Vanguard CD Rates for 2024

Did you know that Vanguard CD rates are some of the highest in the market? Vanguard is known for its mutual funds, ETFs, and brokerage accounts, but you might be surprised to learn that the company allows its customers to buy CDs as well.

In this review, we'll take a closer look at Vanguard's CD offerings, and whether they might be a good fit for you.

Vanguard CD rates for April 2024

As mentioned, Vanguard's CD offerings work a little different than most of the others on our radar. Specifically, Vanguard offers brokered CDs, which mean that Vanguard brokerage account customers can choose to put their money into CDs offered by certain banks directly through its platform.

While there's a lot to like about Vanguard brokered CDs, there's no such thing as a financial product that is a great fit for everyone. So, here are some of the pros and cons to keep in mind, followed by some of the important information you should consider when choosing the best CD for you.

Vanguard Brokered CDs

Here are the quick hit pros and cons of Vanguard Brokered CDs:

More details on the pros and cons above:

What we like:

There's a lot to like about Vanguard's brokered CDs. For starters, there are a lot of options when it comes to term length. While the exact number might change by the time you're reading this, a quick search on Vanguard's platform shows 157 different CDs to choose from. The shortest maturity listed is about a month away, while there are terms available that are as long as 15 years away. Some of the CDs listed, especially those with long term lengths, are callable, which means the issuing bank can choose to redeem them and return customers' money at certain dates, while most are traditional CDs.

All are offered by FDIC-insured banks, and most of the CDs listed on the platform are offered by banks whose names you'd probably recognize. And because Vanguard's platform offers CDs through several different banks, it's possible to get more than the usual $250,000 in FDIC insurance by purchasing CDs offered by more than one bank.

Another unique feature that might appeal to you is that because Vanguard is a brokerage, it also offers a secondary market for CDs. In simple terms, this means that you can choose to sell your CD to another investor before it reaches maturity. If interest rates have risen since you bought your CD, its value on the secondary market could fall a bit, but it's important to note that if you hold your CD to maturity, there's no chance of it losing value. Vanguard's secondary market also means that in addition to buying new issue CDs, you can also search for existing CDs that other investors are trying to sell.

Last, but certainly not least, Vanguard's brokered CDs offer some of the most competitive interest rates in the market. This is especially true for longer CD terms (such as three years or more).

Drawbacks:

However, there are some drawbacks. For one thing, you need to open a Vanguard brokerage account in order to buy a CD through the platform. This could be a good thing, especially for existing Vanguard customers, as well as for people willing to switch and want to keep their CDs in the same place as other investments.

In addition, Vanguard CDs have a minimum deposit requirement of $1,000. Some of our favorite CDs have much lower deposit requirements, or none at all. If you don't have a ton of money to get started with, or you want to create a CD ladder, this minimum could be an issue for you.

Other Vanguard CD accounts

Vanguard also offers the following CD accounts:

• Secondary CD purchases from other investors.

Our CDs methodology

At The Motley Fool Ascent, certificates of deposit (CDs) are rated on a scale of one to five stars, primarily focusing on annual percentage yield (APY) and early withdrawal penalty fees. Our highest-rated CDs generally include competitive APYs without complex qualification tiers, low withdrawal fees, reliable brand trust and reputation, and ease of use.

Learn more about how The Motley Fool Ascent rates bank accounts.