The best CD rates can help you earn more money than you could with a savings account, though there is a trade-off in accessibility. Most banks offer a variety of terms to choose from, with options typically ranging from six months to five years. Here's a look at which banks offer some of the best CD rates today for some of the most popular terms.
Rates as of Aug. 16, 2022
| Bank & CD Offer | APY | Min. Deposit | Next Steps |
|---|---|---|---|
|
| APY -5 Yr.: 3.20% | Min. Deposit: $0 | |
|
| APY -5 Yr.: 2.20% | Min. Deposit: $500 | |
|
| APY -5 Yr.: 3.20% | Min. Deposit: $2,500 | |
|
| APY -5 Yr.: 3.20% | Min. Deposit: $0 | |
|
| APY -5 Yr.: 2.90% | Min. Deposit: $0 | |
|
| APY -5 Yr.: 3.25% | Min. Deposit: $0 | |
|
| APY -5 Yr.: 3.25% | Min. Deposit: $500 | |
|
| APY -5 Yr.: 2.85% | Min. Deposit: $1,000 | |
|
| APY -5 Yr.: 3.65% | Min. Deposit: $1,500 | |
|
| APY -5 Yr.: 3.25% | Min. Deposit: $1,000 |
Sorry, we didn't find any CDs that meet those criteria.
Barclays Online CD
Bottom Line
Barclays offers competitive rates on most common CD terms with no minimum balance requirements. There are no monthly fees, so you should only make money with this account, unless you try to withdraw your funds early. The only common CD term missing is a six-month CD, but those interested in building longer-term CD ladders will find plenty to like here.
Minimum Deposit $0
| 6 Mo. APY | 0.10% |
|---|---|
| 1 Yr. APY | 2.30% |
| 1.5 Yr. APY | 2.40% |
| 2 Yr. APY | 2.60% |
| 3 Yr. APY | 2.70% |
| 4 Yr. APY | 2.80% |
| 5 Yr. APY | 3.20% |
Quontic CDs
Bottom Line
Quontic is a lesser-known bank, but don't let that be a reason to overlook its CDs. Its APYs are consistently high and there aren't any hoops to jump through to lock in those rates.
Minimum Deposit $500
| 6 Mo. APY | 1.15% |
|---|---|
| 1 Yr. APY | 1.76% |
| 1.5 Yr. APY | -- |
| 2 Yr. APY | 1.95% |
| 3 Yr. APY | 2.05% |
| 4 Yr. APY | -- |
| 5 Yr. APY | 2.20% |
Discover High Yield CD
Bottom Line
Discover has a higher minimum balance requirement than some of its competitors, but its rates are competitive and you don't have to worry about getting hit with any fees unless you withdraw funds via wire transfer. It also offers some unique term lengths, including CDs as short as three months and as long as 10 years.
Minimum Deposit $2,500
| 6 Mo. APY | 0.75% |
|---|---|
| 1 Yr. APY | 2.30% |
| 1.5 Yr. APY | 2.50% |
| 2 Yr. APY | 2.60% |
| 3 Yr. APY | 2.70% |
| 4 Yr. APY | 2.80% |
| 5 Yr. APY | 3.20% |
Capital One 360 CD
Bottom Line
Capital One 360 CDs have no minimum balance, terms range from six months to five years, and rates are pretty competitive -- particularly on some of its short-term CDs. Capital One is also unusual in letting its account holders decide when they'd like to receive the interest they've earned. You can get your interest paid monthly, which is typical of most CDs, or you can also choose to receive it annually or at the end of your CD term.
Minimum Deposit $0
| 6 Mo. APY | 1.30% |
|---|---|
| 1 Yr. APY | 2.30% |
| 1.5 Yr. APY | 2.40% |
| 2 Yr. APY | 2.60% |
| 3 Yr. APY | 2.70% |
| 4 Yr. APY | 2.80% |
| 5 Yr. APY | 3.20% |
Ally High Yield CD
Bottom Line
Ally's banking products tend to have some of the most competitive APYs in the market, and its CD product is no different. Besides including high interest rates, Ally High Yield CDs offer the same APY to all balances and the low minimum deposit makes these CDs accessible to a wide array of savers. Add in a high-quality mobile app and online experience, and you can see why Ally High Yield CDs are a solid option to consider.
Minimum Deposit $0
| 6 Mo. APY | 1.25% |
|---|---|
| 1 Yr. APY | 2.30% |
| 1.5 Yr. APY | 2.50% |
| 2 Yr. APY | -- |
| 3 Yr. APY | 2.70% |
| 4 Yr. APY | -- |
| 5 Yr. APY | 2.90% |
Synchrony Online CD
Bottom Line
Synchrony is rare in that it doesn't penalize you for withdrawing interest before the maturity date, though you will owe a penalty if you try to withdraw your principal ahead of schedule. It's worth considering if you're interested in CDs with less common term lengths, like three or 15 months. At all levels, it offers competitive APYs that should interest those trying to earn the largest returns.
Minimum Deposit $0
| 6 Mo. APY | 1.50% |
|---|---|
| 1 Yr. APY | 2.30% |
| 1.5 Yr. APY | 2.50% |
| 2 Yr. APY | 2.60% |
| 3 Yr. APY | 2.80% |
| 4 Yr. APY | 2.80% |
| 5 Yr. APY | 3.25% |
Marcus by Goldman Sachs High Yield CD
Bottom Line
Marcus by Goldman Sachs® offers high-yield CDs with terms ranging from six months to six years. It stands out from the pack because of its low minimum deposit and its 10-day CD rate guarantee, which promises to bump up your rate automatically if the rate on your chosen CD increases within 10 days of account opening.
Minimum Deposit $500
| 6 Mo. APY | 1.50% |
|---|---|
| 1 Yr. APY | 2.40% |
| 1.5 Yr. APY | 2.60% |
| 2 Yr. APY | 2.80% |
| 3 Yr. APY | 2.90% |
| 4 Yr. APY | 3.00% |
| 5 Yr. APY | 3.25% |
TIAA Basic CD
Bottom Line
TIAA Bank Basic CDs pack in a trifecta of valuable features, including high APYs, no monthly fees, and a wide array of terms ranging from three months to five years. The $1,000 minimum deposit will be a hurdle for some, but that deposit amount is common for online CDs.
Minimum Deposit $1,000
| 6 Mo. APY | 1.30% |
|---|---|
| 1 Yr. APY | 2.30% |
| 1.5 Yr. APY | 2.40% |
| 2 Yr. APY | 2.50% |
| 3 Yr. APY | 2.65% |
| 4 Yr. APY | 2.75% |
| 5 Yr. APY | 2.85% |
Bread Savings CD
Bottom Line
Comenity Direct CDs are available in many of the most popular terms, making it a flexible high-yield CD to consider for differing needs. There's also no monthly maintenance fee. But its $1,500 minimum deposit is a little steeper than what some of its competitors charge.
Minimum Deposit $1,500
| 6 Mo. APY | -- |
|---|---|
| 1 Yr. APY | 3.00% |
| 1.5 Yr. APY | -- |
| 2 Yr. APY | 3.50% |
| 3 Yr. APY | 3.55% |
| 4 Yr. APY | 3.60% |
| 5 Yr. APY | 3.65% |
CDs 101
Here are a few things you should know if you want to find the best certificate of deposit for you.
What is a CD?
A certificate of deposit (CD) is a type of FDIC-insured deposit account offered by many banks and credit unions that usually has a fixed interest rate over a certain number of months or years. CD interest rates are often higher than what you find with most savings accounts, but they carry the stipulation that you must not touch the money until the CD term is over. If you withdraw the funds early, you pay a penalty, though some banks allow a CD loan (a loan secured by the money you already have in your CD).
How does a CD work?
You deposit a certain amount of money into a high-yield CD and agree not to touch it for the length of the CD term in exchange for a high rate of interest that's usually locked in for the full term. Your bank pays that interest monthly or quarterly, and when the CD term is up, you may withdraw the funds and spend them, place them in a savings account, or put them in another high-interest CD.
Withdrawing your funds before the CD term ends results in a penalty -- usually several months' worth of interest. The earlier you withdraw the funds, the larger your penalty will be.
Are CDs safe?
CDs are safe in the sense that you cannot lose money if you follow the rules. These accounts are backed by the FDIC insurance for up to $250,000 per person per bank, so your money is safe even if your bank goes under.
The only time you can lose money is if you withdraw your funds before the CD term is up. Usually, this just costs you some of the interest you've earned. But if you haven't yet earned enough interest to cover the penalty, your bank may take some of your principal as well. So make sure you're comfortable leaving your money in the CD for the full term before committing to one.
RELATED: What Is CD Laddering? See if this is the right strategy for your portfolio.
Are CD rates fixed?
CD rates are usually locked in at the time you open the account, but it depends on the type of CD you have. Bump-up CDs enable you to raise your rates over time, while callable CDs carry the risk that your rates could drop. This can hurt your profits, so you need to be especially careful before you sign up for one of these.
Which banks have the best CD rates?
Online banks overwhelmingly offer the best CD interest rates when compared to larger brick-and-mortar traditional banks. In fact, some of our favorite online banks offer CD rates that are multiples higher than what you'd find with a national bank.
We've rarely seen a reason to invest in CDs with a brick-and-mortar national bank, especially when online banks offer the same FDIC insurance protection.
If looking for a select few of the best online CD rates to consider, we suggest reviewing some of the following:
How to pick the best CD rate
Pay attention to the following factors when comparing the best CD rates today to find the one that's right for you:
APY: The APY tells you how much you'll earn in interest.
CD term: The CD's term is the length of time you agree to not touch your money. It can range from one month on the short end to six years or more on the long end. Most range from six months to five years. You'll usually find the longer the CD term, the higher the interest rate.
Minimum deposit: While some of the best online CD rates have no minimum deposit, others may require a few hundred to a few thousand dollars. Some jumbo CDs may have five-figure minimum deposit requirements.
Fees: Fees with CDs aren't common, except for early withdrawal penalties, discussed below. But it's good practice with any bank account to look into its fees to see if there are any costs associated with the account.
Penalties: You'll pay a penalty -- usually several months' worth of interest -- to withdraw your funds ahead of schedule. The exact penalty will depend on how early you withdraw the funds. This should all be outlined in the CD's fee schedule.
When interest compounds: Some CDs compound interest monthly, but most compound daily. Daily compounding is better because it gives you more money in interest.
How interest is paid to you: Most CDs add the interest you earn to your account balance, but some give you the option to have your interest paid directly to you. If you go this route, you can reap some of the benefits of your CD immediately. But bear in mind that if you leave the money in your account instead, you can earn interest on your interest, which leads to more money overall.
What happens at the end of your CD term: Some banks automatically enroll you in a new CD of the same term length unless you specify that you want to do something different. It's usually a bad idea to let your bank open a new CD for you. Watch out for this and make sure you tell your bank what you want to do with your money instead.
FDIC or NCUA insurance: CDs offered by banks should carry FDIC insurance so your money is protected up to $250,000 per person per account. NCUA does the same thing for share certificates offered by credit unions. Most CDs will have the appropriate insurance, but it pays to be sure.
How often rates are raised: Step-up and bump-up CDs occasionally raise your rates. If you're interested in one of these, pay attention to how often you or the bank can increase the rate.
Whether it's callable: Some CDs are callable, which means the bank can call it back from you at some point and reissue you a new CD, possibly at a lower rate.
When is a CD a good idea?
Fixed-rate CDs are the most popular offerings, and bump-up CDs are worth considering as well. If you're considering opening a CD, here's a scenario-based analysis of when it may be the right time to open one of these CD accounts:
| Type of CD | When Opening One Is a Good Idea |
|---|---|
| Fixed-rate CD | When market interest rates are decreasing: This is particularly smart for longer terms, where you could be locked into a low rate for an extended period of time if you wait to open a CD later. |
| Bump-up CD | When rates are decreasing: The benefit of a bump-up CD is you're in control when requesting a rate increase. When rates are decreasing, you can lock in a high rate as the market decreases. |
| Bump-up CD | When rates are increasing: Opening a bump-up CD when rates are going up could be a good idea since you can request a rate increase later, so long as the bank offers a higher rate for the same term. |
When is a CD a bad idea?
It's best to wait to take action on opening a fixed-rate CD when interest rates are increasing to avoid locking in a low rate. Bump-up CDs have more flexibility, but they can still be the wrong choice if rates are rising rapidly because you can usually only request a rate increase once per term and might miss out on better rates later.
| Type of CD | When Opening a CD Is a Bad Idea |
|---|---|
| Fixed-rate CD | When market interest rates are increasing: You risk locking yourself into a low rate for an extended period of time, especially for longer-term CDs. |
| Bump-up CD | When rates are increasing rapidly: This may be a bad idea. You could open a bump-up CD and request a rate increase later, assuming the bank offers a higher rate on the same term, but it may be best to put your money into a high-yield savings account and invest in a CD later. |
What are alternatives to CDs?
CDs are appealing if you're trying to earn a high rate on your savings, but the fact that you cannot touch your money for a set amount of time can be too constraining for some people. If you don't think a CD is a great fit for you, perhaps one of these accounts would work better.
High-yield savings accounts: These accounts offer interest rates that are comparable to the best online CD rates, and they have fewer restrictions on what you can do with the money. You're able to put money in and take it out whenever you want, though you are limited to six withdrawals per month by federal law.
Money market accounts: These are a hybrid of checking and savings accounts. They offer interest rates similar to high-yield savings accounts and certificate of deposit rates, but they also give you a debit card and check-writing capabilities so you can directly withdraw funds from your account. This might be a better option than a high-yield savings account or a CD if you anticipate needing to take money directly out of your account.
Will CD rates go up in 2022?
The Federal Reserve has signaled that it anticipates raising broad interest rates throughout 2022 and later. This was after the Federal Reserve raised CD rates on March 17, 2022. These broader actions by the Federal Reserve should lead to the best CD interest rates we've seen in the past few years.
Timing when to purchase a CD is always difficult. But we suggest being cautious in early 2022 on locking your money into a long-term CD over several years when there's a chance CD interest rates will increase.
Other CD terms to consider
CDs are a flexible savings option in that the terms range from months up to 10 years, making them valuable for depositors with an array of short- and long-term needs. Here are the most common CD terms:
- 6-month CDs
- 12-month CDs
- 18-month CDs
- 2-year CDs
| Offer | APY | Min. Deposit |
|---|---|---|
| 3.20% - 5 Yr. | $0 | |
| 2.20% - 5 Yr. | $500 | |
| 3.20% - 5 Yr. | $2,500 | |
| 3.20% - 5 Yr. | $0 | |
| 2.90% - 5 Yr. | $0 | |
| 3.25% - 5 Yr. | $0 | |
| 3.25% - 5 Yr. | $500 | |
| 2.85% - 5 Yr. | $1,000 | |
| 3.65% - 5 Yr. | $1,500 | |
| 3.25% - 5 Yr. | $1,000 |
FAQs
-
Using a CD for an emergency fund is safer than putting it in the stock market. However, it's not as flexible as a savings account. If you withdraw money from a CD before the term is over, you will have to pay an early withdrawal penalty. Typically it is one to two months of interest earned.
Other options for an emergency fund are a savings account, high-yield account, money market account, or a money market mutual fund.
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This will depend on the CD rate. Let's use an example. $10,000 invested in a 1-year CD at a 1.00% APY would make $100. The same amount invested in a 5-year CD at a 1.00% APY would make $510.10.
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According to the FDIC, as of March 2022, these are the average national CD rates:
- 12-month CD:0.15%
- 24-month CD: 0.19%
- 36-month CD: 0.22%
- 48-month CD: 0.23%
- 60-month CD: 0.29%
CD rates are typically higher the longer the term. Many banks offer CD rates higher than that of the national average. For example, some online banks offer CDs with rates that are multiple times higher for the same term.
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Yes. CD deposits are covered by FDIC insurance, which insures depositors for up to $250,000 per person per bank. In the event of a bank's insolvency, this insurance would kick in and cover any lost funds up to that amount.
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Your CD rate is typically fixed for the term of the CD, unlike savings accounts, where your rate will adjust over time. Specialty CDs like bump-ups do have rates that adjust throughout the CD term.
About the Author
Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what's almost a farm in northern Wisconsin with her husband and three dogs.
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