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Earning Interest

The Best CD Rates – February 2018

Any opinions, analyses, reviews or recommendations expressed in this articles are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any lender or provider of the products listed.

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Updated February 14, 2018

If you are looking for a better yield on your savings, a high rate CD (certificate of deposit) offered by an online bank could be a good option. Internet-only banks offer much better interest rates than traditional banks. For example, a 12-month CD at Bank of America would require a $10,000 minimum deposit and would pay only 0.07%. At an online bank, you could earn 1.85% with only a $2,000 minimum deposit. (If you would rather get a savings account or money market with no time restriction, look at the best savings accounts or best money market accounts).

This list is updated monthly, and competition continues to intensify.  Here are the accounts with some of the best CD rates:

  • 12-Month CD: Goldman Sachs Bank USA - 2.05% APY, $500 minimum deposit

Goldman Sachs Bank USA
Our advertiser Marcus by Goldman Sachs is the online consumer bank of Goldman Sachs Bank USA (the large investment bank). Your funds are FDIC insured, and Goldman offers very competitive rates. Even better: there is only a $500 minimum deposit. So, if you don't have enough money to meet the minimum deposit of the other banks on this list, or you are looking for another bank for your savings, GS is a good option. It also doesn't hurt that they also offer some of the best CD rates in the market today.  You can currently earn an outstanding 2.05% APY by only committing to a 12-month term. Here are their other rates:

  • 2-year: 2.15% APY
  • 3-year: 2.25% APY
  • 5-year: 2.60% APY
  • 6-year: 2.65% APY

Member FDIC

  • 1 year - 5 years: Barclays Bank - 2.00% - 2.55% APY, no minimum deposit

12 Month Online CD from Barclays Barclays is one of the oldest banks in the world. Although they're based in London, they do have a U.S. presence and offer competitive rates on their CDs and savings account. Currently, they're offering some of the highest CD rates in the market, and they have an edge over the rest of the institutions on this list: they don't require a minimum balance to earn the APY or open an account. Deposit as little or as much as you'd like into a term of your choice and you can start earning interest as long as the account is funded within 14 days of opening the CD. Additionally, your funds are insured through the FDIC.

  • 1-year: 2.00% APY
  • 2-year: 2.10% APY
  • 3-year: 2.20% APY
  • 5-year: 2.55% APY

LEARN MORE 

Member FDIC

  • 3 months - 5 years: Ally Bank - 1.00% APY - 2.50% APY; $0 minimum deposit (higher APY with higher deposit)

Ally Bank
Ally is one of the largest internet-only banks in the country. Ally's former advertising campaign made it very clear: no branches = higher rates. And Ally has consistently paid some of the highest rates in the country across savings accounts, money market accounts and CDs. For savers with fewer funds, Ally is unique. There is no minimum deposit to open a CD. However, if you have more money, you can earn a higher APY. If you have more than $25,000 to deposit, you can earn between 0.39% APY and 2.35% APY. And one of our favorite features of Ally: they often (although not always) offer preferential rates on renewal. Far too often banks give the biggest bonuses to new customers, but Ally has done a good job of rewarding its existing customers. All deposits at Ally are FDIC insured up to the legal limit.

  • 12-months: 1.75% APY (less than $5k); 1.85% APY ($5k minimum deposit) and 2.00% APY ($25k minimum deposit)
  • 18-months: 1.80% APY (less than $5k); 1.95% APY ($5k minimum deposit) and 2.05% APY ($25k minimum deposit)
  • 3-year: 1.85% APY (less than $5k); 2.00% APY ($5k minimum deposit) and 2.10% APY ($25k minimum deposit)
  • 5-year: 2.25% APY (less than $5k); 2.40% APY ($5k minimum deposit) and 2.50% APY ($25k minimum deposit)

on Ally Bank’s secure website

Member FDIC

  • 3 months - 5 years: Synchrony Bank - 0.25% APY - 2.50% APY; $2,000 minimum deposit

Synchrony Bank
Synchrony used to be a part of GE, and now has an online bank that pays competitive rates. The online deposits are used to fund their store credit card portfolio - and the company is publicly traded. Your deposit will be insured up to the FDIC limit. In a rising rate environment, this is a great way to get a high interest rate without locking yourself into a long term.

  • 12-months: 1.85% APY
  • 18-months: 1.70% APY
  • 2-year: 2.00% APY
  • 3-year: 2.05% APY
  • 5-year: 2.50% APY

Member FDIC

  • 1-Year CD: Live Oak Bank – 2.10% APY, $2,500 minimum deposit

Live Oak Bank

Live Oak is a bank you’ll want to notice. With a minimum deposit amount of $2,500, you can earn an outstanding APY of 2.10%. They also offer an incredible rate on their online savings account. While they’re still a small bank when compared to Synchrony, Goldman Sachs, and Ally, they have quickly grown to have over $2 billion in assets. They do have a mobile banking app as well as the option to bank online. Although they have the capability to manage your account digitally, you will have to call one of their Customer Success Managers in order to withdraw your funds once the account matures.

LEARN MORE 

Member FDIC

  • 2-Year CD: BankPurely – 2.35% APY, $1,000 minimum deposit

BankPurely
BankPurely, an online division of Flushing Bank, “is all about bringing banking back to its roots” by focusing on the community – even if it is an online community. By rewarding their customers with a 2.35% APY on their 2-year CDs, they’re doing just that. You’ll just need to deposit $1,000 to open the account, and for every account that is opened, BankPurely will plant a tree. Even though they’re an online bank, their digital banking experience is done through iGObanking.com. BankPurely is FDIC insured through Flushing Bank.

  • 2-Year CD from a Credit Union: Latino Credit Union – 2.30% APY, $500 minimum deposit

Latino Credit Union

Latino Credit Union is open to anyone who is willing to donate $10 to join the Latino Community Development Center (LCDC). You don’t have to be Latino to join the credit union or the organization. With a small deposit of $500, this credit union will reward you with a 2.30% APY. Accounts can be managed online or through their mobile app. Deposits made to Latino Credit Union are insured by the NCUA.

  • 3-Year CD: Live Oak Bank – 2.40% APY, $2,500 minimum deposit

Live Oak Bank

Live Oak proves themselves to be a bank with the best CD rates, once again. With the same minimum deposit amount as their 1-year CD, you’ll get a top APY of 2.40%. While opening the account can easily be done online, you’ll want to keep in mind that you’ll have to call the bank in order to withdraw your funds. If you don’t do this within 10 calendar days after the term ends, the CD will automatically renew with whatever rate is at the time of renewal.

LEARN MORE 

Member FDIC

  • 3-Year CD from a Credit Union: Latino Credit Union, 2.40% APY, $500 minimum deposit

Latino Credit Union
Latino Credit Union surprises us with their outstanding rate of 2.40% on a 3-year CD. As a bonus, the minimum amount to open the account is five times lower than Live Oak Bank’s deposit requirement. The credit union is open to anyone, Latino or not, for a small fee and deposits are NCUA insured.

  • 5-Year CD: Synchrony - 2.50% APY, $2,000 minimum deposit

Synchrony Bank
You'll need $2,000 to take advantage of Synchrony’s 2.50% APY. After clicking on "Apply Now" you will be taken to their standard CD landing page. Make sure you select the 60-month option. Just remember: if you close the CD early, you could be hit with a 365-day interest penalty. That means if you close the account in the first year, you would actually lose some of your initial deposit. While you won’t get rich with a 2.50% APY, you will be earning interest with a great company. By comparison, the rate at Bank of America on a 5-year CD is only 0.75%.

Member FDIC

  • 5-Year CD from a Credit Union: Connexus Credit Union – 3.00% APY, $5,000 minimum deposit

Connexus Credit Union

If you’re able to deposit $5,000 into a CD, you’ll want to consider this 5-year CD with an incredible 3.00% APY. Anyone is able to join the credit union by making a donation of $5 to their organization called Connexus Association. This organization provides scholarships and assists educational institutions. They have a mobile banking app as well as an online banking platform.

3 Questions To Ask Before You Open A CD

1. Should I just open an online savings account instead? 

With a CD, the saver and the bank make stronger commitments. The saver promises to keep the funds in the account for a specified period of time. In exchange, the bank guarantees the interest rate during the term of the CD. The longer the term, the higher the interest rate - and the higher the penalty for closing the CD early. With a savings account, there are few promises. You can empty the account without paying a penalty and the bank can change the interest rate at any time.

If you have a high level of confidence that you do not need to touch the money for a specified period of time, a CD is a much better deal. However, if you think you might need to use the money in the next couple of months, a savings account is a much better idea.

You can earn a lot more interest with a CD. Imagine you have $10,000 and know that you do not need to touch the money for two years. In a high-yield savings account earning 1.10%, you would earn $221 over two years. If you put that money into a 1.50% CD, you would earn $302. Given the ease of switching to an online CD, the extra interest income is easy money.

2. What term should I select? 

The early withdrawal penalties on CDs can be significant. On a 1-year CD, 90 days is a typical penalty. And on 2 and 3 year CDs, a 6-month penalty is common. The impact of the penalty on your return can be significant. If you opened a one-year CD with a 1.25% APY and closed it after six months, you would forfeit half of the interest and earned only 0.63%. You would have been better off with a savings account paying 1.05%.

The worst case scenario is with the longest CDs. 5-year CDs usually have a one-year penalty for taking out funds early. If you open a 5-year CD and close it quickly, you could actually end up losing money.

Given the early penalties, you need complete confidence that you will not need to withdrawal the money early. Ask yourself this question: "do I have 90% confidence that I will not need access to the cash during the CD term?" If you don't have confidence, go for a shorter term or a savings account.

3. Should I consider my local bank or credit union? 

The interest rates shown in this article are all from online banks that offer products nationally. Our product database includes traditional banks, community banks and credit unions. If traditional banks offered better rates, they would have been featured in this article. The internet-only banks have dramatically better interest rates. That should not be surprising. Because internet-only banks do not have branches, they are able to pass along their cost savings to you in the form of higher interest rates.

However, you can always visit your local bank or credit union and ask them to beat the rates listed in this article. The chance of getting a better deal is extremely low (remember that Bank of America is only paying 0.07%), but you can try.

How To Find The Best Account

If you don't find an account that meets your needs in this article, you can use the MagnifyMoney CD tool to find the best rate for your individual needs. Input your zip code, deposit amount and term. The tool will then provide you with CD options, from the highest APY to the lowest.

You can learn more about us and how we make money here.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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The Top 6 Month CD Rates for February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

The top 6 month CD rates
Source: iStock

Short-term certificate of deposit (CD) accounts offer investors a safe opportunity to squirrel away money for a future expense. If you’re looking for a brief solution for storing your cash and want to earn more interest than a typical savings account will offer, a 6 month CD can make a lot of sense. (It’s also a good place to start if you’re building a CD ladder.)

Using information from DepositAccounts.com, another LendingTree company and a database of offerings at more than 17,100 banks and credit unions, we found the five banks and five credit unions with the top 6 month CD rates. If there was a tie, we chose the institution with the smaller minimum-deposit requirement. We pulled these rates on Feb. 5, 2018, and we excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.44%, according to the DepositAccounts.com database. These options outperform that average by a long shot. (You may also want to view our picks for the overall best CD rates.)

Banks with the best 6 month CD rates

Live Oak Bank

Live Oak Bank

6 month CD APY: 1.65%
Bank information: Live Oak Bank is located in Wilmington, NC, but serves customers nationwide through online banking. While their initial focus was to help small businesses acquire funding, they now help all individuals through personal banking.
Where to open CD account: Online
Minimum balance to open: $2,500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE 

Member FDIC

First Internet Bank of IN

First Internet Bank of Indiana

6 month CD APY: 1.63%
Bank information: A subsidiary of First Internet Bancorp, this online bank founded in 1999 has no branch locations, but offers service online in all 50 states.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

VirtualBank

6 month CD APY: 1.56%
Bank information: VirtualBank is a subsidiary of Louisiana-based IBERIABANK Corp., offering 24/7 digital or telephone access on eCDs, open to applicants anywhere in the U.S.
Where to open CD account: Online (paperless account options)
Minimum balance to open: $10,000
Maintenance fees: $0
Early withdrawal penalties: 30 days’ interest

DollarSavingsDirect

DollarSavingsDirect

6 month CD APY: 1.50%
Bank information: DollarSavingsDirect is an online division of Emigrant Bank, which is located in New York.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

M.Y. Safra Bank - deposite services

M.Y. Safra Bank

6 month CD APY: 1.45%
Bank information: M.Y. Safra Bank has been around since 2000, offering a wide variety of banking products to their customers. Although their physical location is in New York, they provide online banking to customers located outside of New York.
Where to open CD account: Online
Minimum balance to open: $5,000
Maintenance fees: $0
Early withdrawal penalties: Credited interest or 90 days’ interest — whichever is greater

Credit unions with the best 6 month CD rates

Latino Credit Union

6 month CD APY: 1.50%
Credit union information: Founded in Durham, N.C., in 2000, Latino Credit Union opened its doors as a solution to the Durham Latino community who were being robbed and mugged. While their original intent was to serve the Latino community, they have since expanded their membership to include anyone and everyone.
Membership details: Anyone who is willing to provide a one-time $10 donation to the Latino Community Development Center is welcome to become a member of the credit union.
Where to open CD account: Online
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

Service Credit Union

Service Credit Union

6 month CD APY: 1.30%
Credit union information: Founded in Portsmouth, N.H., in 1957, Service Credit Union originally served employees of Pease Air Force Base. Today, it has grown to serve over 200,000 people throughout New Hampshire, North Dakota, Massachusetts, and even Germany.
Membership details: To become a member, you must live or work, or have family members that live or work in New Hampshire or Falmouth, Bourne, Mashpee, and Sandwich, Mass. Current members of the military, veterans, retirees, and reservists of the U.S. Armed Forces along with their families are also eligible for membership.
Where to open CD account: You can open an account online or at one of their many branches.
Minimum balance to open: $250
Maintenance fees: $0
Early withdrawal penalties: Determined by credit union.

PenFed Credit Union

6 month CD APY: 1.30%
Credit union information: PenFed, established in 1935, today serves more than 1.6 million members at branch locations in all 50 states and select overseas facilities.
Membership details: Open to current or retired members of the U.S. military, federal employees, affinity partners, members of qualifying organizations, or by donating to Voices for America’s Troops or the National Military Family Association.
Where to open CD account: You can open an account online or at one of their branches.
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE 

NCUA Insured

Bethpage Federal Credit Union

6 month CD APY: 1.25%
Credit union information: Bethpage Federal Credit Union, located in Bethpage, NY, was founded for employees of Grumman Plant in 1941. Since then, they’ve undergone a lot of changes to expand their membership to include anyone in the U.S.
Membership details: A one-time $5 deposit into a Bethpage savings account enables you to become a member of the credit union.
Where to open CD account: Online
Minimum balance to open: $50
Maintenance fees: $0
Early withdrawal penalties: Determined by credit union.

Capital Educators Federal Credit Union

CapEd Credit Union

6 month CD APY: 1.25% (must be under 25 years old to earn APY)
Credit union information: CapEd Credit Union focuses on supporting teachers in Idaho, but is open to almost anyone.
Membership details: To become a member, you must work, volunteer, or have retired from the educational industry in Idaho. If you have a family or household member who works, volunteers, or has retired from Idaho’s educational system, you can also qualify for membership. Finally, if you have a family or household member who is already a CapEd member then you are eligible for membership.
Where to open CD account: Online
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: The lesser of 90 days’ interest, interest earned within the number of days between opening the account to the date of withdrawal, or seven days’ interest if withdrawn before seven days.

Pros and cons of using 6 month CDs

Pros:

  • The CD rates offered by banks and credit unions are generally higher than those on savings accounts.
  • The rates are fixed and guaranteed for the length of their term.
  • The discipline of keeping the funds in the CD means the money will be available upon maturity. (Note: Most banks offer a seven-day grace period to reinvest or withdraw the investment, after which the funds will roll over into a new CD. However, you are not guaranteed the same rate.)

Cons:

  • Six-month CD rates are lower than those offered on longer CD investment terms.
  • To tap into the CD funds — even for emergencies — consumers must accept a loss through penalties, which can include a percentage of the funds, a percentage of the earned interest, or a combination of both. A typical penalty on a short-term CD is between 30 and 90 days’ worth of interest earnings.
  • If you’re not confident you can do without access to the funds for six months, you may be better off putting your money in a traditional savings account, which is likely to earn less interest than a CD.
  • Since CD rollovers may reset at a different percentage rate, consumers must speak with the bank before the grace period ends to ensure they are getting the best deal.

Using a 6 month CD for laddering

A CD ladder comprises small-amount CDs with varying terms and respective interest rates that contribute to a long-term investment strategy. After the 6 month CD matures, investors can withdraw the funds for a predetermined expense. Or, they can reinvest the money into a longer-term CD with a better rate. By staggering the maturity dates on short-term CDs, consumers have access to their cash on a regular, predictable basis.

Where can you open a CD account?

Consumers can open 6 month CD accounts (or longer) from banks and credit unions. Bank and credit union CD rates are based on Federal Reserve rates, and there may be strategic times to pursue these short-term instruments following a rate increase.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Gabby Hyman
Gabby Hyman |

Gabby Hyman is a writer at MagnifyMoney. You can email Gabby here

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The Best Credit Union CD Rates – February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

The top credit union CD rates
Source: iStock

Certificates of deposit (CDs) are a great way to safely store your savings at a financial institution, as they offer a guaranteed rate of return, and CD rates tend to be higher than those on traditional savings accounts. Maybe you’ve even heard that credit union CD rates offer higher returns—but is that really the case?

On average, yes. As of December 2017, the average one-year credit union CD had a 0.68% annual percentage yield (APY), compared to the 0.54% APY average among one-year bank CDs.

Using data from DepositAccounts.com, another LendingTree company, we identified the top one-year credit union CD rates, as of Feb. 5, 2018. We then eliminated any credit union with a health rating lower than a B and identified the top three offerings in three categories: restricted, no cost, and best banking app. If there was a tie by APY, we went with the product with the lower minimum deposit. Here are the best one-year credit union CD rates.

Best CD rates for credit unions with no cost to join

The thing about credit unions is that they’re not usually just open to anyone. You usually need to meet some membership criteria in order to get in and get access to all of their really nice products. These credit unions, however, will let you in for free regardless of your personal details. (Note: Only two credit unions met our criteria for this list.)

Unify Financial Credit Union - 1-Year Share Certificate, 1.00% APY, min. deposit $1,000

UNIFY Financial Credit Union
Unify FCU offers the highest interest rates on CDs (which it calls share certificates) of any credit union with no cost to join. The interest rate on their 12-month CD, for example, is 1.00%, compared to the national average of 0.68% in December. You would earn $8.50 on a $1,000 deposit. If you withdraw your money early, however, you’ll face a penalty of 90 days’ worth of interest.

NASA Federal Credit Union - 1-Year Share Certificate, 0.65% APY, min. deposit $1,000

NASA Federal Credit Union
If the rigid inflexibility of CDs makes you leery, NASA FCU might be your best bet. They have a lot of flexible certificates, such as add-on certificates that let you start with as little as $250, and bump-rate certificates that let you opt for a one-time interest rate increase if rates go up. You can even take out a loan from your certificate should you need the cash before it’s matured. You can join NASA FCU with a complimentary membership to the National Space Society.

If you do need to make an early withdrawal, you will face a penalty of 180 days’ worth of interest.

Best credit union CD rates with restricted memberships or membership fees

Each of these credit unions have restricted membership criteria, but don’t let that scare you away. If you don’t meet their membership criteria, it’s possible to make a small donation to their charity of choice in order to become eligible for membership. Furthermore, these credit union CD rates offer some of the highest-returning share certificates out of any category.

Connexus Credit Union - 12 Month Certificate, 2.01% APY, min. deposit $5,000

With a $5 donation to the Connexus Association, anyone can join Connexus Credit Union. The Connexus Association assists educational institutions by providing scholarships and financial information. Once you become a member of the credit union, you’ll be able to open their 12 month CD with a $5,000 deposit.

If you’re able to deposit $5,000 into Connexus’s 12 month CD, you’ll earn $100.50 by the end of the term. However, if you withdraw funds early, you’ll be penalized with 90 days’ worth of interest.

Latino Credit Union - 12 Month CD, 2.00% APY, min. deposit $500

To become a member of Latino Credit Union, anyone can simply donate $10 to the Latino Community Development Center. Once you become a member of this credit union, you’ll be able to take advantage of their 2.00% APY by depositing $500. Early withdrawal penalties are worth 90 days of interest on their 12 month CD.

USAlliance Financial – 12 Month CD, 1.87% APY, min. deposit $500

USALLIANCE Financial
Membership to USAlliance Financial is open to anyone who lives, works or worships in certain counties of Massachusetts, the city of West Haven, Conn., and a few districts in New York. However, if you don’t qualify by location, you can qualify by giving USAlliance authorization to make you a member of various organizations, including the American Consumer Council, if you aren’t already a member of these organizations. Keep in mind that these organizations may request fees.

Once you’re a member of USAlliance Financial, you can open a 12-month CD with a minimum of $500. Their early withdrawal penalty equals 180 days’ worth of interest earned on the amount you withdraw.

PenFed Credit Union – 1-Year Money Market Certificate, 1.87% APY, min. deposit $1,000

PenFed Credit Union
PenFed tops this list with an APY of 1.87%. With a minimum deposit of $1,000, you could earn $18.70 in one year. Interest is compounded daily and posts to accounts monthly. However, be aware of the steep early withdrawal penalty. If you withdraw funds before the year is up, you may forfeit all interest accrued up to that point.

Eligibility for this credit union is mainly based on military status, governmental employment status, affiliation with certain associations and organizations or relation to eligible members. However, if you don’t qualify through those criteria, getting a membership to this credit union is not difficult if you’re willing to pay a one-time fee of $17 to either Voices for America’s Troops or the National Military Family Association.

LEARN MORE 

NCUA Insured

Alliant Credit Union – 12-17 Month Share CD, 1.75% APY, min. deposit $1,000

Alliant Credit Union
With a minimum deposit of $1,000, you could earn an APY 1.75% on a 12-17 month CD. If you deposit $25,000 or more, you may be able to earn an APY of 1.80% with the same term. An early withdrawal penalty of 90 days’ worth of interest may be imposed if you withdraw funds prior to the CD’s maturity date.

With a $10 donation to Foster Care to Success, you can easily become a member of Alliant Credit Union. You can also become a member if you are an employee or retiree of certain organizations, related to existing Alliant members, or live or work in qualifying communities.

Best CD rates for credit unions with the best mobile apps

By their very nature, CDs aren’t something that require constant attention, poking, and prodding. It’s a set-it-and-forget-it kind of a deal, so you won’t need any spiffy banking apps to use CDs.

But, if you’d like to switch all of your banking to the same institution that holds your CDs, it might be a wise idea to consider one of these credit unions if you’re a digital junkie. Most credit unions lag behind their bank compatriots in terms of mobile banking apps, but these credit unions offer top-notch mobile apps, according to MagnifyMoney’s 2017 mobile banking app analysis.

Wright-Patt Credit Union - 1-Year Certificate, 2.00% APY, min. deposit $500

Wright-Patt Credit Union
Unlike many credit unions, you can’t just make a simple donation to join Wright-Patt CU if you fail to meet their membership criteria. You need to live in certain areas of Ohio, be associated with Wright-Patterson Air Force Base, or be an employee of their select employer group, among other options.

You can earn $10.00 on a 12-month CD with just a relatively small $500 deposit. Early withdrawal penalties vary depending on the original term of your CD, however they’ll be anywhere between 5-12 months’ worth of dividends.

Redstone Federal Credit Union – 12 Month MemberPlus Regular Share Certificate, 1.61% APY, min. deposit $1,000

Redstone Federal Credit Union
Similar to Wright-Patt CU, you can’t just make a simple donation to join to Redstone Federal Credit Union if you fail to meet their membership criteria. You need to be a government employee or contractor, a member of the military, reserve, or National Guard, or affiliated with a number of organizations listed on their website among other options.

However, if you do qualify for membership, you could earn an APY of 1.61% with a minimum deposit of $1,000. This could earn you an additional $16.10 at the end of the 12 month term. Redstone FCU has compounding and non-compounding certificates, which allow you to have the option to withdraw interest earned or not throughout the term of the certificate.

Eastman Credit Union - 1-Year Investment Certificate, 1.40% APY, min. deposit $1,000

Eastman Credit Union
Eastman Credit Union also has pretty restrictive membership requirements. You’ll have to be an employee (or a family member of an employee) of one of their select employers, or live in certain parts of Tennessee, Texas, or Virginia.

Eastman CU is another one of the rare credit unions that allow you to withdraw your dividends penalty-free before the maturity date, although again, doing so will lower your total returns. Currently, you can earn an interest rate of 1.40% on a 12-month CD. With a minimum deposit of $1,000, that translates into earnings of $14.00 after one year. If you withdraw your money before the CD matures, you’ll owe a penalty fee of anywhere between seven days’ worth of dividend earnings or all of your dividend earnings.

Delta Community Credit Union – 1-Year Certificate, 1.00% APY, min. deposit $1,000

Delta Community Credit Union
There are many ways to join Delta Community CU, such as living in certain parts of Georgia, being a member of one of their select employers, or being a member of one of their partner organizations. Interestingly, citizens of many countries like Argentina, France, and Peru are also eligible to join.

Delta Community CU used to be the lowest-earning credit union on our list, but recently increased the APY on this product from 0.75% to 1.00%. The early withdrawal penalty is 90 days’ worth of interest on a 12-month CD.

3 questions to consider before opening a credit union CD

Banks are more likely to call their products certificates of deposit, while credit unions often refer to them as share certificates. Aside from the name, the biggest difference between the two is that credit unions have higher average annual percentage yields (APYs), as of December 2017. That’s good news: It means more money back in your pocket when the CD matures (i.e., reaches the end of its term and is available for withdrawal).

There really is no difference in safety between depositing money in a CD with a credit union versus a bank, as long as they participate in either the National Credit Union Administration (NCUA) for credit unions, or the Federal Deposit Insurance Corporation (FDIC) for banks.

According to Neal Frankle, a Los Angeles-based Certified Financial Planner with Wealth Pilgrim, deposits of up to $250,000 per financial institution are “backed by the full faith and credit of United States Government, so it's pretty solid.”

For the most part, choosing a CD at a bank or a credit union boils down to your preference as a consumer: Do you want to be a bank customer or a member of a credit union? Here’s a primer on the differences.

The biggest advantage of credit union CDs over bank CDs is that you can likely earn more interest. But with both products, the longer the CD term, the more interest you will earn. And with a CD laddering strategy, you can have the best of both worlds: frequent access to your money, yet you can still keep it locked away in high-interest, long-term CDs.

Beyond that, the disadvantages of opening a credit union CD are the same as if you’re opening a CD with a bank. You can’t access that money without paying an early withdrawal penalty until the CD matures. While CDs do offer some of the highest rates for any financial product you’re likely to come across at a bank or credit union, they still don’t really earn great interest. If you’re investing for the long-term (like retirement savings), your money is better invested in the riskier (but higher-earning) stock or bond market.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

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Best of, Earning Interest

The Top IRA CD Rates – February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Top IRA CD rates
Source: iStock

Perhaps you’ve decided to build a CD ladder within your IRA, or maybe you’re looking for a safe way to store your retirement cash for a specific period of time. Whatever the reason, you’re interested in getting an IRA CD and, understandably, want to know what products will give you the best rate of return.

You can get an IRA CD with terms ranging from three months to more than six years, with interest rates generally increasing with the term length. There are lots of options, so we’ve rounded up the top IRA CD rates that are available right now for a variety of terms. You’ll select your IRA CD terms based on your CD-ladder master plan or whenever you’ll need access to your money.

Every month, we choose the top IRA CD rates using data from another LendingTree company DepositAccounts.com, a database of offerings at more than 17,100 banks and credit unions. On Feb. 5, 2018, we sorted the products by APY, then eliminated institutions with a health rating below a B. We then eliminated products that are not available nationwide. From there, we chose the IRA CD with the highest APY among products with a minimum deposit no greater than $5,000. Here are the best options. (Average CD rates referenced below are based on DepositAccounts.com data as of Feb. 5, 2018.)

The top IRA rates in February 2018

3 Month IRA CD – Bethpage Federal Credit Union, 3 Month IRA (Traditional, Roth)

Three-month IRA CDs typically offer the lowest interest rates of any IRA CD term. Bethpage offers the best rate of 1.25% APY and a minimum deposit of $50. That rate is well above the national average.

6-Month IRA CD - Ally Bank, IRA High Yield 6-Month CD

Online Savings Account from Ally Bank

Six-month IRA CDs typically earn a little bit better, but they’re still not great. Ally Bank offers the highest interest rate at 1.60% APY for deposits between $5,000 and $25,000. That translates into an earning of $39.84 on a $5,000 deposit. If you deposit less than $5,000, you can still earn a decent APY of 1.50%. If you deposit $25,000 or more, you'll earn a 1.75% APY. Compare that to the average of all regular 6 month CDs, at 0.44%.

1-Year IRA CD Rates – First Internet Bank of IN, 12 Month IRA (Traditional, Roth)

Regular one-year CDs earn an average interest rate of 0.70% APY. First Internet Bank of IN, however, is offering a one-year IRA CD at 2.07% APY. You’ll need a $1,000 minimum deposit to earn $20.20 in interest once the CD matures.

18-Month IRA CD Rates – First Internet Bank of IN, 18 Month IRA (Traditional, Roth)

18-month regular CDs earn an average interest rate of 0.86% APY. First Internet Bank of IN, on the other hand, is currently offering 2.12% APY on a 18-month IRA CD. This would translate into an earning of $31.21 with a minimum $1,000 deposit.

2-Year IRA CD Rates – MutualOne Bank, 24 Month IRA Certificate (Traditional, Roth)

Two-year regular CDs earn an average interest rate of 0.96% APY. MutualOne Bank, on the other hand, is currently offering 2.32% APY on a 2-year IRA CD. This would translate into an earning of $23.47 with a minimum $500 deposit.

3-Year IRA CD Rates – EverBank, 3-Year Yield Pledge IRA (Traditional, Roth)

EverBank -  3-Year IRA CD Rates Three-year regular CDs are earning an average interest rate of 1.13% APY currently. EverBank is nearly doubling that, with an interest rate of 2.30% APY with their 3-Year Yield Pledge IRA CD. With those interest rates and a $5,000 minimum deposit, you would earn $357 when the certificate matures.

4-Year IRA CD Rates – First Internet Bank of IN, 48 Month IRA (Traditional, Roth)

Four-year regular CDs are currently earning an average interest rate of 1.36% APY. First Internet Bank of IN again claims the top interest rate for these IRA CDs, with an interest rate of 2.48% APY. You would earn $98.65 on this CD with a $1,000 minimum deposit.

5-Year IRA CD Rates – Connexus Credit Union – 60 Month IRA (Traditional, Roth)

Five-year IRA CDs hold the top spot for interest rates out of any category on our list. National averages for a regular 5-year CD is 1.63% APY, however Connexus Credit Union outperforms the average with a 3.00% APY on its 5-year IRA CD for members. The minimum deposit is $5,000 to earn this APY.

6+ Year IRA CD Rates – Air Force Federal Credit Union, 7 Year IRA

Air Force FCU-6 Year IRA CD Rates Interestingly, these very-long-term IRA CDs don’t offer higher interest rates than the shorter-term five-year IRA CDs. Air Force Federal Credit Union offers the highest term for their seven-year IRA CD, at 2.50% APY. That’s still a lot less than Connexus Credit Union which offered a 3.00% APY for a five-year IRA CD. Still, with Air Force Federal Credit Union’s seven-year IRA CD, you would earn $471.71 on a minimum deposit of $2,500 when the IRA CD matures.

3 questions to consider before opening an IRA CD

Opening an IRA CD generally requires filling out a form or talking to a banker. You’ll have to have a way to fund your IRA CD, whether that’s rolling over an existing retirement account into an IRA CD or depositing cash into the product. The same limits that apply to IRA contributions apply to IRA CDs: $5,500 per year ($6,500 if you’re over age 50) of your own money across all your IRA accounts each year, and you can do a rollover once per year.

Unless you’ve invested in a bump-up IRA CD, you won’t be able to take advantage of a higher rate until your CD matures. Withdrawing funds from an IRA CD before they mature will result in a stiff penalty. Bump-up IRA CDs give you a chance to increase your interest rate to a higher level if it’s available, but you’re generally only allowed to do this once or twice during the life of the CD.

You can either use the the direct-transfer method or the indirect-transfer method. The direct transfer method requires setting up your new IRA account filling out a form authorizing the bank or credit union to transfer money from the old account into the new account. The indirect transfer method involves you asking for a check from your old IRA account. You have up to 60 days to deposit that check into your IRA CD to avoid incurring a penalty.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

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Earning Interest

The Best High Yield Checking Accounts in 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

iStock

The money you keep in your checking account has a lot of valuable potential that can help you reach your financial goals. Sadly, this potential isn’t often realized because most checking accounts offer little to no interest, especially compared to savings and CD accounts. These high yield checking accounts are bucking that trend with sky-high rates that can put even the best savings accounts to shame. But, before you sling all of your cash into one of these accounts, there’s a few things you need to know.

Typically, these accounts come with a lot more strings attached than a regular checking account (you didn’t think they’d be offering all of this for free, did you?). In this article, we’ll help you make an informed decision about whether one of these high yield checking accounts are right for you and your financial goals.

How we picked the best high yield checking accounts

We followed a strict approach when selecting these accounts. We used the online rate finder for FDIC- or NCUA-insured rewards checking accounts on DepositAccounts.com, another LendingTree.com-owned site, to list the top 10 checking accounts with the highest rates. These rates were pulled on 2/5/18. We assumed a deposit amount of $100.

Credit unions were only included if they allow membership to anyone (such as by making a donation to their chosen charity). Finally, we filtered out any checking accounts that are not available nationwide, or that carry a health rating of below a B.

The best high yield checking accounts in 2018

America’s Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following four things each month:
    1. Have $15,000 in loans or deposits with ACU
    2. Have a $500 direct deposit
    3. Be signed up for eStatements
    4. Complete 10 debit transactions in person in store
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: Your first 10 non-America’s Credit Union ATM withdrawals are free. After that, you’ll pay $1.00 per withdrawal at a non-America’s Credit Union ATM.
  • ATM refunds: None

First Financial Credit Union (Illinois)

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following two things each month:
    1. Be enrolled in eStatements
    2. Complete 15 signature-based debit card purchases
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: Your first eight out-of-network withdrawals per month are free. Balance inquiries and cash withdrawals after your eighth withdrawal of the month are $1.00 each.
  • ATM refunds: $10 per month.

La Capitol Federal Credit Union

  • Minimum amount to open: $50
  • Requirements to earn the high APY: Make at least 25 debit purchases per month.
  • Monthly service fee and how to waive it: $2; waived if you enroll in eStatements.
  • ATM fees: None
  • ATM refunds: Up to $25 in out-of-network surcharges (the money the ATM’s owner charges you) per month if you are signed up for eStatements and make 25 debit purchases per month.

Blue Federal Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must have completed the following three things each month:
    1. Make at least 10 debit transactions
    2. Be enrolled in eStatements
    3. Have at least one direct deposit, ACH deposit or withdrawal, or bill payment per month from your account
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: $1.50 for out-of-network ATMs.
  • ATM refunds: $3 per transaction, up to $21 per month as long as you’ve met the requirements to earn the high APY. Otherwise, no ATM fee refunds will be given.

One American Bank

  • Minimum amount to open: $50
  • Requirements to earn the high APY: You’ll need to do the following three things for each qualification cycle (be aware: their qualification cycles are not the same thing as a calendar month):
    1. Complete at least 12 debit purchases of $5.00 or more
    2. Be enrolled in eStatements
    3. Log into your Online Banking account
  • Monthly service fee and how to waive it: No monthly service charges.
  • ATM fees: None
  • ATM refunds: Up to $25 per qualification cycle if you meet the requirements to earn the high APY.

Consumers Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following four things each month:
    1. Make 12 Debit card point-of-sale purchases without using the PIN (all 12 must post and clear the account on or before the last day of the calendar month)
    2. Have at least one direct deposit, ACH debit, OR bill payment (using Consumers Credit Union's online bill pay system) post and clear the account on or before the last day of the calendar month.
    3. Sign into their Online Banking system at least once each calendar month
    4. Be signed up for eStatements
      • Keep in mind that Consumers Credit Union will add an additional requirement each time the balance grows to earn the higher APY.
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: None
  • ATM refunds: Complete reimbursement for all ATM fees charged from ATMs outside of their surcharge-free ATM network as long as you meet the minimum requirements of their Rewards Checking Account.

Partner Colorado Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You’ll need to do three things each month:
    1. Use your debit card to make at least 20 signature-based purchases of $5 or more
    2. Be signed up for eStatements
    3. Log into your Online or Mobile Banking account
  • Monthly service fee and how to waive it: $5; waived if you meet the requirements to earn the high APY.
  • ATM fees: None.
  • ATM refunds: All ATM surcharge fees are refunded.

Signature Federal Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following things each month:
    1. Have at least one direct deposit into your account of $1,000 or more
    2. Be enrolled in e-statements
    3. Use your debit card to make at least 10 purchases per month
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: None.
  • ATM refunds: Signature Federal Credit Union allows you to choose from either a higher interest rate, $10 in waived ATM fees, or debit card rewards points. If you choose the higher interest rate, they will not waive ATM fees.

Lake Michigan Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You’ll need to complete these four actions each month:
    1. Have at least one direct deposit into any Lake Michigan Credit Union account
    2. Make at least 10 debit purchases
    3. Log onto online banking at least four times
    4. Be signed up for eStatements
  • Monthly service fee and how to waive it: No monthly service fees.
  • ATM fees: $1.00 for out-of-network ATMs.
  • ATM refunds: $15 per month in out-of-network ATM surcharge fees (i.e., the fees that the ATM’s owner tacks on).

Great Lakes Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following actions each month:
    1. Have at least $500 in direct deposits into the account
    2. Make at least 10 signature-based debit card purchases of $100 or more
    3. Be signed up for eStatements
    4. Use Bill Pay at least once or log into Mobile Banking at least once
  • Monthly service fee and how to waive it: $5; waived if you have at least $500 in direct deposits each month and 5 signature-based debit card purchases per month.
  • ATM fees: $2.00 for non-Great Lakes Credit Union ATMs, $0.50 per balance inquiry even for in-network ATMs.
  • ATM refunds: $5 per month if you meet the requirements to earn the high APY.

How are these banks able to offer such a high APY?

Did you notice that most of the institutions offering high yield checking accounts tend to be smaller names that you’ve probably never heard of? It turns out there’s a good reason for that, and it all has to do with some recent legal changes.

Back when the Dodd-Frank Act was passed in 2010, a tiny legislative nugget called the Durbin Amendment was included in the text. This amendment limited the swipe fees that big banks can charge merchants for each purchase that one of their customers makes using a debit card.

Suddenly, big banks could only charge half as much per swipe as they had been doing, and swipe fees became a lot more lucrative for smaller banks and credit unions instead.

That’s why so many smaller institutions have strict rules requiring you to use your debit card each month. According to the Federal Reserve, in 2016 smaller banks earned anywhere from 18 to 65 cents for each debit card swipe, compared to a maximum of just 22 cents plus 0.05% of the purchase price for larger banks.

Say, for example, a smaller bank requires you to make 10 debit transactions per month, and earns 65 cents from each transaction. Your bank would then earn $6.50 from your spending that month.

That is where the high interest rates come from. It’s also why the high interest rates are generally capped to smaller balances, so that you don’t earn too much money and negate all the swipe fees that the bank earns.

Is it worth meeting requirements to go after the high APY?

Some of these high yield checking accounts have a lot of requirements.

If you prefer to use debit cards, chances are you’ll be able to easily meet the minimum debit swiping requirements for most of these accounts. On the other hand, if you’re a cash or credit card junkie, you may find yourself frequently worrying at the end of the month about whether or not you’ve met the minimum debit swiping requirements. In this case, a high yield checking account might not be right for you.

Another thing to consider is that many of these banks require you to make a signature-based debit transaction, rather than a PIN-based debit transaction for it to count. Unfortunately, this is slightly less secure than using the PIN-based payment method.

You’ll also need to avoid making a rush of charges at the end of the month to meet the spending requirements. That’s because banks and credit unions will usually only count a charge that has finished posting to your account towards meeting the monthly swiping requirement. It can take a few days for debit swipes to post to your account, so it’s better to get these charges in early to make sure they post to your account in time to count.

The good news is that checking accounts aren’t designed to hold significant amounts of cash. That’s what a savings account is for, and you can still earn pretty good interest rates with a high yield savings account (although still nowhere close to these checking accounts).

If you’re going to keep a smaller deposit in your checking account anyways, why not earn as much as you can from it—especially if you know you’ll have an easy time meeting the requirements?

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Earning Interest

Top Jumbo CD Rates for February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Jumbo CD rates
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In the banking world, CD stands for certificate of deposit. This is a type of savings account where you agree to put a certain amount of money in for a set period of time. In return, the bank agrees to pay you interest. You may have to pay early-withdrawal penalties if you access your money before the CD term ends.

There is a type of CD called a jumbo CD, in which you generally have to put in a minimum deposit of $100,000. Sometimes these jumbo CDs have higher interest rates than CDs where you deposit less than $100,000.

Best CD Rate Currently Available: Ally Bank - 12-Month CD - 2.00% APY

Ally Bank is currently offering the highest CD rate available on a 12 month CD. While this CD is technically not a jumbo CD, it offers a rate that is too good to pass up. You can earn the 2.00% APY with a minimum of $25,000 and lock in that rate for the duration of the term once the account is funded.

on Ally Bank’s secure website

Member FDIC

Your deposit is FDIC-insured up to the maximum limit.

The top jumbo CD rates

To compile a list of the top jumbo CD rates, we used information from DepositAccounts.com, which, like MagnifyMoney, is a LendingTree company. We sorted products by APY. Then, we excluded any institutions with a health rating below a B, as well as any credit unions with very restrictive membership requirements. If there was a tie between APYs, we chose the CD with a minimum deposit of $100,000. All products on this list are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), but with jumbo CDs, it’s especially important to remember that only deposits up to $250,000 are insured.

Keep in mind that other banks might offer a CD with a better APY and a lower minimum deposit than $100,000. However, the chart below reflects the true definition of a jumbo CD, which involves a deposit of $100,000 or more.

This table is updated as of Feb. 5, 2018, but it’s always a good idea to double-check the annual percentage yield (APY) before making your choice of where to invest. Some banks on the list offer promotional APYs, so be sure to check that the rates below are still available since rates can change day to day.

Institution

CD Term

APY

Minimum Deposit Amount

M.Y. Safra Bank

3 months

1.15%

$100,000

My eBank

6 months

1.60%

$100,000

My eBank

1 year

2.05%

$100,000

Veridian Credit Union

18 months

2.28%

$100,000

My eBanc

2 years

2.25%

$100,000

My eBanc

3 years

2.35%

$100,000

M.Y. Safra Bank

4 years

2.15%

$100,000

M.Y. Safra Bank

5 years

2.25%

$100,000

As of Feb. 5, 2018

Banks that offer the best jumbo CD rates

M.Y. Safra Bank

M.Y. Safra Bank

M.Y. Safra Bank holds three spots on this list. When you go to its homepage, you’ll notice the banner shows “Special CD Offers.” This means that it’s important to keep track of these interest rates to make sure you get one that is current. This page has asterisks next to online promotions, so you know which ones might not be offered for a long time.

One downside to M.Y. Safra Bank is that the website is hard to navigate and is slow to load. This could be difficult for sophisticated investors who are used to banking with ease.

For a three-month jumbo CD, the APY is 1.15%. The APY on the four-year jumbo CD is 2.15%. Their five-year jumbo CD’s APY is 2.25%. Keep in mind there might be other banks that offer 35- or 38-month CDs for slightly better rates, but they were not factored into this chart since this category was specifically for a three-year offering.

My eBanc

My eBanc is an online-only bank. It’s a division of BAC Florida Bank. Unlike M.Y. Safra Bank’s, the eBanc website is much easier to navigate and has clear instructions on how to open a jumbo CD.

According to the site, My eBanc has no maintenance fees and compounds interest daily. When your jumbo CD matures, withdrawing your money is simple, although there is an early-withdrawal fee.

For a six-month jumbo CD, their APY is 1.60%. Their one-year jumbo CD has an APY of 2.05%. For a two-year jumbo CD, the APY is 2.25%. Lastly, for a three-year CD, the APY is 2.35%.

Veridian Credit Union

Veridian Credit Union

Veridian Credit Union is headquartered in Waterloo, Iowa, has 30 locations and over 700 employees. You can become a member of the credit union if you live in the area or if you’re a registered user of Dwolla, an e-commerce company which is available to anyone.

You can see current rates on jumbo CDs on the Veridian rate sheet. Keep in mind that several of the rates listed are current specials and might not be available long term. At the time of this writing, Veridian Credit Union has a special on an 18-month jumbo CD with an APY of 2.28%. This credit union also has various specials on 7, 9, and 15 month jumbo CDs.

The difference between jumbo and regular CDs

As mentioned previously, you can open a CD with less than $100,000. You can even get CD rates comparable to the ones above, with a lower minimum deposit requirement. Of course, the more money you put in a CD, the more interest you can earn, but if you don’t have $100,000 to open a jumbo CD, it’s important to know you do have other options with lower minimums.

Withdrawal penalties on jumbo CDs

According to a recent BankRate survey, the penalties for withdrawing your money from your CD early could be serious. Some banks will even take part of your principal as a penalty.

Below are the most common penalties, according to the survey:

  • 3 month CD: Three months of interest
  • 6 month CD: Three months of interest
  • 1 year CD: Six months of interest
  • 2 year CD: Six months of interest
  • 5 year CD: A year’s worth of interest

So, it’s important to be confident that you want to put your money in a CD. When you do this, you’re making an agreement with the bank to leave it there for a set period of time. If you’re unsure if you want to tie up your money for a long period of time, consider a high-yield savings account instead.

How jumbo CDs are taxed

It’s important to know that the interest you earn on your jumbo CD will be taxed as interest income, not as capital gains income.

This means that your bank or credit union will send you a 1099-INT form at the end of the year to show how much interest you earned in your jumbo CD and you will be taxed on that.

Are jumbo CDs safe?

According to the U.S. Securities and Exchange Commission: “Certificates of deposit are considered to be one of the safest savings options. A CD bought through a federally insured bank is insured up to $250,000.”

Some people prefer investing in the stock market over CDs because you can often get higher rates of returns; however, the stock market is a riskier bet, and returns are not guaranteed like those associated with CDs.

CDs are not affected by the whims of the stock market. The interest rate you agree on with your bank is the rate you will get. That interest rate, however, may not outpace inflation, meaning you may not really earn much, if anything, over time.

Final thoughts

If you have over $100,000 and want to invest it in a jumbo CD, you have several options. Like the chart above shows, you can choose many different terms and durations for your jumbo CD. Just be sure to research the bank you invest with so you know you’re putting your money with a top-rated institution. Also, be sure that you’re comfortable with putting your money in a CD long-term because there are often penalties for withdrawing your money early.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Cat Alford
Cat Alford |

Cat Alford is a writer at MagnifyMoney. You can email Catherine at cat@magnifymoney.com

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Earning Interest

Review of USAA CD Rates

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

USAA CD rates
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Founded and based in San Antonio, USAA is an FDIC-insured bank, insurance and financial services company that serves current and former military members and their families. Started by 25 U.S. Army officers, USAA has since grown to more than 11 million members. Most of their products are only available to USAA members, who are military members or their families.

USAA won a number of awards in 2016, including the title World’s Most Ethical Company from the Ethisphere Institute. It scored top rankings in the bank, insurance, and credit card categories in the Temkin Customer Service Ratings from 2013 to 2016.

Looking beyond high customer service standards, USAA CD rates are pretty comparable to the national average, though with some products they are significantly lower. Minimum deposit requirements are lower than with many similar products, though there are CDs out there with better rates and lower minimum deposits than USAA's CDs. If you’re a member of the military (or a family member of military member) and looking for a bank that offers a wide variety of products as well as excellent customer service, USAA could be a good bet if you’re will to make the tradeoff for lower CD rates.

USAA Fixed-Rate CDs

A USAA fixed-rate CD is for those who intend to make one deposit to get a guaranteed rate of return over the agreed-upon term. Once you make your initial deposit (which differs depending on the type of CD you choose), your interest rate is set for the duration of the CD term. You are not allowed to make any additional deposits into your CD account after the initial amount.

Interest accumulates daily, and you have the choice to keep any interest earned in the CD until it matures (the interest will compound monthly) or have it paid out monthly to an account of your choosing. The CD will not be renewed automatically once it matures, though you have the option to do so if you want. If not, all the money in the account will be paid into an investment account until you withdraw it or invest it in another type of account.

Early-withdrawal penalties apply depending on the term of your CD:

  • Terms of 30 days or less: 30 days’ worth of interest
  • 30 days to 364 days: 90 days’ interest
  • 365 days to five years: 180 days’ interest
  • Five years or more: 365 days’ interest

Also, if you make a withdrawal within six calendar days of a deposit or another withdrawal, you’ll have to pay at least seven days’ worth of interest.

Standard rates

A standard CD requires a minimum deposit of $1,000 and up to a maximum of $95,000. This type of account is best for those who do not have a large amount of money to invest and want a guaranteed rate for their savings.

CD Term

APY

91 days

0.30%

182 days

0.56%

7 months

0.56%

270 days

0.66%

1 year

0.71%

15 months

0.71%

18 months

0.76%

2 years

0.81%

30 months

0.85%

3 years

0.91%

4 years

0.95%

5 years

1.06%

7 years

1.06%

As of 2/2/2018

USAA fixed jumbo CD rates

Fixed jumbo CDs require a minimum deposit of $95,000 and a maximum amount up to $175,000.

CD Term

APY

30 days

0.22%

91 days

0.35%

120 days

0.45%

150 days

0.50%

182 days

0.61%

7 months

0.61%

270 days

0.71%

1 year

0.76%

15 months

0.76%

18 months

0.81%

2 years

0.86%

30 months

0.90%

3 years

0.96%

4 years

1.00%

5 years

1.11%

7 years

1.11%

As of 2/2/2018.

USAA fixed super jumbo CD rates

Fixed super jumbo CDs require a minimum deposit of at least $175,000 with no maximum amount. However, FDIC only insures up to $250,000.

CD Term

APY

30 days

0.22%

91 days

0.35%

120 days

0.45%

150 days

0.50%

182 days

0.61%

7 months

0.61%

270 days

0.71%

1 year

0.76%

15 months

0.76%

18 months

0.81%

2 years

0.86%

30 months

0.90%

3 years

0.96%

4 years

1.00%

5 years

1.11%

7 years

1.11%

As of 2/2/2018

USAA Adjustable-Rate CDs

Like the fixed-rate CDs, the interest rate is locked for the entirety of the agreed term with an adjustable-rate CD. All interest is compounded daily starting on your settlement date (the actual date when your deposit goes into your account) and the interest either paid out monthly or kept in the account until your CD matures. Your CD will not be automatically renewed. Instead the money will be put into an investment account until you decide to put it back into another CD account or withdraw the entire balance.

Unlike with the fixed-rate CD, however, you can adjust your rate once during your CD term as well as make one other deposit when you request a rate adjustment. If rates go up, you can make an adjustment up to a 2 percent increase. The additional deposit needs to be a minimum of $25.

Early-withdrawal penalties are the same as with the fixed-rate CD:

  • Terms of 30 days or less: 30 days’ worth of interest
  • 30 days to 364 days: 90 days’ interest
  • 365 days to five years: 180 days’ interest
  • Five years or more: 365 days’ interest

In addition, you will be required to pay at least seven days’ worth of interest if you withdrawal money within six calendar days of either a deposit or another withdrawal from your account.

Standard rates

The minimum opening deposit for an adjustable standard CD account is $1,000. You’re allowed up to a maximum of $95,000. Otherwise, you will need to open an adjustable jumbo CD account.

CD Term

APY

3 years

0.12%

4 years

0.31%

5 years

0.43%

7 years

0.43%

As of 2/2/2018

Jumbo rates

Adjustable Jumbo CDs need a $95,000 minimum deposit and rates are applicable up to $175,000.

CD Term

APY

3 years

0.17%

4 years

0.36%

5 years

0.48%

7 years

0.48%

As of 2/2/2018

Super jumbo rates

Adjustable super jumbo CDs have a minimum deposit of $175,000 with no limits on how much you can keep in your account. Keep in mind that FDIC insures up to $250,000 in your account.

CD Term

APY

3 years

0.17%

4 years

0.36%

5 years

0.48%

7 years

0.48%

As of 2/2/2018

USAA variable-rate CDs

This type of CD account is best suited to those who want the ability to make more than one deposit any time they choose. The rate tends to be lower than the other CDs of the same term length, but you are allowed to make as many additional deposits as you like without extending the maturity date, as long it’s $25 or more each time. This could help you earn more on your deposits than you would with a traditional savings account, though there are better rates to be had among those products, as well.

Unlike the fixed- and adjustable-rate CDs, the interest rate on a variable-rate CD may fluctuate daily so earnings may be affected. However, interest is compounded daily and just like the other CD accounts and you can either keep earned interest with the CD balance and allow the interest to compound, or you can have it paid out to another account every month.

There are also early-withdrawal penalties with a variable rate CD. You’ll be charged 30 days’ worth of interest if you take your money out before the maturity date.

CD Term

APY

Minimum Deposit Amount

182 days

0.46%

$250

1 year

0.46%

$250

As of 2/2/2018

Overall review on USAA’s CD rates

Above all, it’s important to remember that only USAA members can get its products, so if you’re not eligible for membership, USAA CDs aren’t an option for you.USAA’s CD rates are not as competitive as other institutions’ products (you can see the best CD rates in our monthly roundup). While the $1,000 minimum deposit requirement is lower than some other banks that offer higher APYs on their CDs, you can get a better CD rate on accounts with deposit requirements as low as $500. While the rates for jumbo and super jumbo CDs are better than its standard offers, you can find better rates.

One of the main advantages of opening a CD with USAA is the ability to bump up your rate with an adjustable-rate CD, as other banks don’t always offer this option.. It’s important to note that a rate increase is not guaranteed. However, you are given an opportunity to make another deposit into your account before maturity.

As for USAA’s variable-rate CD, you may be better off opening a high-interest savings account if you’re looking for an account with a good APY and some liquidity.

Overall, if you want a bank with excellent customer service and the ability to choose from a wide variety of services, USAA is a good option. USAA may be your best choice if you want your CDs at a bank that understands needs specific to military members and their families. But if high yields are your priority, you’re better off looking elsewhere.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Sarah Li Cain
Sarah Li Cain |

Sarah Li Cain is a writer at MagnifyMoney. You can email Sarah Li here

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Advertiser Disclosure

Earning Interest

Best Money Market Rates & Accounts – February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Updated February 2, 2018

Institution

APY

Minimum Balance Amount

UFB Direct

1.60%

$5,000

Ally Bank

0.90%

None

ableBanking

1.70%

$250

Northern Bank Direct

1.51%

$5,000

My eBanc

1.50%

$5,000

Salem Five Direct

1.50%

$100

Nationwide Bank

1.50%

$10,000

Sallie Mae

1.50%

None

Self-Help Credit Union

1.33%


1.43%

$500-$500,000


$500,000+

Premier Members Credit Union

3.00%

Up to $2k

Traditional banks are paying very low interest rates on money market accounts. For example, BB&T pays between 0.01% and 0.04% APY. Fortunately, you do not need to settle for such ridiculously low rates. You can easily find the best money market rates at internet banks paying 1.30% or more. If you put $50,000 into BB&T's account at 0.04%, you will only earn $20 of interest over one year. That same money in an account paying 1.30% would earn you $650 of interest. And you can typically open and fund an online money market account in less than 10 minutes. Also, the differences between savings accounts and money market accounts are narrowing because rates on money market account are increasing each year. You can currently earn the same top rate with a savings account from one bank and a money market account from another.

MagnifyMoney searches over 12,000 banks and credit unions to find the money market accounts paying the highest interest rates. Competition has been increasing and there is a pricing war. As a result, this month there are a lot of new names on the list (many of which you probably will not recognize). Here are the best rates for February 2018:

1. Top Rate: UFB Direct - 1.60% APY, $5,000 minimum balance to avoid a monthly fee

High Yield Money Market Account from UFB Direct
UFB Direct is a division of BofI Federal Bank, a federally chartered, publicly traded and FDIC-insured bank based in San Diego. In recent months, UFB Direct has become increasingly aggressive with high rates targeting big balances. The APY of 1.60% is the highest that we have found. However, there is one catch. You need to keep at least $5,000 in the account in order to avoid a monthly maintenance fee of $10.00. You will get a Visa debit card and have access to limited check writing. We think this is the best option for people with big balances that they want to keep in a money market account.

LEARN MORE 

Member FDIC

2. Favorite Online Package: Ally - 0.90% APY, no minimum deposit, and link to free checking

Online Savings Account from Ally BankAlly Bank is a very popular internet-only bank. If you keep a daily balance of $5,000 or less, you will earn the 0.90% APY. If you're able to keep a minimum daily balance of $25,000 the APY increases to 1.00%. Although the interest rate on the money market account is not the highest, Ally does offer a very competitive overall package - particularly if you link the account to an Ally checking account. The checking account has no minimum balance and no monthly fee. You can link your money market account to your checking account to provide overdraft protection. Money would be transferred to your checking account with no transaction fee if you ever made a mistake. You would be able to access your money market account with your Ally ATM card, which has free AllPoint access and up to $10 of non-Ally ATM fees reimbursed every month. This money market account is a nice way to provide yourself with overdraft protection while earning interest. If you don't need check-writing capabilities on your savings, you would still be better off with Ally's savings account.

on Ally Bank’s secure website

Member FDIC

3. Highest Overall Rate: ableBanking – 1.70% APY, $250 minimum balance, but no check-writing

Money Market Savings from ableBankingableBanking is a division of Northeast Bancorp, a community bank headquartered in Maine since 1872. The bank has over $1 billion in assets, and your deposit would be FDIC insured up to the legal limit. At 1.70% APY, this is the highest money market rate that we have been able to find (from a bank) in the country. There is a minimum deposit of $250, no monthly fee and you do not need to be a resident of Maine (any US resident can open an account). Unfortunately, the account does not come with check-writing privileges and there is no ATM access. You can deposit and access your funds via ACH (electronic transfer), which can take a couple of days. Just remember: there is a limit of 6 withdrawals per calendar month. When we called to ask questions about the account, we could reach a customer service representative very quickly. This is a good option from a small bank with a great high rate.

4. High Rate: Northern Bank Direct – 1.51% APY, $5,000 minimum to open, checks available

Northern Bank Direct is the online division of Northern Bank, which is located in Massachusetts. While you’ll have to deposit $5,000 to earn the 1.51% APY, you won’t be charged a monthly fee, you’ll have check writing capabilities, and access to surcharge-free ATMS through their affiliation in the SUM® Program. Just keep in mind that if you use an ATM that doesn’t participate in the SUM® Program, you may be charged a fee from the ATM’s owner or operator. You can also make withdrawals online through their electronic funds transfer feature, but if you make more than six transfers per month regardless of which transfer method you use, you’ll be charged $20 for each additional transfer. They don’t limit how many deposits you can make and you’re able to deposit money into this money market account straight from their mobile app. This is a great option for savers with high balances who want the ability to write checks, have ATM access, and bank on-the-go.

5. High Rate: My eBanc – 1.50% APY, $5,000 minimum to open, checks available

My eBanc, the online division of BAC Florida Bank, is currently rewarding a 1.50% APY on their Super Saver Money Market Account. You’ll need $5,000 to open the account and you’ll need to maintain an average daily balance of $5,000 during the statement cycle to avoid their monthly fee. If the average daily balance falls below $5,000, a $15 fee will be charged. If you choose to open more deposit accounts with My eBanc, they’ll assess the aggregate amount between all accounts. If the aggregate amount is $5,000 or more, they’ll also waive the $15 fee. Check writing is available, but they limit the amount of checks you can write to six due to regulatory limitations. They also offer a debit card if you open their Advantage Checking account at the same time you open their money market account. If you choose to just open their Super Saver Money Market account, they’ll issue an ATM card. They’ll reimburse all ATM transaction fees. Just keep in mind that you’re limited to six transactions per statement cycle regardless of the method you choose to withdraw funds. If you go above that limit, you’ll be charged $10 per additional transfer. If you exceed six transfers in any three months during a 12-month period, My eBanc will close the account. Good news is, you’ll be able to make as many deposits as you’d like and you can do so through their mobile banking app. You’ll also have access to their Money Management Tool, which allows you to keep track of all of your accounts regardless of whether it is a My eBanc account or not.

6. High Rate: Salem Five Direct – 1.50% APY, $100 minimum to open, but no check-writing

Statement Savings Account from Salem Five DirectIf you don’t have $5,000 to deposit, but still want to earn a good rate on a money market account, you can open an account with Salem Five Direct for only $100. While they don’t offer check-writing capabilities, they do issue a debit card to make withdrawing funds easier. Salem Five Direct also complies with Regulation D by limiting the number of transactions account holders can make to six. If the limit is exceeded, they’ll charge $10 per additional transaction. One other limitation this bank imposes is an External Transfer limit. You will only be able to transfer $5,000 per day and $20,000 per month. So, this account may not be right for you if you tend to withdraw more those amounts. While Salem Five Direct truly does offer a great rate for the right price with this account, they do have a lot of limitations including their online and mobile experience.

7. High Rate: Nationwide Bank – 1.50% APY, $10,000 minimum balance

Savings Account from Nationwide BankWhen you think of Nationwide, you probably think about insurance. However, they offer more than just auto and home insurance. With $1,000 to open their money market account, you can automatically earn an APY of 1.15%. However, in order to earn their 1.50% APY, you’ll have to have a balance of $10,000 or more. They do charge a monthly maintenance fee of $8, but will waive the fee if you maintain a minimum of $1,000 daily. They do have check-writing capabilities as well as an ATM card. The first two ATM transaction made from a non-Nationwide Bank ATM is free per statement cycle, but they’ll charge $1.50 per additional ATM transaction made at a non-Nationwide Bank ATM. Transactions are limited to six per statement cycle and a $5 fee is charged per each additional transaction. They offer online banking and a mobile app that has a remote deposit feature to make your digital banking experience easier.

8. Top Choice: Sallie Mae - 1.50% APY, no minimum balance and checks available

Money Market from Sallie Mae BankIf you have student loan debt, you probably are not very excited to see Sallie Mae at the top of this list. However, many people are unaware that Sallie Mae also operates an internet-only FDIC-insured bank with some of the best interest rates in the country. You can earn 1.50% APY, compounded daily and paid monthly. There is no minimum balance and no monthly maintenance fees. You will have check-writing capabilities (although the standard money market limit of six per month applies to this account). The easiest (and best) way to fund and access your funds is via electronic transfer from your existing checking account. If you want a simple account with no fees and check access - this is a good bet. Sallie Mae has just recently increased the APY (it was previously 1.45%), making this one the best rates in the country.

9. High Rate: Self-Help Credit Union - up to 1.43% APY, $500 minimum deposit and minimum balance

Money Market from Self-Help Credit UnionSelf-Help is a credit union that anyone can join. If you don't live, work or worship in one of their eligible counties, you can join by donating $5 to the Center for Community Self-Help. The contribution is tax deductible and will make you eligible for credit union membership. (You can learn more about how to join the credit union here.) At a credit union, your funds are insured up to $250,000 - but it is by the NCUA instead of the FDIC. The money market offers an APY of 1.33% on balances from $500 to $500,000. Even better - you can earn 1.43% APY on balances above $500,000. However, you need to deposit at least $500 and the balance during the month cannot go below $500 - otherwise you will be charged a monthly maintenance fee. You are allowed 6 free withdrawals or transfers from the account each month (including checks).

10. Great Rate for Small Deposits: Premier Members Credit Union – 3.00% APY up to $2k

Premier Members Credit Union is open to anyone willing to make a $5 donation Impact on Education, a charity for the Boulder Valley School District. This credit union is currently offering an incredible rate of 3.00% with only $5 to open the account. You can earn this APY on balances up to $2,000. Amazingly, even if you grow the balance up to $5,000, you’ll earn a minimum of 2.10% APY. As the balance increases, the APY decreases to the following:

  • $5,000.01-$10,000: 2.10%-1.42%
  • $10,000.01-$50,000: 1.42%-0.69%
  • $50,000.01-$100,000: 0.69%-0.54%
  • $100,000.01-$250,000: 0.54%-0.43%
  • $250,000.01+: 0.43%-0.30%

Premier Members Credit Union rewards low balance savers by placing the highest rate with the lowest deposit, but if the balance grows they start using a reverse tier system where they blend the APY as the balance grows. Checks are available with this account, but you can only make six withdrawals per month. Each additional withdrawal will be assessed a $10 fee.

3 Questions To Ask Before Opening A Money Market Account

1. Should I open a savings account or a money market account?

Many years ago, money market accounts were higher risk and paid higher returns. The financial crisis of 2008 changed all of that. Money market accounts are now FDIC-insured up to the legal maximum ($250,000 per institution per individual). Interest rates are now very similar - and there is no material difference. In other words - choose whichever account you want.

In general, you tend to get slightly lower interest rates on money market accounts because you have check-writing capabilities. The best savings accounts pay at least 1.50% APY - very similar to the rates on this page. But at Ally, for example, you can get 1.35% APY on a savings account (no check-writing) and 0.90% on the money market account (with check writing).   

We have written a full explanation of the difference between money market and savings accounts here.

2. Am I willing to make a longer term commitment? 

Savings accounts and money market accounts pay much lower interest rates than CDs. Right now you can easily get a 1-year CD paying 1.85% APY (with only a $2,000 minimum). You can find the best CD rates here. If you build a CD ladder, you can take advantage of 5-year rates that are now as high as 3.00%.

Money market accounts are great places to keep money that you might need immediately. But the interest rate on a money market account can change right away, at the bank's discretion. To lock in a higher interest rate, you should consider a CD. If you need to get access to your CD early, would forfeit interest (typically from 3-6 months). In most circumstances, putting more of your money into CDs can really help boost your returns.

3. Is a money market account the same as a money market fund? 

No, money market accounts (offered by FDIC-insured banks) are not the same as money market funds (most likely sold by your broker). In fact, we really don't know why people even buy money market funds in the current environment.

For example, Vanguard offers the Prime Money Market Fund. Like other money market funds, this one "invests in short-term, high-quality securities." Its objective is to keep the fund trading at $1 and generate a decent return. Right now that return is 1.00% - a bit lower than the returns you see from the money market accounts listed in this article. However, money market funds do not have FDIC insurance.

Most people compare the return of a money market fund (sold by their broker) to the interest rate paid by a traditional bank (0.03%, sold by their local bank teller). As a result, they are willing to take the risk of a money market fund. However, as you can see from the best money market accounts in this article, you can get FDIC insurance and beat the return of most funds. Why earn 1.00% with no FDIC-insurance when you can easily earn 1.60% and have FDIC insurance.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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