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Updated on Saturday, August 1, 2020
Sometimes you need a shorter-term CD, but the rate of return on a 12-month CD just isn’t quite enough. Thankfully, many institutions offer 18-month CD or 19-month CD options. They typically have higher rates than a 12-month account, while remaining a viable choice for near-term savings goals when a 24-month CD would be too long a commitment.
The key is to find the right 18-month CD to maximize your savings. If you look around, you can find rates just around 1.10% APY, compared to the average 18-month CD rate of 0.63%. To make the search process easier for you, we’ve uncovered the best 18-month CDs using data from DepositAccounts.com to find the highest APY. We also took each account’s minimum deposit requirement into consideration.
The 10 best 18-month CD rates in July 2020
1. Pen Air Federal Credit Union — 1.10% APY, $500 minimum deposit
You’ll need at least $500 to open an 18-month Pen Air Certificate. Then you can start earning at its 1.10% APY. The early withdrawal penalty for this term will equal 180 days’ dividends.
Founded in 1936, Pen Air Federal Credit Union is based in Pensacola, Fla., and maintains locations in Northwest Florida and Southeast Alabama. Pen Air membership is open to you if you’re active duty or retired military, a civil service employee, an employee at a partnering Select Employer Group or an immediate family member of eligible members. You may also join by becoming a member of the Friends of the Navy-Marine Corps Relief Society, Inc., whose one-time $3 donation Pen Air will make for you.
2. CommunityWide Federal Credit Union — 1.10% APY, $1,000 minimum deposit
Open a CommunityWide Federal Credit Union term share certificate with at least $1,000 to start saving at its competitive rate. Note that CW does not automatically renew your certificate at maturity, leaving that choice up to you. CW calculates its early withdrawal penalty a little differently than other institutions. It will equal the amount of the withdrawal times the remaining term (in days) of the certificate at the rate of two times the certificate’s current APR (divided by 365). The penalty will be deducted from the amount withdrawn.
CommunityWide FCU was founded in 1967 as the West Washington Association Federal Credit Union, gaining its current name in 1985. You can join CW if you’re a member, employee or retiree of select organizations, a spouse of someone who died while a member or an immediate family member of qualified members.
3. Pacific National Bank — 1.15% APY, $1,000 minimum deposit
You’ll need at least $1,000 in new money to deposit into a Pacific National Bank 18-month CD. The account and its competitive rate are available online only. You can choose to have interest paid out incrementally or just at maturity.
Pacific National Bank began in 1982 as Banco Del Pacifico Internacional (BPI). It operates a handful of branches in Miami-Dade County, Fla., but you can easily access your accounts online, as well.
4. BankDirect — 0.85% APY, $10,000 minimum deposit
This CD from Bank Direct gets you near the top of the list, but it will cost you a minimum deposit of $10,000. Any interest you earn can be added back to the principal or transferred to your checking, savings or money market account with the bank. Avoid any early withdrawals, as you’ll lose 180 days’ interest as a penalty.
BankDirect is an internet-only bank with no physical branches. It is a division of Texas Capital Bank.
5. Signature Federal Credit Union — 1.00% APY, $500 minimum deposit
At Signature Federal Credit Union, your $500 minimum deposit will get you the same rate for an 18-month certificate as you would on a 3-, 4- or 5-year CD. Watch out for early withdrawals, which may lose you 270 days’ worth of dividends.
You’re eligible to join Signature FCU if you are a member or employee of various partner associations and organizations. If these do not apply to you, you can also open an account by becoming a member of the American Consumer Council.
6. Pinnacle Federal Credit Union — 0.44% APY, $500 minimum deposit
This 18-month certificate from Pinnacle Federal Credit Union actually scores you a better rate than its 24-month CD. There’s a minimum of $500 to open one, and funds are federally insured. Withdrawing your money early will cost you 365 days’ interest, which is compounded monthly.
Membership to Pinnacle is available to a number of affiliated employer groups, or to the general public by joining the American Consumer Council at no cost.
7. Marcus by Goldman Sachs — 1.00% APY, $500 minimum deposit
Under the brand Marcus by Goldman Sachs, Marcus by Goldman Sachs is a consistent rate leader for its online deposit accounts. Its 18-month CD here earns a solid 1.00% APY on deposits of $500 and above. If you fund your account within 10 days of opening, Marcus will guarantee you the highest rate it can offer on that account. The early withdrawal penalty equals 270 days simple interest on the principal at the rate in effect for the CD.
Marcus by Goldman Sachs was founded in 1869 and is headquartered in New York City. Marcus is accessible online and on its mobile app, available only in the Apple App Store.
8. USALLIANCE Financial — 1.02% APY, $500 minimum deposit
USALLIANCE Financial offers the chance to earn at a competitive special rate on its 18-month certificate when you open the account with money not currently held in a USALLIANCE deposit account. Plus, interest is compounded daily, which grows your money even faster. You need just $500 to open the account. Early withdrawal penalties will equal 360 days’ worth of dividends on the amount withdrawn.
USALLIANCE Financial was started in 1966 by a handful of IBM employees. Today, its membership has expanded; you can join USALLIANCE Financial through your place of residence, employer, place of worship, school or organization.
9. Luther Burbank Savings — 1.10% APY, $1,000 minimum deposit
Luther Bank Savings offers a straightforward 18-month certificate at a solid rate, with a minimum deposit of $1,000. As with most CDs, you’ll incur a penalty if you withdraw money before the CD matures.
Luther Burbank Savings bank was established in Santa Rosa, Calif., in 1983. It is still headquartered there, and maintains branches throughout California and one in Washington.
10. Hiway Federal Credit Union — 1.10% APY, $1,000 minimum deposit
This rate applies to Hiway Federal Credit Union certificate accounts from 12 to 23 months. Dividends are calculated using the daily balance method. Withdrawing funds from this Hiway Federal Credit Union certificate will cost you 90 days’ dividends, which is somewhat generous when compared to other banks and credit unions.
Hiway FCU was founded in 1931 for employees of Minnesota’s Department of Transportation. Individuals can also qualify by being a part of select Minnesota communities, working at partner companies or agencies or through family members. Everyone else can become a member of Hiway FCU by contributing to one of two organizations: the Minnesota Recreation and Park Foundation or the Association of the United States Army.
Is it worth getting an 18-month CD over a 1-year CD?
When we discuss CD rates, we tend to center the conversation on 1-year CDs. They’re helpful to look at when assessing changes in rates over time, typically compared to long-term CDs. They also the general starting point when creating a CD ladder. So where do the slightly longer 18-month CDs fit in?
18-month CDs are only six months longer than 1-year CDs. It might seem like too little of a difference, especially when you’re squirreling away cash. However, because of this extra time a bank gets to hold your money, banks are willing to pay higher rates on your 18-month deposits, thus boosting your savings a little bit more.
Let’s say you deposit $1,000 into a bank’s 3% APY 18-month CD. At maturity, you’ll have earned around $46. Making that same deposit into the same bank’s 1-year CD at 2% APY, would earn just a little over $20. Of course, rates vary from bank to bank. That’s why it’s important to look for the best CD rates for each term to make locking your money away more worthwhile.