Best CD Rates for February 2020

Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.

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Finding the best CD rates can be complicated with the endless offers on the market. But you’ll quickly find the right CD for you by comparing rates from our hand-picked list. Check out our just released 2020 picks below to learn more.

Rates as of Feb. 13, 2020
Best CD rates for 2020
CD Offer APY Term Min. Deposit Next Steps
Ally High Yield CD Member, FDIC APY-5 Year: 2.15% Term: 5 Year Min. Deposit: $0
Ally High Yield CD Member, FDIC APY-2 Year: 2.05% Term: 2 Year Min. Deposit: $0
Ally High Yield CD Member, FDIC APY-1 Year: 2.00% Term: 1 Year Min. Deposit: $0
Ally High Yield CD Member, FDIC APY-6 Month: 1.00% Term: 6 Month Min. Deposit: $0
American Express High Yield CD Member, FDIC APY-5 Year: 2.15% Term: 5 Year Min. Deposit: $0
Logo for American Express High Yield CD

American Express High Yield CD

Member, FDIC
APY-4 Year: 2.10% Term: 4 Year Min. Deposit: $0
Logo for American Express High Yield CD

American Express High Yield CD

Member, FDIC
APY-3 Year: 2.05% Term: 3 Year Min. Deposit: $0
Logo for American Express High Yield CD

American Express High Yield CD

Member, FDIC
APY-2 Year: 2.00% Term: 2 Year Min. Deposit: $0
Logo for American Express High Yield CD

American Express High Yield CD

Member, FDIC
APY-1.5 Year: 1.80% Term: 1.5 Year Min. Deposit: $0
Logo for American Express High Yield CD

American Express High Yield CD

Member, FDIC
APY-1 Year: 0.55% Term: 1 Year Min. Deposit: $0
Logo for American Express High Yield CD

American Express High Yield CD

Member, FDIC
APY-6 Month: 0.40% Term: 6 Month Min. Deposit: $0
Barclays Online CD Member, FDIC APY-5 Year: 2.10% Term: 5 Year Min. Deposit: $0
Logo for Barclays Online CD

Barclays Online CD

Member, FDIC
APY-4 Year: 2.00% Term: 4 Year Min. Deposit: $0
Logo for Barclays Online CD

Barclays Online CD

Member, FDIC
APY-3 Year: 2.00% Term: 3 Year Min. Deposit: $0
Logo for Barclays Online CD

Barclays Online CD

Member, FDIC
APY-2 Year: 2.00% Term: 2 Year Min. Deposit: $0
Logo for Barclays Online CD

Barclays Online CD

Member, FDIC
APY-1.5 Year: 2.00% Term: 1.5 Year Min. Deposit: $0
Logo for Barclays Online CD

Barclays Online CD

Member, FDIC
APY-1 Year: 2.00% Term: 1 Year Min. Deposit: $0
Logo for Barclays Online CD

Barclays Online CD

Member, FDIC
APY-6 Month: 0.65% Term: 6 Month Min. Deposit: $0
Logo for Capital One 360 CD

Capital One 360 CD

Member, FDIC
APY-5 Year: 1.60% Term: 5 Year Min. Deposit:
Logo for Capital One 360 CD

Capital One 360 CD

Member, FDIC
APY-2 Year: 1.80% Term: 2 Year Min. Deposit:
Logo for Capital One 360 CD

Capital One 360 CD

Member, FDIC
APY-1 Year: 2.00% Term: 1 Year Min. Deposit:
Discover High Yield CD Member, FDIC APY-5 Year: 2.10% Term: 5 Year Min. Deposit: $2,500
Discover High Yield CD Member, FDIC APY-4 Year: 2.05% Term: 4 Year Min. Deposit: $2,500
Discover High Yield CD Member, FDIC APY-3 Year: 2.05% Term: 3 Year Min. Deposit: $2,500
Discover High Yield CD Member, FDIC APY-2 Year: 2.05% Term: 2 Year Min. Deposit: $2,500
Discover High Yield CD Member, FDIC APY-1.5 Year: 2.00% Term: 1.5 Year Min. Deposit: $2,500
Discover High Yield CD Member, FDIC APY-1 Year: 2.00% Term: 1 Year Min. Deposit: $2,500
Discover High Yield CD Member, FDIC APY-6 Month: 0.65% Term: 6 Month Min. Deposit: $2,500
Marcus by Goldman Sachs High Yield CD Goldman Sachs Bank USA Member, FDIC APY-5 Year: 2.25% Term: 5 Year Min. Deposit: $500
Logo for Marcus by Goldman Sachs High Yield CD

Marcus by Goldman Sachs High Yield CD

Goldman Sachs Bank USA Member, FDIC
APY-4 Year: 2.10% Term: 4 Year Min. Deposit: $500
Logo for Marcus by Goldman Sachs High Yield CD

Marcus by Goldman Sachs High Yield CD

Goldman Sachs Bank USA Member, FDIC
APY-3 Year: 2.10% Term: 3 Year Min. Deposit: $500
Logo for Marcus by Goldman Sachs High Yield CD

Marcus by Goldman Sachs High Yield CD

Goldman Sachs Bank USA Member, FDIC
APY-2 Year: 2.10% Term: 2 Year Min. Deposit: $500
Logo for Marcus by Goldman Sachs High Yield CD

Marcus by Goldman Sachs High Yield CD

Goldman Sachs Bank USA Member, FDIC
APY-1.5 Year: 2.05% Term: 1.5 Year Min. Deposit: $500
Logo for Marcus by Goldman Sachs High Yield CD

Marcus by Goldman Sachs High Yield CD

Goldman Sachs Bank USA Member, FDIC
APY-1 Year: 2.15% Term: 1 Year Min. Deposit: $500
Logo for Marcus by Goldman Sachs High Yield CD

Marcus by Goldman Sachs High Yield CD

Goldman Sachs Bank USA Member, FDIC
APY-6 Month: 0.60% Term: 6 Month Min. Deposit: $500
Sallie Mae Member, FDIC APY-5 Year: 2.20% Term: 5 Year Min. Deposit: $2,500
Logo for Sallie Mae

Sallie Mae

Member, FDIC
APY-2 Year: 2.15% Term: 2 Year Min. Deposit: $2,500
Logo for Sallie Mae

Sallie Mae

Member, FDIC
APY-1 Year: 2.10% Term: 1 Year Min. Deposit: $2,500
Synchrony Online CD Member, FDIC APY-5 Year: 2.15% Term: 5 Year Min. Deposit: $2,000
Logo for Synchrony Online CD

Synchrony Online CD

Member, FDIC
APY-2 Year: 2.10% Term: 2 Year Min. Deposit: $2,000
Logo for Synchrony Online CD

Synchrony Online CD

Member, FDIC
APY-1 Year: 2.00% Term: 1 Year Min. Deposit: $2,000
TIAA Bank Yield Pledge® CD Member, FDIC APY-5 Year: 2.10% Term: 5 Year Min. Deposit: $5,000
Logo for TIAA Bank Yield Pledge® CD

TIAA Bank Yield Pledge® CD

Member, FDIC
APY-3 Year: 2.05% Term: 3 Year Min. Deposit: $5,000
Logo for TIAA Bank Yield Pledge® CD

TIAA Bank Yield Pledge® CD

Member, FDIC
APY-1 Year: 1.95% Term: 1 Year Min. Deposit: $5,000
Discover High Yield CD

What we like -- This CD family is an appealing no-fuss, no-muss option. Discover charges almost no fees or penalties, save for a $30 wire transfer fee and typical early withdrawal penalties. Discover is also a very reachable company should any difficulty arise; it maintains a 24/7, toll-free help line for its clients. These features help justify the slightly lower APYs of its CDs compared to various rivals.

CD Rates - Minimum Deposit: $2,500
6 Month APY 1 Year APY 1.5 Year APY 2 Year APY 3 Year APY 4 Year APY 5 Year APY
0.65% 2.00% 2.00% 2.05% 2.05% 2.05% 2.10%
Marcus by Goldman Sachs High Yield CD

What we like -- A good source of high-yielding CDs is Marcus by Goldman Sachs, the upstart financial services division of the storied investment bank. Marcus by Goldman Sachs is tied for the highest headline 5-year APY among our selections, and offers CD terms from six months to six years. For a bank that offers such high APYs, its minimum is relatively low -- investors can open a CD for as little as $500. And similar to Ally, Marcus by Goldman Sachs has a 10-day guaranteed rate that ensures the top APY the bank offers if a new CD receives funding of $500 within that stretch of time.

CD Rates - Minimum Deposit: $500
6 Month APY 1 Year APY 1.5 Year APY 2 Year APY 3 Year APY 4 Year APY 5 Year APY
0.60% 2.15% 2.05% 2.10% 2.10% 2.10% 2.25%
Ally High Yield CD

What we like -- A distinguishing feature of Ally CDs is their tiers, the highest of which earns handsomely. Deposits under $5,000 -- there is no minimum -- earn the lowest of the three rates (below), those between $5,000 and $25,000 earn at the middle rate, while deposits above $25,000 garner the highest APY. No matter the deposit amount, the Ally Ten Day Best Rate Guarantee is in force for every new CD -- if an Ally CD is funded within 10 days of the open date, says the company, “you’ll get the best rate we offer for your term and balance tier if our rate goes up within that time.” This also applies to CDs being renewed.

CD Rates - Minimum Deposit: $0
6 Month APY 1 Year APY 1.5 Year APY 2 Year APY 3 Year APY 4 Year APY 5 Year APY
1.00% 2.00% -- 2.05% -- -- 2.15%
American Express High Yield CD

What we like -- Consolidating your accounts with a single bank simplifies managing your finances and that's one of the biggest draws to opening a CD with American Express. You can select from an array of maturities ranging from six months to five years. Savers wanting to secure the best rates should consider American Express's CD's with maturities starting at 18 months since other online banks offer better rates over shorter terms.

CD Rates - Minimum Deposit: $0
6 Month APY 1 Year APY 1.5 Year APY 2 Year APY 3 Year APY 4 Year APY 5 Year APY
0.40% 0.55% 1.80% 2.00% 2.05% 2.10% 2.15%
Synchrony Online CD

What we like -- Not only does Synchrony consistently offer some of the best cd rates but it also has a rare, lenient policy for early withdrawals. Regardless of term you can pocket the interest from Synchrony CDs at will -- the bank charges no penalties at all for withdrawing CD interest. This can be done at any time the client desires.

CD Rates - Minimum Deposit: $2,000
6 Month APY 1 Year APY 1.5 Year APY 2 Year APY 3 Year APY 4 Year APY 5 Year APY
-- 2.00% -- 2.10% -- -- 2.15%
Barclays Online CD

What we like -- These CDs have no minimum deposit, making them a fine choice for those on a limited investment budget. Even though there is no minimum deposit, the bank still offers very competitive rates for its 1-, 2-, and 5-year CDs. Customers can opt to receive interest disbursements every month, and can transfer those disbursements to a Barclays Online Savings Account, should they have one.

CD Rates - Minimum Deposit: $0
6 Month APY 1 Year APY 1.5 Year APY 2 Year APY 3 Year APY 4 Year APY 5 Year APY
0.65% 2.00% 2.00% 2.00% 2.00% 2.00% 2.10%
TIAA Bank Yield Pledge® CD

What we like -- TIAA Bank seems determined to provide some of the highest APYs around for its CDs. The company’s titular Yield Pledge CDs carry a guarantee that new, renewed, or rolled over EverBank CDs will be in the top 5% of “competitive accounts”. That’s a powerful inducement, especially considering that TIAA Bank CDs already boast some of the highest headline APYs among competitors.

CD Rates - Minimum Deposit: $5,000
6 Month APY 1 Year APY 1.5 Year APY 2 Year APY 3 Year APY 4 Year APY 5 Year APY
-- 1.95% -- -- 2.05% -- 2.10%
Sallie Mae

What we like -- Sallie Mae offers competitive APYs across the board, particularly at the shorter-term end of the spectrum. Sallie Mae CDs also carry no monthly fees, and investors can opt for automatic renewal to save them the trouble of manually rolling over their CDs. Five years is the maximum term from this issuer; the minimum is six months.

CD Rates - Minimum Deposit: $2,500
6 Month APY 1 Year APY 1.5 Year APY 2 Year APY 3 Year APY 4 Year APY 5 Year APY
-- 2.10% -- 2.15% -- -- 2.20%
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The certificate of deposit (CD) is one of the most durable and popular banking products on the scene. It’s been a favorite option of many bank clients who are drawn to its simplicity, not to mention the attraction of earning an easy buck on their funds.

With the emergence of online banking, competition for consumers' savings has never been higher. You can get dizzy sifting through the galaxy of high-yield CD accounts available on the U.S. market today. The good news is that this competition has resulted in relatively high APYs compared to what has been available from traditional bank.

We’re here to help with a distillation of the best CD rates currently on offer. For those who are new to CDs or simply need a refresher, we’ll run through some of the basics, and the pros and cons of holding a CD account as well.

How do CD accounts work?

A certificate of deposit is a type of savings account that requires the account holder to leave their funds on deposit for a certain length of time. For this reason, CDs are also commonly called “time deposits.”

With a CD, you leave your money on deposit for a certain amount of time. In exchange, banks pay higher interest rates on CDs than they do on savings and interest-bearing checking accounts. CD interest rates are generally expressed as annual percentage yield, which shows the annual interest account holders receive.

To be perfectly clear, you aren’t prohibited from withdrawing your money early from a CD. However, if you do withdraw your money early, you’re likely to face an early withdrawal penalty -- generally a certain number of months’ worth of interest.

There are some subtypes of CDs that are also worth knowing about:

  • Jumbo CDs: This refers to CDs with more than $100,000 in the account. This often entitles the depositor to a higher interest rate than a standard CD. Since jumbo CDs represent a lot of guaranteed money, banks are typically willing to pay a bit more.
  • No-penalty CDs: Some banks offer CDs that don’t charge early-withdrawal penalties. It’s important to realize that this essentially makes them high-yield savings accounts. Their interest rates are generally comparable with leading savings accounts (and lower than typical CDs).
  • Bump-up CDs: Most CDs come with interest rates that are constant for the entire term. However, some banks offer bump-up CDs, which allow you to change your interest rate to the prevailing rate once during the term. For example, if you get a five-year CD with a 3.00% APY and a year from now your bank is offering five-year CDs with a 4.00% APY, you can exercise your option to switch to the new rate instead.

How are CD rates determined?

There are three main variables that determine CD interest rates: Prevailing market interest rates, the financial institutions offering CDs, and the maturity length of the CD.

Generally speaking, when short-term interest rates -- such as the federal funds rate -- increase, we can expect CD interest rates to rise.

Having said that, variance among financial institutions can be massive. Specifically, the CD rates offered by brick-and-mortar banks are typically far lower than those offered by leading online banks. It’s not uncommon to find smaller branch-based banks or credit unions that offer CD rates that are competitive with online banks. But large banks tend to offer the lowest rates in the industry.

Within each financial institution, the interest rates offered are typically highest for CDs with the longest maturities. For example, if you look at the CD rates offered by an online bank, you can generally expect a five-year CD to pay a higher APY than a one-year CD.

Do CDs pay interest monthly or annually?

CDs typically pay interest to your account every month. And many banks give you the option of having your interest added to the principal balance or distributed to you.

There are advantages to both arrangements. If you add your monthly interest to your CD’s principal balance, your interest will compound over time and maximize your returns.

Imagine that you have $10,000 in a certificate of deposit account and you get $25 in interest this month. By adding it to the principal, your next interest payment will be based on $10,025. Initially, this doesn’t make a big difference, but it can have quite an impact over a period of several years.

On the other hand, if you want income from your CD, taking distributions could be a good way to create an income stream and take advantage of the high interest rates offered by CDs. This is an especially common option among retirees who need some income.

Top CD rates vs. other bank accounts

The best one-year CD among top banks is 2.10% APY of December, 2019. The best online savings account has an APY of 2.05% -- in the ballpark, but not as attractive. The best checking accounts trail by a large margin with at a 1.25% rate.

Of course, these will change over time and may be significantly different by the time you read this. But the general relationship between these three account types and their APRs is typical.

Of course, there’s a reason for this. Checking accounts are the least restrictive of the three main types of bank accounts -- you're free to withdraw money from the account as often as you’d like. Savings account allow withdrawals, but generally cap them at six per month. And CDs only allow withdrawals once the maturity date is reached.

Can you lose money in a CD?

As long as your CD is opened with an FDIC-insured bank, you don’t need to worry about losing money. However, you can lose money if you end up needing the money in your CD before its maturity date arrives.

Most banks have an early withdrawal penalty that requires the account owner to forfeit a certain number of months’ worth of interest. The number generally varies based on the term length.

For example, a bank might charge an early withdrawal penalty equal to three months of interest for CDs with maturity terms of three months to one year and 12 months of interest for CDs with maturity terms greater than one year. So if you need to withdraw your money very early in the account’s lifespan, you could take a loss.

What are the advantages and disadvantages of CD accounts?

There’s no such thing as a financial product that’s perfect for everyone, and CDs aren't an exception. There are advantages and disadvantages to consider before putting your money in a certificate of deposit.

Advantages of a CD

  • Higher interest rates: CDs offer higher interest rates than comparable checking and savings accounts. As I write this, the best one-year CD APY is 0.5% higher than the best high-yield savings account.
  • Fixed interest rate: This is both an advantage and a disadvantage. Your CD generally comes with an APY that stays the same for the entire maturity term, even if market interest rates drop. In contrast, if you put your money in a savings account, your interest rate can potentially fall, depending on market conditions.
  • Risk-free returns: Assuming your CD is smaller than the FDIC insurance limit, it's essentially a risk-free account. It’s tough to find higher returns than CDs offer if you don’t want to take on any risk.
  • No fees: Unlike some savings accounts, CDs generally don’t charge maintenance fees.

Disadvantages of a CD

  • Fixed interest rate: This can be a good or bad thing. For example, if you get a five-year CD with a 3.0% APR and the bank’s five-year CD rate jumps to 5% a year later, you’ll still get the lower rate that you agreed to (unless you got a bump-up CD).
  • Time commitment: When you open a CD, you commit to leaving your money on deposit for a certain length of time. If you need flexibility with your money, a CD might not be the best option for you.
  • Higher minimums: CDs are more likely than checking and savings accounts to have a minimum opening deposit. These vary, but minimums in the $500–$2,500 range are common.

Do you have to pay taxes on a CD when it matures?

Unless you open your CD within a tax-advantaged retirement account like an IRA, the interest you receive from your CD is considered “interest income.” And that's taxable.

Legally, any interest you receive is taxable and needs to be reported to the IRS -- even if it’s just a few dollars. You generally won’t receive a tax form documenting your interest unless you earned more than $10 during the year, but you’re still required to report it.

Can you withdraw money from a CD account?

The short answer is yes, but you don’t want to. Since a CD is meant to be a full commitment of funds over the accepted term, you’ll get socked with penalties if you decide to draw from the well.

These fines are usually considerable and typically consist of forfeiting a certain amount of interest. Here’s a sample of penalties for making an early withdrawal based on your holding period. These fees are more or less typical across the banking sector:

Term Penalty for early withdrawal
Less than 3 months 1 month’s interest
3 months through 12 months 3 months’ interest
Over 12 months through 24 months 6 months’ interest
Over 24 months 12 months’ interest

FAQs

  • A CD account is an instrument for saving and growing money. The concept is very straightforward; when we put money into a CD, we basically agree to “lock up” that money in the account for a set time period. This period is called the term. Because of this structure, CDs are also referred to as "time deposits."

    Of course, we’re not doing this to make a charitable donation to a financial institution. Money in a CD earns interest, the rate of which depends on how generous the bank is and the length of the term.

    All things being equal, longer terms -- because you’re agreeing to stash away your money for more time -- earn at higher rates.

    Available terms, again, depend on the lender. For the most part they tend to range from three months to five years, although it’s possible to find shorter and longer terms on either side of that range.

    It’s common for CD accounts to be fixed-rate, meaning that their interest rate is in force for the full term. There are variations on this foundational type of CD, including:

    Step-up CD -- In many ways the opposite of a fixed-rate CD, the step-up’s interest rate rises according to a schedule set by the seller.

    Bump-up CD -- A bump-up CD is related to the step-up CD. It’s more limited, though, with the account owner holding the right to request one interest rate increase per term.

    Jumbo CD -- A CD account holding $100,000 or more is considered jumbo. Banks often offer higher interest rates to depositors with high balances.

  • CDs are ideal for money that you can’t afford to lose, but that you don’t need at the moment.

    A CD could be a good choice if you have cash set aside for specific expenses and you don’t foresee needing it for a certain length of time.

  • Yes and no. If the institution you open a CD with is an FDIC-insured bank, your CDs are perfectly safe up to $250,000 per institution and account holder. In the event of a bank failure, the FDIC will step in and make sure you get your money back. In the sense of “can you lose your money?”, a CD is a very safe investment.

    On the other hand, that doesn’t mean a CD is a risk-free investment. From an investment perspective, the main risk is inflation. Think about it this way -- if you deposit $10,000 in a five-year CD with a 2.5% APY and inflation occurs at an annualized 3% rate during that period, you’ll actually lose purchasing power by keeping your money in the CD.

    However, a CD is a good investment in the sense that it can allow you to squeeze more money out of your rainy-day savings or any money you’ll need in the next few years. Let's say you have $10,000 to help your child with college tuition and you’ll need the money in three years. A three-year high-yield CD could be a great way to invest that money in the meantime.

  • No. A CD is not a credit product (credit card, loan, mortgage, etc.) where a bank is loaning you money. In instances where you are borrowing money, lenders will check your credit to ensure you have the capability to pay back the funds borrowed.

    With a CD, the tables are flipped. You’re the one lending a bank money in return for the bank paying you back your deposit plus interest at a future date. This relationship explains why credit scores are unrelated to opening a CD account.

  • You should expect to earn a high yield with a CD and not pay fees to open an account, particularly with online banks where no fee CD’s are table stakes. No account opening and no maintenance fees are also common features for brick-and-mortar banks.

    But there are some CD offerings in the market that do charge fees, so it’s worth doing the math to ensure the CD charging a fee offers a higher APY than the wealth of no-fee options in the market.

    What many online and brick-and-mortar banks do share in common is that redeeming CD’s before maturity can result in an early redemption penalty. This isn’t a fee per se, but the outcome of having less money in your account is the same. Early redemption penalties typically mean you’ll receive back less than your initial deposit and/or give up a portion of your interest earnings.

  • The main differences are that CD accounts earn higher APY’s and have more restrictions on accessing your cash than savings accounts, which tend to offer lower APY’s, but easier access to funds deposited.

    CD’s mature at a specific future date. You’ll receive your initial deposit plus interest earned at that point. Accordingly, cash tied up in CD’s is essentially unavailable to you until maturity. The benefit to depositors is CD’s tend to offer a higher APY than savings accounts, depending on CD term – the longer the CD term, the higher the APY you can expect.

    Savings accounts don’t have a maturity date and your funds are always accessible.

Offer APY Min. Deposit
Discover High Yield CD 2.10% - 5 Year $2,500
Marcus by Goldman Sachs High Yield CD 2.25% - 5 Year $500
Ally High Yield CD 2.15% - 5 Year $0
American Express High Yield CD 2.15% - 5 Year $0
Synchrony Online CD 2.15% - 5 Year $2,000
Barclays Online CD 2.10% - 5 Year $0
TIAA Bank Yield Pledge® CD 2.10% - 5 Year $5,000
Sallie Mae 2.20% - 5 Year $2,500

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