalty CD).
The gap between rates tied to CDs and savings accounts has narrowed. But CDs are more likely to pay a higher yield. While the best nationally available savings account rate is 2.25 percent APY, the most you can earn on a 5-year CD offered in all 50 states is 3.47 percent APY.
Laddering is a method to space out maturity dates on your CDs. It’s a way to both spread out when the money is available and protect yourself from being stuck in a long-term product if rates skyrocket. For instance, a CD laddering plan of three CDs might have a 1-year CD, a 2-year CD and a 3-year CD.
"Looking for a regular stream of interest income? Consider a CD ladder where your money is diversified over a range of maturity dates, structured so you get to reinvest at consistent intervals."
- Greg McBride, CFA, Bankrate’s chief financial analyst.
Generally, the longer your CD term, the higher your rate of return. One way to grow your savings and earn as much interest as possible is to build a CD ladder. You could buy several CDs with different term lengths at one time, giving you the chance to invest in a long-term CD with a higher yield and short-term CDs that will mature within a short period of time.
CD laddering can also shield you from interest rate changes. If rates are rising, you’ll be able to take advantage of higher yields when your short-term CDs mature. And if interest rates are falling, you’ll be happy that you locked up your savings when your bank was paying a higher rate. Consider keeping your CD ladder short during a rising interest rate environment and long when rates are moving in the opposite direction.
"When rates are declining, you want to go long on your ladder because then you want to tie up that high rate for the longest period of time."
- Dana Twight, Twight Financial Education
The experts at Bankrate have compiled our best available CD rates into an easy-to-read table so you can compare rates and minimum deposits across banks.
|Term||Bank||CD Rate (APY)||Minimum Deposit|
|6 months||PenFed Credit Union||2.40%||$1,000|
|18 months||Goldman Sachs Bank USA||2.65%||$500|
|2 years||Sallie Mae||2.90%||$2,500|
|3 years||Capital One||2.80%||$0|
|4 years||Citizens Access||3.10%||$5,000|
|5 years||PenFed Credit Union||3.50%||$1,000|
Bankrate has provided a quick-hit comparison of some top banks that offer competitive CD rate options so that you can see rates side-by-side before choosing the best CD for your financial goals.
Check out the tables below for a breakdown of Bankrate's available CD rates for these financial institutions. Be sure to factor in minimum deposit amounts and other fees when applying for a certificate of deposit.
Use this free CD calculator to find out how much interest is earned on a CD.
Find out how to maximize returns on your CD with CD laddering.
Find out if you are you on track to reachings your investment goal?
Use this simple savings calculator to estimate your investment growth over time.