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.
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 2.00% 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:
This is - by far - one of the best offers in the market today. You can earn an incredible 2.00% APY and only tie up your funds for 12 months. 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.
6 months - 6 years: Goldman Sachs Bank USA - 0.60% - 2.55% APY, $500 minimum deposit
Our advertiser Goldman Sachs Bank USA is the online consumer bank of Goldman Sachs (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. Here are the rates (which are within a few basis points of the best rates in the market):
Ally Bank 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: 1.50% APY
18-months: 1.60% APY (less than $5k); 1.80% APY ($5k minimum deposit) and 1.95% APY ($25k minimum deposit)
3-year: 1.85% APY (less than $5k); 1.90% APY ($5k minimum deposit) and 2.10% APY ($25k minimum deposit)
5-year: 2.25% APY (less than $5k); 2.30% APY ($5k minimum deposit) and 2.40% APY ($25k minimum deposit)
1-Year CD: CD Bank - 1.87% APY, $500 minimum deposit, must join the credit union
US Alliance is a credit union that anyone can join. The credit union was created in 1966 for employees of IBM. You can check here to see if you are eligible to join the credit union. If you do not meet any of those eligibility requirements, don't worry. You can join (for $15) the American Consumer Council. This is a one-time fee (and you can join here). Once you are a member, you can then join the credit union. US Alliance is offering a nice 1.87% APY for a one year certificate (CDs are called "certificates' at credit unions). Your money is insured by the NCUA (it is like the FDIC, but for credit unions).
22-Month Special CD from a Credit Union: Fort Knox - 2.25% APY, $500 minimum deposit
Fort Knox is a credit union that anyone can join. It has long been popular with MagnifyMoney readers for its credit card that pays unlimited 5% cash back on gas. The credit union has become increasingly competitive with interest rates on savings products. With this 22-month special offer, you will get a better rate than most 2-year CDs on the market. Given that we are in a rising rate environment, getting a better rate at a shorter term is an excellent deal. Your money will be insured by NCUA up to the legal limit.
3-Year CD: TIAA Direct – 2.20% APY, $1,000 minimum deposit to open
TIAA Direct is the internet banking brand of TIAA. If you aren't a teacher, you might not have heard of this company. However, for more than 100 years TIAA has been offering banking, investing and retirement products to teachers and other educators. With the online bank, your deposits are insured by the FDIC up to the legal limit. You need at least $1,000 to open a CD.
3-Year CD from a Credit Union: Fort Knox Federal Credit Union - 2.40% APY (35 months - almost 3 years)
Fort Knox Federal Credit Union is a credit union that anyone can join. The credit union is well known at MagnifyMoney - it offers a credit card that pays unlimited 5% cash back on gas, which is a great deal. Now its CD rates (called share certificates at credit unions) are competitive as well. There is a $500 minimum deposit to open the account. The dividends are paid and compounded quarterly. At a credit union, your deposits are insured by the NCUA, which has the same legal limits as the FDIC.
Synchrony has also increased its 5-year CD rate. You need $2,000 to take advantage of the 2.40% 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 would 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. You won't get rich with a 2.40% APY, but it has been a long time since we have seen rates this high. By comparison, the rate at Bank of America on a 5-year CD is only 0.15%.
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.
Chances are you haven’t heard of Live Oak Bank. After all, this lender, based mostly on the web, has only been around since 2008, and it mostly focuses on giving out small business loans to businesses in specific industries, such as veterinary practices or craft breweries.
That’s no reason to pass it up for your personal banking needs, however. In fact, this little gem of a bank has one of the best-kept secrets in the personal banking world: it has one of the highest savings account interest rates you’ll find from an online bank. (More on that below.) And, most of its other personal deposit accounts offer relatively high rates as well.
Let’s take a more in-depth look at its deposit accounts to see if they’re right for you.
How do Live Oak Bank’s savings accounts compare?
Up to $5 million
(but only up to $250,000 is FDIC-insured)
Rates current as of Jan. 17, 2018.
When it comes to the best savings accounts with high interest rates, Live Oak Bank currently has the highest rate. This means that Live Oak Bank is lowering the bar and allowing anyone to take advantage of these high interest rates, no matter how much is in his or her pocket right now.
What else do I need to know about Live Oak Bank’s savings account?
Live Oak Bank wants you to use your savings account, and use it often, which is one reason why it has no monthly maintenance fee. If there is no activity on your account for 24 months and your balance is less than $10.01, Live Oak Bank will take the remainder of your balance as a Dormant Account Fee and close your account.
Getting money into a Live Oak Bank savings account from an external bank account can take a little bit of time depending on how you do it. If you request the money through Live Oak Bank’s online portal, the funds won’t be available for up to five or six business days. But if you opt instead to send the money to Live Oak Bank from your current bank, the money will be available as soon as it’s received. Your Live Oak Bank savings account will start earning interest as soon as the money posts to your account.
You can easily withdraw your money at any time via ACH transfer. Simply log into your Live Oak Bank savings account and electronically transfer it to whichever bank account you wish. It’ll be available in two to three business days.
You are limited to making just six transactions (deposits or withdrawals) per month with this savings account. That’s not a Live Oak Bank thing; that’s a federal regulation imposed upon savings accounts in the U.S. If you absolutely can’t wait until next month to make another deposit or withdrawal past your allotted six per month, you’ll be charged a $10 transaction fee for each additional action.
This bank’s minimum deposit requirements also seem to be right on par with other bank’s minimum deposit requirements. The current best CDs out there have minimum deposit requirements both above and below Live Oak Bank’s $2,500 benchmark.
Rates current as of Jan. 17, 2018
What else do I need to know about Live Oak Bank’s CDs?
Only U.S. citizens and permanent residents are eligible to open these accounts. It’s a relatively straightforward process to open a CD: Simply complete the forms online, provide any needed documentation (such as your current bank account details), and wait for an account approval. Once your account is open, you can transfer over your deposit, where it will be held for five days before officially launching your CD.
If you need to take out your deposit early, bad news: As with many CDs, you’ll face an early-withdrawal penalty at Live Oak Bank. If your original CD term was for six months, one year or 18 months, you’ll be charged 90 days’ worth of interest. If your original CD term was for longer than that, you’ll be charged a higher rate of 180 days’ worth of interest.
If you are able to resist the urge to withdraw your money early, congratulations! Your CD will automatically renew into a second CD with the same term length. However, don’t panic if that’s not what you want: You have up to 10 days after the CD has matured to withdraw your money penalty-free and park it in your own bank account (whether it’s with Live Oak Bank or not).
Overall review of Live Oak Bank
It’s easy to overlook Live Oak Bank for other larger, more established consumer banks like Ally or Discover Bank. But Live Oak has some of the best CD rates around, and the best savings account available on the market today.
Lest you be scared away by its smaller name, consider this: This tiny-but-growing bank is getting rave reviews from customers and employees alike. It carries an “A” health rating, and has a top-notch online banking portal. About the only thing missing is a checking account to let you seamlessly do all of your daily banking with this great company.
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 1/10/18. 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.
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 more2. Be enrolled in e-statements3. 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.
Requirements to earn the high APY: You must complete the following actions each month:
1. Have at least $500 in direct deposits into the account2. Make at least 10 signature-based debit card purchases of $100 or more3. Be signed up for eStatements4. 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.
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: Synchrony Bank - 12-Month CD - 2.00% APY
Synchrony 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 $2,000 and lock in that rate for the duration of the term once the account is funded.
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 Jan. 9, 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.
Minimum Deposit Amount
M.Y. Safra Bank
M.Y. Safra Bank
M.Y. Safra Bank
Veridian Credit Union
Veridian Credit Union
M.Y. Safra Bank
M.Y. Safra Bank
As of Jan. 9, 2018
Banks that offer the best jumbo CD rates
M.Y. Safra Bank
M.Y. Safra Bank holds four spots on this list, which means it has competitive rates for jumbo CDs of a few different terms. 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 1.16%. For the six-month jumbo CD, the APY is 1.42%. The APY on their one-year jumbo CD is 1.85%. The APY on the three-year jumbo CD is 2.15% and for the four-year jumbo CD, the APY is 2.25%. Their five-year jumbo CD’s APY is 2.50%. 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.
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 a 15-month jumbo CD with an APY of 1.91%, which is a good alternative to an 18-month jumbo CD. Veridian CU also has a very competitive rate on a two-year jumbo CD for 2.02%.
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.
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.
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.
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 Jan. 8, 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 Jan. 8, 2018.)
The top IRA rates in January 2018
3 Month IRA CD – EverBank, 3 Month Yield Pledge IRA
Three-month IRA CDs typically offer the lowest interest rates of any IRA CD term. EverBank offers the best rate of 1.01% APY and a minimum deposit of $5,000. That rate is well above the national average.
Six-month IRA CDs typically earn a little bit better, but they’re still not great. Nationwide Bank offers the highest interest rate at 1.20% APY for deposits less than $100,000. That translates into an earning of $5.98 on a $1,000 deposit. Compare that to the average of all regular 6 month CDs, at 0.42%.
1-Year IRA CD Rates – Synchrony Bank, 12 Month IRA CD (Traditional, Roth)
Regular one-year CDs earn an average interest rate of 0.66% APY. Synchrony Bank, however, is offering a one-year IRA CD at 2.00% APY. You’ll need a $2,000 minimum deposit to earn $40 in interest once the CD matures.
18-Month IRA CD Rates – Service Credit Union, 18 Month IRA Certificate Special (Traditional, Roth, CESA)
18-month regular CDs earn an average interest rate of 0.81% APY. Service Credit Union, on the other hand, is currently offering 2.00% APY on a 18-month IRA CD. This would translate into an earning of $30.15 with a minimum $1,000 deposit.
2-Year IRA CD Rates – American Heritage Federal Credit Union, 24 Month IRA Certificate (Traditional, Roth)
Two-year regular CDs earn an average interest rate of 0.92% APY. American Heritage Federal Credit Union, on the other hand, is currently offering 2.01% APY on a 2-year IRA CD. This would translate into an earning of $40.60 with a minimum $1,000 deposit.
3-Year IRA CD Rates – EverBank, 3-Year Yield Pledge IRA (Traditional, Roth)
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 2.20% APY with their 3-Year Yield Pledge IRA CD. With those interest rates and a $5,000 minimum deposit, you would earn $337.21 when the certificate matures.
4-Year IRA CD Rates – EverBank, 4 Year Yield Pledge IRA (Traditional, Roth)
Four-year regular CDs are currently earning an average interest rate of 1.32% APY. GTE Financial again claims the top interest rate for these IRA CDs, with an interest rate of 2.30% APY. You would earn $476.11 on this CD with a $5,000 minimum deposit.
5-Year IRA CD Rates – United States Senate Federal Credit Union – 60 Month IRA (Traditional, Roth, SEP)
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 1.59% APY, however United States Senate Federal Credit Union outperforms the average with a 2.63% APY on its 5-year IRA CD for members. The minimum deposit is $1,000 to earn this APY, but you can earn an APY of 2.70% if you deposit a minimum of $20,000 and an APY of 2.76% if you deposit a minimum of $60,000.
on United States Senate Federal Credit Union’s secure website
6+ Year IRA CD Rates – Air Force Federal Credit Union, 7 Year IRA
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 United States Senate Federal Credit Union which offered a 2.63% 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.
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.
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 Jan. 5, 2018, and we excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.42%, 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
6 month CD APY: 1.55% 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
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
6 month CD APY: 1.44% Bank information: Although Limelight Bank is located in Utah, they are an online bank that serves customers nationwide. They are environmentally conscious and originate loans for solar projects from customers’ various deposit accounts. Where to open CD account: Online Minimum balance to open: $1,000 Maintenance fees: $0 Early withdrawal penalties: Determined by bank.
6 month CD APY: 1.48% 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
6 month CD APY: 1.42% 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
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.
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.
6 month CD APY: 1.10% Credit union information: Headquartered in Evansville, Ind., Evansville Teachers Credit Union was created in 1936 by teachers who wanted to help their colleagues get back on their feet after the Depression. Decades later, this credit union has continued to live by their “People Helping People” philosophy by extending their financial services to groups and organizations outside the educational realm. Membership details: If you are employed, retired from, or have a relationship with someone affiliated with their eligible groups, you are eligible for memberships. Where to open CD account: Open an account online or one of their branches. Minimum balance to open: $1,000 Maintenance fees: $0 Early withdrawal penalties: The credit union imposes penalties based on withdrawals made before maturity.
6 month CD APY: 1.10% Credit union information: Oklahoma Credit Union mainly serves the city of Tulsa. Membership details: Anyone who is already a member of any other credit union is eligible to join Oklahoma Credit Union. Employees and retirees of over 1,100 companies that are affiliated with this credit union are also able to join. And, of course, you also qualify if you have family who are already members of this credit union. Where to open CD account: Branch locations and online Minimum balance to open: $1,000 Maintenance fees: $0 Early withdrawal penalties: Determined by credit union.
6 month CD APY: $60,000-$99,999.99, 1.10%; $20,000-$59,999.99, 1.06%; $1,000-$19,999.99, 1.02% Credit union information: Founded during the Great Depression, the United States Senate Federal Credit Union initially strived to provide Senate workers with quality financial services. However, the credit union has since evolved to provide services to individuals outside of the Senate. Membership details: In addition to providing membership to those who are employed, or have family members who are employed, by one of the many organizations listed on the United States Senate Federal Credit Union’s website, individuals can become eligible for membership by becoming a member of the American Consumer Council with a $10 donation. Individuals can also qualify with a $50 donation to the U.S. Capitol Historical Society. Where to open CD account: At a branch location, via email, or over the phone Minimum balance to open: $1,000, $20,000, and $60,000. Maintenance fees: $0 Early withdrawal penalties: 90 days’ of interest
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.)
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.
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 September 2017, the average one-year credit union CD had a 0.63% annual percentage yield (APY), compared to the 0.51% APY average among one-year bank CDs. (You may also want to view our picks for the overall best CD rates.)
Using data from DepositAccounts.com, another LendingTree company, we identified the top one-year credit union CD rates, as of Jan. 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 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 0.64% in August. 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
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.
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.
CapEd Credit Union – 12 Month CD, 1.75% APY, min. deposit $250
CapEd Credit Union supports teachers in the state of Idaho, but they don’t just serve teachers. Those who are willing to support education with a one-time $20 donation to the Idaho CapEd Foundation can become members of the credit union. Also, if you live in the state of Idaho and work for, volunteer with, or are retired from the industry of education, you are qualified for membership.
After becoming a member of CapEd Credit Union, you may open a 12 month CD with a minimum deposit of $250. Just make sure that you can afford to keep your money in the CD for one year because the early withdrawal penalty is 90 days’ worth of interest.
PenFed Credit Union – 1-Year Money Market Certificate, 1.61% APY, min. deposit $1,000
PenFed tops this list with an APY of 1.61%. With a minimum deposit of $1,000, you could earn $16.10 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.
Alliant Credit Union – 12-17 Month Share CD, 1.60% APY, min. deposit $1,000
With a minimum deposit of $1,000, you could earn an APY 1.60% on a 12-17 month CD. If you deposit $25,000 or more, you may be able to earn an APY of 1.65% 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.
Air Force Federal Credit Union – 1-Year Certificate, 1.56% APY, min. deposit $1,000
Members and family members of the military, civilian contractors, and certain employees are eligible to join the Air Force FCU, along with anyone willing to join the Airman Heritage Foundation ($25 annual membership fee).
This credit union comes in first place overall for highest interest rates for 12-month CDs. You can earn $15.60 by depositing a minimum of $1,000 in a 12-month CD, with an APY of 1.56%. You can also use your CD as collateral to earn a lower interest rate on a loan, and membership comes with a host of discounts for parks and businesses in the San Antonio, Texas area. Watch out for the early withdrawal penalties, however, worth half of whatever you would have earned between when you withdrew the funds and when it would have matured.
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, 2.16% APY, min. deposit $500
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 $10.80 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
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 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
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 1.50%. The early withdrawal penalty is 90 days’ worth of interest on a 12-month 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 September 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.
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.
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.
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.
As of 1/3/2018
USAA fixed jumbo CD rates
Fixed jumbo CDs require a minimum deposit of $95,000 and a maximum amount up to $175,000.
As of 1/3/2018.
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.
As of 1/3/2018
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.
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.
As of 1/3/2018
Adjustable Jumbo CDs need a $95,000 minimum deposit and rates are applicable up to $175,000.
As of 1/3/2018
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.
As of 1/3/2018
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.
Minimum Deposit Amount
As of 1/3/2018
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.
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.
Chase Bank is a consumer and commercial bank operated by JPMorgan Chase & Co., an international business firm dating back to 1799 that currently has $2.6 trillion in assets and operations worldwide. The bank, insured by the Federal Deposit Insurance Corporation (FDIC), has 5,100 branches and 16,000 ATMs across the United States. Its products include credit cards; checking, savings and CD accounts; and auto and home equity loans.
But Chase’s CDs are the subject of this article; they can be opened at a branch or completely online at term lengths ranging from one to 120 months.
How Chase CD rates compare with those of other banks
We compared Chase’s CD offerings with entries on our current list of the Best CD Rates. On the positive side, you’ll need less money to qualify for a Chase CD than you might at other banks. Chase allows customers to open their CDs with a minimum deposit of $1,000, which is slightly lower than qualifying amounts at some other institutions. Chase CDs are also open to applicants who do not bank with Chase, in contrast with the practices of some banks and credit unions that require member checking or savings accounts.
However, Chase CD rates are far from the most competitive rates out there. You can easily get find better APY rates at other institutions, particularly for one-year CDs. If you decide to go with Chase, look into so-called “relationship rates” with a higher APY. Relationship rates are offered to customers who link their CDs to a Chase personal checking account.
On a 12-month CD for under $10,000, for example, you’ll currently draw twice the percentage rate offered on the standard CD.
As mentioned, a minimum of $1,000 is required to open a Chase CD account, and interest is compounded daily. Depending on the term, your earned interest may be paid monthly, quarterly, semi-annually, annually — and at maturity.
Here’s an overview of the rates Chase currently offers on its CD products. All rates were reviewed at Depositaccounts.com, another LendingTree-owned company, and are current as of Jan. 2, 2018.
Chase CD relationship APY rates are extended to customers who have a linked Chase checking account. You can apply online and if you use a transfer from your account to open the CD, the account can be opened the same day. The minimum deposit is, again, $1,000.
Here’s a sample comparison between the APY on standard and relationship CDs on new accounts. To calculate on earnings at maturity, we assumed an account balance of $5,000.
Chase standard CD APY
Earnings at maturity
Chase relationship CD
Earnings at maturity
12 months at 0.01%
12 months at 0.02%
24 months at 0.05%
24 months at 0.15%
48 months at 0.10%
48 months at 0.25%
120 months at 0.70%
120 months at 0.90%
Important information about Chase CDs
There are no monthly service fees, however there are $15 fees for inbound domestic and international wire transfers (waived if from another Chase account) and outbound domestic wire transfer fees. Accounts can be opened online. Deposits of more than $100,000 must be opened at a Chase branch office.
Non-Chase customer access
You do not need to have a Chase checking or savings account to open a standard Chase CD account. You’ll need to provide a Social Security number, driver’s license and contact information. Deposits must be made from a checking or savings account through your existing bank.
Maturity date and grace period
Law requires banks to alert consumers before the maturation date on CDs. Chase considers the maturity date as the last day of the term. It offers a 10-day grace period on all CDs with terms 14 days or longer. During the grace period, you can withdraw the funds without penalty or roll over the account to another term.
Automatically renewable CDs versus single-maturity CDs
Account holders have the option of opening an automatically renewable or single-maturity CD account.
With an automatically renewable CD, the account renews on the maturity date for the same term as the original one, making the new maturity date the last day of the new term. The standard rate will apply unless the owner qualifies for a relationship CD.
The single-maturity CD does not automatically renew and earns no interest following the maturity date. You may want to see if Chase is offering any promotional rates during the 10-day grace period if you plan to invest in another Chase CD using a ladder strategy.
Earning interest on a Chase CD
Interest on Chase CDs begins to accrue on the first business day of deposit into your account and is calculated on a daily balance, 365 days a year. Paid or credited interest can be withdrawn during the term or at maturity without incurring penalties. For maturities of more than one year, interest will be paid at least annually, according to the bank. If the CD matures and automatically renews, the interest in the account is rolled over into the new principal.
Early-withdrawal penalties and fees
According to Chase, early-withdrawal penalties are deducted from your principal and do not exceed the total amount of earned interest. The penalty is 1 percent of the amount withdrawn if the term of the CD is less than 24 months. The early-withdrawal penalty is 2 percent for terms of 24 months or more.
Chase CD early-withdrawal penalties can be waived upon:
Death of a CD owner
Disability of a retirement CD owner
Retitling of a CD
A court ruling that the CD owner is incompetent
The bottom line:
Chase’s CD rates are likely best for customers who link the CD to their personal checking accounts because they can qualify for those juicier relationship rates. The rates improve for longer terms and larger deposit amounts. Chase’s online tools allow you to apply for relationship CDs and track your investments. The minimum amount to open a standard CD account ($1,000) is on par or slightly lower than those required by other institutions. Overall, the APY rates are not as good as you can get from some competing banks and credit unions.
Traditional banks are paying very low interest rates on money market accounts. For example, Bank of America pays between 0.03% and 0.06% 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 Bank of America's account at 0.03%, you will only earn $15 of interest over one year. That same money in an account paying 1.30% would earn you $675 of interest. And you can typically open and fund an online money market account in less than 10 minutes.
MagnifyMoney has searched for money market accounts paying the highest interest rates - and this list gets updated monthly. Here are the best rates for January 2018:
1. Top Rate: UFB Direct - 1.41% APY, $5,000 minimum balance to avoid a monthly fee
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 1.41% 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.
2. Top Choice: Sallie Mae - 1.45% APY, no minimum balance and checks available
If 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 1.45% 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 1.32%), making this one the best rates in the country.
3. High Rate: Self-Help Credit Union - up to 1.43% APY, $500 minimum deposit and minimum balance
Self-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).
EverBank, recently acquired by TIAA-Cref, is a rapidly growing bank that conducts most of its business online (even though it is based in Florida). In 2017, EverBank has become very aggressive on interest rates. Its products have regularly made our list of best CD rates, and - not surprisingly - it also appears on the best money market list. This is a great product, but you should be aware of a few pieces of fine print. The APY is only valid for one year. EverBank does promise that the rate, after the first year, will "never stray from the top 5% of competitive accounts." Just be prepared for a lower rate after 12 months. You need at least $5,000 to open the account. You will only earn the 1.31% APY on balances up to $250,000. There is no monthly account fee.
5. Great Rate: Capital One 360 - 1.40% APY on balances above $10,000 (0.85% on balances below)
Capital One is a famous credit card issuer (we are all familiar with the ad that asks us what is in our wallet). But many people don't realize that Capital One also operates a large online bank that pays highly competitive rates. In 2012, Capital One acquired ING Direct and re-branded it Capital One 360. With its money market account, you can earn a good rate for balance below $10,000 and one of the best rates in the country for balances above $10,000. Deposits are FDIC insured, up to the legal limit.
6. Great Rate for Small Deposits: All America Bank - 1.50% APY on balances up to $35,000
All America Bank is a small community bank based in Oklahoma. The bank was established in 1927 and deposits will be FDIC insured, up to the legal limit. Although most of the bank's lending activity is centered around Oklahoma, it has decided (like many other community banks) to raise deposits nationally, online. The "Mega Money Market" account is very attractive for people with smaller deposits. You can earn 1.50% APY for balances up to $35,000. Balances above $35,000 will earn 0.50%. You will get a free debit card (Visa) and there are no monthly maintenance fees. Like all money market accounts, you are limited to 6 deposits per month. At All America, you would be charged $5 for each additional withdrawal. The APY is subject to change. If you have a big deposit, consider one of the accounts higher on the list. But if you are looking for extra yield on a smaller deposit, this could be a good choice.
7. High Rate: ableBanking - 1.70% APY, $250 minimum, but no check-writing
ableBanking 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 now 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 new option (just added to the list in June) from a small bank with a great high rate.
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 1.15% APY - very similar to the rates on this page. But at Ally, for example, you can get 1.00 APY on a savings account (no check-writing) and 0.85% on the money market account (with check writing).
Savings accounts and money market accounts pay much lower interest rates than CDs. Right now you can easily get a 1-year CD paying 1.35% 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 2.30%.
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 0.89% - 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 0.89% with no FDIC-insurance when you can easily earn 1.05% and have FDIC insurance.