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 excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.91%, 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
|Bank||APY||Minimum deposit amount|
|Live Oak Bank||2.00%||$2,500|
|Prime Alliance Bank||2.04%||$500|
Merrick Bank — 2.19% APY, $25,000 minimum deposit
Merrick Bank’s 6 Month CD earns at a rate comparable to its long-term counterparts. Just watch out for its high minimum deposit requirement of $25,000. Making an early withdrawal from this account will trigger a penalty equal to 1% of the account balance or seven days’ interest, whichever is greater.
Merrick Bank was founded in 1997.
CD Bank — 2.35% APY, $10,000 minimum deposit
CD Bank also offers an equally competitive 6 Months CD, but requires a pretty high minimum deposit of $10,000. The early withdrawal penalty equals three months’ interest on the amount withdrawn.
CD Bank offers only CD accounts that range from three to 60 months. CD Bank is an online division of TBK Bank, which is itself a subsidiary of Triumph Bancorp, Inc.
TAB Bank — 2.24% APY, $1,000 minimum deposit
TAB Bank requires a minimum deposit of $1,000 to get started with its CDs like its 6 Month CD. Just watch out for an early withdrawal, as you’ll lose 90 days interest on the amount withdrawn subject to penalty.
TAB Bank was founded in 1998.
Live Oak Bank — 2.00% APY, $2,500 minimum deposit
Live Oak Bank’s shortest term, the 6 Month CD, earns at a competitive rate not far behind the bank’s longer-term CDs. It requires a $2,500 minimum deposit to open and earn interest. The early withdrawal penalty will equal 90 days’ interest.
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.
Prime Alliance Bank — 2.04% APY, $500 minimum deposit
For the best 6-month CD rate from a bank, head to Prime Alliance Bank. It requires at least $500 to open. The early withdrawal penalty will equal one months’ worth of interest on the amount withdrawn.
Still accessible online, Prime Alliance Bank’s one branch is located in Woods Cross, Utah. The bank was founded in 2004.
Credit unions with the best 6-month CD rates
|Credit Union||APY||Minimum deposit amount|
|Communitywide Federal Credit Union||2.35%||$2,000|
|INOVA Federal Credit Union||2.10%||$200|
|Veridian Credit Union||2.10%||$1,000|
|State Department Federal Credit Union||2.06%||$500|
|ABCO Federal Credit Union||2.05%||$1,000|
Communitywide Federal Credit Union — 2.35% APY, $2,000 minimum deposit
With at least $2,000, you can open a high-yield 6-month CW Certificate Account online. The early withdrawal penalty from this account is equal to the amount withdrawn multiplied by the remaining days left in the term.
Founded as a credit union to provide quality financial services to individuals in South Bend, Ind., Communitywide Federal Credit Union has grown to offer their services to various communities within Indiana as well as the digital world.
Anyone can become a member by donating to a list of organizations including the Y.M.C.A. If you’re a member of the Michiana Goodwill Boosters or Marine Corps. League of St. Joseph Valley, you’re also eligible to become a member.
INOVA Federal Federal Credit Union — 2.10% APY, $200 minimum deposit
If you’re willing to wait just one more month for your CD to mature, INOVA Federal Credit Union offers a high-yield 7 Month CD. Plus, it requires only $200 to open. The early withdrawal penalty will equal 90 days’ dividends.
INOVA was founded in 1942 to serve the employees of Miles Laboratories. Today, you can qualify for INOVA membership through your employer, membership in other organizations or through an immediate family member. INOVA has seven branches between Indiana and California and includes access to thousands of CO-OP Shared Branch locations.
Veridian Credit Union — 2.10% APY, $1,000 minimum deposit
You’ll need at least $1,000 to open a Veridian Credit Union 9 Month CD Special and start earning interest at this rate. Veridian bases its CD early withdrawal penalties on the amount of the CD, the term of the CD, how far away the CD is from maturity and how much you are wanting to withdraw.
Veridian Credit Union got its start in 1934, founded by John Deere employees. Veridian membership is open to residents and employees of businesses within the credit union’s field of membership, family or household members of eligible individuals, Iowans with disabilities as defined by the Americans with Disabilities Act of 1990 and registered Dwolla users.
State Department Federal Credit Union — 2.06% APY, $500 minimum deposit
With another low minimum deposit requirement, State Department Federal Credit Union requires just $500 to open an account. There are no service charges and interest is compounded daily. An early withdrawal from this account will lose you either 30 days of dividends on the amount withdrawn or the amount of dividends earned since the date of issuance, whichever is less.
Founded in 1935, SDFCU is headquartered in Alexandria, Va. Customers also have access to the CO-OP Shared Branch network.
State Department FCU membership is open to employees of The U.S. Department of State. Eligibility is also determined through select organization membership, an immediate family member or the American Consumer Council. You and your employees may also apply for SDFCU membership as a group.
ABCO Federal Credit Union — 2.05% APY, $1,000 minimum deposit
Take advantage of ABCO FCU’s 6-month Special CD to grow your money at a competitive rate over a short period of time. Open the account with at least $1,000. The early withdrawal penalty will equal 120 days’ worth of dividends.
ABCO was founded in 1958 and is headquartered in Willingboro, New Jersey. Membership is open to employees of select groups and organizations.
Pros and cons of using 6 month CDs
- 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.