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            Best CD Rates

            Our guide to the highest CD rates available to anyone in the U.S.

            When you have cash you want to save for a bit, but want to earn more than you would with a standard savings account, certificates of deposit can be a good option. To help you earn the most you can, here are our rankings on the best-paying CDs that are available to U.S. customers everywhere.

            Drawn from our continuous research on the approximately 200 banks and credit unions that offer CDs nationwide, these certificates pay three to five times as much as the national average. To be eligible for our rankings, each CD must have a minimum deposit requirement of $25,000 or less and be offered by an FDIC-insured bank or NCUA-insured credit union.

            In cases where more than one institution has the same top rate, we've prioritized CDs by the shortest term, then the CD requiring a smaller minimum deposit, and if still a tie, by which CD has a milder penalty for early withdrawal.

            Investopedia is committed to providing our readers with unbiased product recommendations. We may receive compensation when you click on links to products, but this doesn't affect how we rate, review, and rank them.

            Best 3-Month CDs Rate Term Minimum
            1.25% APY 3 months $500
            1.25% APY 3 months $500
            (not in CA or FL) 1.20% APY 3 months $25,000
            1.00% APY 3 months $500
            0.85% APY 3 months $1,000
                   
            Best 6-Month CDs Rate Term Minimum
            1.70% APY 7 months $500
            1.51% APY 7 months $500
            1.50% APY 6 months $1,000
            For more, see our in-depth 6-month CD rankings.      
                   
            Best 1-Year CDs Rate Term Minimum
            1.90% APY 12 months $2,500
            1.87% APY 12 months $25,000
            1.85% APY 12 months $500
            For more, see our in-depth 1-year CD rankings.      
                   
            Best 18-Month CDs Rate Term Minimum
            1.90% APY 18 months $2,500
            1.87% APY 18 months $25,000
            1.85% APY 18 months $500
            1.80% APY 18 months $500
            1.75% APY 18 months Any amount
            1.75% APY 18 months Any amount
            1.75% APY 18 months $500
                   
            Best 2-Year CDs Rate Term Minimum
            1.92% APY 29 months $1,000
            1.90% APY 24 months $500
            1.85% APY 24 months $500
            For more, see our in-depth 2-year CD rankings.      
                   
            Best 3-Year CDs Rate Term Minimum
            2.02% APY 36 months $1,000
            2.00% APY 36 months $500
            1.89% APY 36 months $500
            For more, see our in-depth 3-year CD rankings.      
                   
            Best 4-Year CDs Rate Term Minimum
            2.10% APY 48 months $500
            2.00% APY 48 months $500
            2.00% APY 48 months $25,000
            1.92% APY 48 months $500
            1.90% APY 48 months $500
                   
            Best 5-Year CDs Rate Term Minimum
            2.20% APY 60 months $500
            2.15% APY 60 months $500
            2.10% APY 60 months $1,000
            For more, see our in-depth 5-year CD rankings.      
                   
            Best 6- to 8-Year CDs Rate Term Minimum
            2.05% APY 84 months $25,000
            1.90% APY 72 months $500
            1.60% APY 84 months $500
            1.60% APY 84 months $2,500
            1.55% APY 84 months $500
                   
            Best 10-Year CDs Rate Term Minimum
            1.70% APY 120 months $500
            1.60% APY 120 months $2,500
            1.20% APY 60-120 months $1,000
            For more, see our in-depth 10-year CD rankings.      
             

            Details on the early withdrawal penalty for the top CD in each term are provided below, along with information on how to join the credit union, where applicable.

            Top 3-month rate: Spectrum Federal Credit Union - 1.25% APY

            • Early withdrawal penalty: Three months of interest
            • Membership: Anyone can join Chevron Federal Credit Union by making a $15 donation to the Contra Costa County Historical Society and keeping $25 or more in a member savings account.

            Top 6-month rate: Marcus by Goldman Sachs - 1.70% APY

            • Early withdrawal penalty: Three months of interest
            • About: Marcus by Goldman Sachs is an online-only bank established in 2016 by the investment bank giant.

            Top 1-year rate: Live Oak Bank - 1.90% APY

            • Early withdrawal penalty: Three months of interest
            • Membership: Live Oak Bank is an Internet-only bank established in Wilmington, N.C., in 2008.

            Top 18-month rate: Live Oak Bank - 1.90% APY

            • Early withdrawal penalty: Three months of interest
            • Membership: Live Oak Bank is an Internet-only bank established in Wilmington, N.C., in 2008.

            Top 2-year rate: Hughes Federal Credit Union - 1.92% APY

            • Early withdrawal penalty: Six months of interest ($50 minimum)
            • Membership: Anyone can join Hughes Federal by donating $10 to one of four local library nonprofits in their community, and keeping $50 or more in a savings account.

            Top 3-year rate: Hughes Federal Credit Union - 2.02% APY

            • Early withdrawal penalty: Six months of interest ($50 minimum)
            • Membership: Anyone can join Hughes Federal by donating $10 to one of four local library nonprofits in their community, and keeping $50 or more in a savings account.

            Top 4-year rate: Pen Air Federal Credit Union - 2.10% APY

            • Early withdrawal penalty: Six months of interest
            • Membership: Anyone can join Pen Air Federal Credit Union by agreeing to a free membership in Friends of the Navy Marine Corps Relief Society and keeping at least $25 in a member savings account.

            Top 5-year rate: Pen Air Federal Credit Union - 2.20% APY

            • Early withdrawal penalty: Six months of interest
            • Membership: Anyone can join Pen Air Federal Credit Union by agreeing to a free membership in Friends of the Navy Marine Corps Relief Society and keeping at least $25 in a member savings account.

            Top 6- to 9-year rate: Air Force Federal Credit Union - 2.05% APY

            • Early withdrawal penalty: Half of the interest that would have been earned until maturity
            • Membership: Anyone can become a member of Air Force Federal by donating $25 to the Airman Heritage Foundation and keeping $5 or more in a savings account.

            Top 10-year rate: Vio Bank: 1.70% APY

            • Early withdrawal penalty: 3% of withdrawal amount + $25 fee
            • About: In addition to its well-known credit card, Discover offers online-only banking products to consumers nationwide.

            Alternatives to CDs

            If you aren't looking to lock your money up for a period of time and want easier access to it, you could look at opening a high-yield savings account as an alternative. Below are some savings account options from our partners which can be competitive with the rates you can earn on CDs. It should be noted that unlike a CD, where your rate is locked in, with a savings account the bank or credit union can change your rate at any time.

            How Much Do CDs Pay?

            While the national average is a good indicator of the direction of rates—and how much they've changed over a period of time—they are not what you should consider when shopping for CDs. Instead, look for the top nationally available rates, which stand far above industry averages.

            Take one-year CDs, for instance. The current national average is just 0.30% annual percentage yield (APY). Today's top-paying institution, however, will pay you 1.90% APY on that same one-year commitment—that's more than six times as much. Similarly, for three-year CDs, you can currently earn 2.02% APY instead of the industry average of 0.47% APY.

            If you have cash you can park for a period of time, but want to earn more than the best savings and money market accounts will net you, our research on the best nationally available rates in every major CD term can lead you to maximum returns.

            Keep in mind that CD yields are still considered taxable as interest income on both the state and federal levels, which will impact the total return you can realize.

            How Does a CD Work?

            Opening a CD is very similar to opening any standard bank deposit account. The difference is what you're agreeing to when you sign on the dotted line (even if that signature is now digital). After you've shopped around and identified which CD(s) you'll open, completing the process will lock you into a four things.

            1. The interest rate: Locked rates are a positive in that they provide a clear and predictable return on your deposit over a specific time period. The bank cannot later change the rate and therefore reduce your earnings. On the flip side, a fixed return may hurt you if rates later rise substantially and you've lost your opportunity to take advantage of higher-paying CDs.
            2. The term: This is the length of time you agree to leave your funds deposited to avoid any penalty (e.g., 6-month CD, 1-year CD, 18-month CD, etc.) The term ends on the "maturity date," when your CD has fully matured and you can withdraw your funds penalty-free.
            3. The principal: With the exception of some specialty CDs that allow add-on deposits, this is the amount you agree to deposit into the CD, at the time of opening.
            4. The institution: The bank or credit union where you open your CD will determine aspects of the agreement, such as early withdrawal penalties (EWPs) and whether your CD will be automatically reinvested if you don’t provide other instructions at the time of maturity.

            Once your CD is established and funded, the bank or credit union will administer it like most other deposit accounts, with either monthly or quarterly statement periods, paper or electronic statements, and usually monthly or quarterly interest payments deposited to your CD balance, where the interest will compound. 

            Pros and Cons of CDs

            Pros
            • Offers a higher rate than you can earn with a savings or money market account

            • Pays a guaranteed, predictable rate of return, avoiding the volatility and losses that are possible with stocks and bonds

            • Is federally insured if opened with an FDIC bank or NCUA credit union

            • Can help fend off spending temptations since withdrawing the funds early triggers a penalty

            Cons
            • Cannot be liquidated before maturity without incurring an early withdrawal penalty

            • Typically earns less than stocks and bonds can over time

            • Earns a fixed rate of return regardless of whether interest rates rise during the term

            What Is a CD Ladder and Why Should I Build One?

            Smart CD investors have a specific tactic for hedging against rate changes over time and maximizing their return. It's called a CD ladder and it enables you to access the higher rates offered by 5-year CD terms, but with the twist that a portion of your money becomes available every year, rather than every 5 years. Here's how to do it.

            At the outset, you take the amount of money you want to invest in CDs and divide it by five. You then put one-fifth of the funds into a top-earning 1-year CD, another fifth into a top 2-year CD, another into a 3-year CD, and so forth through a 5-year CD. Let’s say you have $25,000 available. That would give you five CDs of varying length, each with a value of $5,000. 

            Then, when the first CD matures in a year, you take the resulting funds and open a top-rate 5-year CD. A year later, your initial 2-year CD will mature, and you'll invest those funds into another 5-year CD. You continue doing this every year with whichever CD is maturing, until you end up with a portfolio of five CDs all earning 5-year APYs, but with one of them maturing every 12 months, keeping your money a bit more accessible than if all of it were locked up for a full five years.

            What Is Considered a Good Rate For a CD

            What makes CDs attractive as an investment vehicle is not their rate of return but their risk-free nature. When you open a CD, you know upfront exactly what interest rate you will earn and for how long. Except for some speciality CDs, the rate on your certificate is guaranteed and locked for the full duration of the certificate, meaning your return is predictable and safe.

            Adding to their risk-free nature is the fact that CDs, like other bank and credit union deposit products, are federally insured against bank failures. Depending on the financial institution offering them, CDs are insured by either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).

            CD minimums can run as low as $250 or $500, and you'll find plenty of options with minimums up to $1,000. As for durations, the majority of CDs carry terms of six months to five years, though shorter and longer certificates exist at some banks. Larger deposits and longer terms typically earn higher interest rates, though promotional certificates often break that general rule. The interest rates available on the best-paying CDs are usually in line with the current inflation rate, so virtually any rate higher than that is a good deal. Often, online banks and credit unions offer the best CD rates.

            Maximizing Your CD Rate of Return

            The No. 1 strategy for earning as much as you can from a CD investment is to diligently shop around for the top rates. After that, the next most important strategy is to keep the funds invested for the CD's full term, so as to avoid incurring an early withdrawal penalty that will reduce your earnings.

            But unexpected things happen in life, and you may find yourself having no choice but to cash in a CD early. Because of that possibility, you'll be well-served by paying attention to the early withdrawal penalties of different CDs you're considering, before you make your final commitment.

            It's also useful, when comparing two CDs that are fairly similar, to check their compounding periods. The advantage of having interest calculated and compounded more frequently adds up over time, so look to avoid CDs that offer only annual compounding.

            While CDs are traditionally a fixed-rate investment, variable-rate CDs do exist. If you think interest rates are likely to rise significantly, you can benefit from a certificate whose interest rate is adjusted during the term of the CD. These certificates are sometimes called "raise your rate" or "step up" CDs.

            Meanwhile, indexed or structured CDs offer you the chance to earn a percentage of the return on a stock index or commodity index. This can result in a much higher return than a traditional CD's—but for a trade-off of much more risk.