The Best 5-Year CD Rates in October 2021

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Updated on Monday, October 4, 2021

A Certificate of Deposit (CD) is one of the most conservative ways to grow your money: funds are deposited for a set time (called a term) at a predetermined interest rate. Once a CD has reached maturity, those funds can be withdrawn. If you access funds before that maturity date, you would have to pay a penalty.

The advantage of a CD is that you lock in the interest rate at the time of the deposit — however, you give up liquidity to do so. Five-year CDs have a long term, so those deposits have a significant time commitment. MagnifyMoney compiled the top nationally available 5-year CD rates available now using information from DepositAccounts.com. To earn these rates, minimum opening balances range from $250 to $25,000. The listed APY for each 5-year CD below applies to a $25,000 deposit.

Best 5-year CD rates of October 2021

1. Abound Credit Union (59-month) — 1.35% APY

59 Month CD from Abound Credit UnionAPY:1.35%
Minimum opening deposit to earn APY: $500
Duration: 59 months

Abound Credit Union is headquartered in Kentucky. In order to join, you must be active duty or retired military or civil service, as well as live, work, worship, attend school or conduct business in the state or be an employee of one of their select employer groups. On its membership application, Abound says eligibility is also open to others who don’t meet these criteria.

Abound offers the highest available rate on this term at 1.35% APY. They provide personal and business banking services, including other deposit accounts, loans and credit cards.

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on Abound Credit Union’s secure website

NCUA Insured

2. Lafayette Federal Credit Union — 1.26% APY

5 Year Fixed CD from Lafayette Federal Credit UnionAPY:1.26%
Minimum opening deposit to earn APY: $500
Duration: 60 months

Lafayette Credit Union is located in the Washington, D.C. area, but you can join the credit union from other locations by becoming a member of the Home Ownership Financial Literacy Council. There are other pathways to eligibility, including employer- and geographic-based criteria.

In addition to their 5-year CD, Lafayette offers variable-rate certificates that allow members to choose deposits that could change their interest rate before maturation — something to consider in an environment of low interest rates.

SEE DETAILS Secured

on Lafayette Federal Credit Union’s secure website

NCUA Insured

3. Affinity Plus Credit Union — 1.25% APY

60 Month CD from Affinity Plus Federal Credit UnionAPY:1.25%
Minimum opening deposit to earn APY: $500
Duration: 60 months

In order to become a member of Affinity Plus Credit Union, you must make a one-time $25 dues payment to the Affinity Plus Foundation, which is a charitable organization serving Minnesota communities. Otherwise, you can join if you attend or have graduated from certain universities in the state, if you live, work, or worship in certain communities, if you work for the state or if you live with or are related to someone who is a current member, among other avenues to membership.

Affinity offers members investment products, estate planning and insurance in addition to more standard banking services.

SEE DETAILS Secured

on Affinity Plus Federal Credit Union’s secure website

NCUA Insured

4. Teachers Federal Credit Union — 1.25% APY

60 Month CD from Teachers Federal Credit UnionAPY:1.25%
Minimum opening deposit to earn APY: $1,000
Duration: 60 months

Anyone can join Teachers Federal Credit Union, which was originally founded by a group of educators on Long Island but has since broadened its scope of membership.

Teachers’ longest CD term duration is 60 months, but it also offers one of the shortest available CDs at 3 months. Currently, that account has an APY of 0.25%. There are also jumbo CDs, as well as deposits for Coverdell Savings Accounts and Traditional and Roth Individual Retirement Accounts (IRAs).

SEE DETAILS Secured

on Teachers Federal Credit Union’s secure website

NCUA Insured

5. Wheelhouse Credit Union — 1.15% APY

60 Month Certificate from Wheelhouse Credit UnionAPY:1.15%
Minimum opening deposit to earn APY: $10,000*
Duration: 60 months

There are broad-based membership requirements for joining Wheelhouse Credit Union, which is headquartered in Southern California. You can join by becoming a member of the San Diego Automotive Museum with the passcode “wheelhouse” or becoming a Zoological Society member in San Diego County.

*Wheelhouse offers a few different rates for 60-month CDs: deposits from $500 to $9,999.99 earn 1.10% APY and deposits of $90,000 and above earn 1.10%APY. A rate of 1.15% APY is earned on deposits between $10,000 and $89,999.99.

SEE DETAILS Secured

on Wheelhouse Credit Union’s secure website

NCUA Insured

6. Hiway Credit Union — 1.15% APY

60 Month CD from Hiway Credit UnionAPY:1.15%
Minimum opening deposit to earn APY: $25,000*
Duration: 60 months

Applying to join Minnesota-based Hiway Credit Union is as straightforward as providing your driver’s license, Social Security number and $5 to fund a new Share Savings Account with the credit union. Some of their CD terms fall on odd months — usually a month less than a full year — but their 60 month CD is a full five years long.

*Hiway also offers other rates for 60-month CDs: deposits from $500 to $9,999.99 earn 0.95% APY and deposits from $10,000 to $24,999.99 earn 1.05%. The 1.15% APY rate is earned on deposits $25,000 and above.

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on Hiway Credit Union’s secure website

NCUA Insured

7. Quontic Bank — 1.11% APY

5 Year CD from Quontic BankAPY:1.11%
Minimum opening deposit to earn APY: $500
Duration: 60 months

Unlike the other financial institutions that made this list, Quontic is a bank and not a credit union. Quontic is a digital bank backed by the Federal Deposit Insurance Committee (FDIC) and offers some unique accounts, including a Bitcoin Rewards Checking account.

Quontic CDs have solid rates for multiple terms: 0.55% APY for six months, 1.02% APY for one year, 0.75% APY for two years and 1.00%APY for three years. Like most other banks and credit unions, the 5-year term is Quontic’s longest CD.

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on Quontic Bank’s secure website

Member FDIC

8. Interior Federal Credit Union — 1.22% APY

60 Month Share Certificate from Interior Federal Credit UnionAPY:1.22%
Minimum opening deposit to earn APY: $500
Duration: 60 months

In order to become a member of Interior Federal Credit Union, you have a couple options. If you’re a Department of the Interior employee, contractor or volunteer, you are eligible, but you can also join if you volunteer at a National Park at least once for three hours, join the New Mexico Wildlife Foundation or are an employee or volunteer of some affiliate groups.

Interior FCU members can deposit money into traditional CDs as well as Bump-Up Certificates, which allow account holders to bump up your interest rate during the term. Currently, the credit union offers a 56-month Bump-Up CD with a starting APY of 1.17% — which may be a better alternative to the full 5-year CD if you think interest rates will rise during that time.

SEE DETAILS Secured

on Interior Federal Credit Union’s secure website

NCUA Insured

9. AgFed Credit Union — 1.10% APY

60 Month Certificate from AgFed Credit UnionAPY:1.10%
Minimum opening deposit to earn APY: $250
Duration: 60 months

There are some membership eligibility restrictions with AgFed, but you may be able to join if you are located in the Washington, D.C., area or if you’re an employee or retiree of a Select Employee Group that includes many companies in the agriculture sector. You can also join if you’re a family member of someone who fits one of those criteria.

In addition to traditional CDs, AgFed members can open Asset Builder Certificates, which include more frequently compounding interest rates and the ability to deposit money during the duration of the CD term.

SEE DETAILS Secured

on AgFed Credit Union’s secure website

NCUA Insured

10. PenFed Credit Union — 1.25% APY

5 Year Money Market Certificate from PenFed Credit UnionAPY:1.25%
Minimum opening deposit to earn APY: $1,000
Duration: 60 months

Pentagon Federal Credit Union — often abbreviated to PenFed — is a credit union with membership eligibility that’s extended to everyone. You just need to open a savings account with an initial $5 deposit in order to become a PenFed member.

PenFed’s CDs are actually held as money market accounts, which differ slightly from regular CD deposits in how they’re funded by the financial institution.

SEE DETAILS Secured

on PenFed Credit Union’s secure website

NCUA Insured

Summary of the top rates for 5-year CDs

How CDs work

Term durations

Term durations are a key feature of CDs. By agreeing to the maturity date and interest rate at the time of the deposit, you know exactly how much the deposit will be worth when that date is reached. Until that date arrives, your money cannot be withdrawn without incurring penalties.

Common CD terms typically range from six months to five years, although some financial institutions can offer terms as short as three months. Sometimes a credit union or bank will have term durations that don’t fall neatly on an annual date. For example, Abound Credit Union’s top-ranked account has a term of 59 months, just short of five years.

Early withdrawal penalties

CDs are accounts that trade liquidity for security. In order to withdraw funds before the maturation date of a CD, account holders usually pay penalties that are calculated as a percentage of the interest borne on the account. Those penalties typically don’t result in a net loss on the CD, unless there’s a minimum penalty.

Some specialized CDs allow for penalty-free withdrawals, though the APY paid on those accounts is typically lower than traditional accounts with an early withdrawal penalty. Those may be a better option if you think that you might need the money before the maturation date — but a savings account could work as an alternative, as well.

CD ladders

You can choose to structure your deposits in a CD ladder to allow for more frequent access to your funds. A CD ladder is a strategy that suggests breaking up your entire intended deposit into smaller deposits that are made and subsequently rolled over.

Instead of depositing $50,000 into one 5-year CD, you could hypothetically deposit $10,000 into a 5-year CD every year over the course of five years. One-fifth of your deposit would then be available for withdrawals once a year starting with the maturation of the first CD. Otherwise, your entire deposit would mature on a five-year schedule.

Insurance

Deposit accounts like CDs are often insured by the FDIC or National Credit Union Administration (NCUA) up to $250,000. Banks are insured by the FDIC, and credit unions are insured by the NCUA. In the event of bank or credit union failure, the U.S. government will ensure that those deposits will be paid out. Before opening a deposit account, make sure you confirm that your financial institution is covered by the FDIC or NCUA.

Alternatives to CDs

If you’re seeking to safely store your money, there are several options in addition to CDs. Other deposit accounts are one option: A savings account will generally bear interest and allow for more frequent withdrawals or deposits than a CD. Checking accounts sometimes bear a little bit of interest, too, but they’re designed for frequent transactions.

As of late 2021, 5-year CD rates are at their lowest in years. The federal funds rate is currently set as low as possible due to the economic recovery, and the interest rates paid by deposit accounts have decreased significantly as a result. Since interest rates may rise over the next five years — and are unlikely to fall much — savings accounts actually may bear more interest relative to a CD over that timeframe. Plus savings accounts allow you to withdraw your money without penalty, the key downside to a CD.

The bond market could be another alternative. Unlike stocks, which could leave you exposed to market volatility, bonds are relatively safe, especially if they’re bonds backed by the government (private companies can also issue bonds).

In exchange for the initial investment, bondholders are assured that they will be worth a certain interest rate that’s paid out over the course of the bond’s duration, when the initial deposit is returned. Bonds are often packaged and sold together as mutual funds or exchange-traded funds (ETFs), and investors consider them to be a stable counterweight to stocks in an investment portfolio.

Should I open a CD now?

A CD provides a predictable way to grow your money: You’ll know exactly how much interest the account will bear over time by locking in an interest rate, though you forfeit liquidity over the duration of the CD term.

When deciding whether to open a CD, consider when you’ll need access to your money and how the CD’s interest rate compares with other savings vehicles — and whether you think those interest rates may soon rise. Interest rates tend to correlate with the federal funds rate, a target set by the Federal Open Market Committee (FOMC) depending on broad economic conditions. As of late 2021, that rate is set as low as possible due to the ongoing economic recovery following the COVID-19 pandemic.

If you lock your money into a CD in an environment of rising rates, you’ll lose out on some of the interest you may have otherwise earned. Ultimately, whether a CD is right for you depends on your personal financial situation and risk tolerance.

CDs: FAQs

A Certificate of Deposit (CD) is a savings vehicle that locks in an interest rate and maturation term when the initial deposit is made. Further deposits often cannot be made, and early withdrawals often come with a penalty. CDs are commonly offered at banks and credit unions.

A CD works as a timed deposit: You agree to a certain interest rate over a certain duration when opening an account, and you cannot withdraw money before the maturation date without incurring a penalty. Once that date has been reached, you’ll have the opportunity to withdraw funds or roll them over into another CD.

As of September 2021, the average interest rate paid on a 5-year CD is 0.27%, according to the FDIC.