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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 0.58%. 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 August 2020
1. Pen Air Federal Credit Union — 1.05% 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 1.05% 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 The penalty will be deducted from the amount withdrawn.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. Hiway Federal Credit Union — 1.10% APY, $25,000 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.
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. Sallie Mae Bank — 1.05% APY, $2,500 minimum deposit
Sallie Mae isn’t just for student loan management. You can also build your savings here, including with its several certificates of deposit. You just need $2,500 to open one. Making an early withdrawal will trigger a penalty equal to 180 days’ simple interest on the amount withdrawn.
Sallie Mae was founded in 1972 and offers savings accounts, loans, credit cards and more financial services and aid.
6. First Internet Bank — 0.96% APY, $1,000 minimum deposit
First Internet Bank’s 18-month CD continues to earn at a competitive rate. You’ll need $1,000 or more to get started with this account. Be wary of making an early withdrawal from the account, as it can cost a penalty equal to 180 days of interest.
Founded in 1999, First Internet Bank was the first FDIC-insured institution to operate entirely online. Today, you can still access your accounts not only online but also on mobile and over the phone.
7. Primary Bank — 1.00% APY, no minimum deposit
There are no minimum balance requirements on Primary Bank’s 18-month CD, but you may incur a penalty if you withdraw your money early, as is the case with all CDs. If you’re not sure you can commit to parting with that money for 18 months, you could consider one of the bank’s shorter terms of 12 or 15 months, which will still earn you an APY that would just miss this list by a few spots.
Primary Bank was founded in New Hampshire as a means of supporting small- and medium-sized businesses, but it also offers plenty of personal banking products.
8. Ally Bank — 0.95% APY, no minimum deposit
Ally Bank customers can take advantage of this high-yield 18-month CD, which earns at just as competitive a rate as Ally’s 3-year CD. As is always the case with Ally CDs, you don’t need a minimum deposit to open this account. Plus, Ally maintains the most generous early withdrawal penalty on this list, charging only 60 days’ worth of interest.
Ally Bank traces its history back to 1919, as the financing branch of GM, but today operates entirely online with a full suite of banking and other financial products and services.
9. Hyperion Bank— 1.00% APY, $500 minimum deposit
Hyperion Bank’s CDs can be opened with $500. These CDs automatically renew at maturity, or you can deposit the funds into your Hyperion checking account within the 10-day grace period at maturity. Withdrawing before your 18 months are up will cost you 270 days’ dividends.
Founded in 2006, Hyperion Bank is headquartered in Philadelphia. It has a branch there and in Atlanta. Customers can access Hyperion Bank online and on its mobile app.
10. 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.
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.