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Updated on Tuesday, July 14, 2020
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, 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. The national average APY on 6-month CDs (among banks and credit unions) is 0.41%, 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
As of July 2020
All rates expressed in annual percentage yield (APY) unless otherwise stated.
#1 BrioDirect — 0.80% APY, $500 minimum deposit
If you’re willing to wait a little longer for your CD to mature, you can open BrioDirect’s High-Rate 9-Month CD with at least $500. You’ll still snag the best short-term CD rate out there. BrioDirect will assess a penalty of 90 days’ interest whether earned or not on any early withdrawals.
BrioDirect is the online brand of Sterling National Bank, which was founded in 1888.
#2 Marcus by Goldman Sachs — 1.00% APY, $500 minimum deposit
Not only does the 7-month No-Penalty CD from Marcus by Goldman Sachs offer a solid 1.00% annual percentage yield (accurate as of 7/9/2020), but it also comes with the added benefit of no early withdrawal penalty. This makes for more flexibility when saving with a CD, as you don’t have to worry about losing money to open another account with your CD funds. There is a $500 minimum deposit requirement.
Marcus by Goldman Sachs operates online under the purview of investment firm Goldman Sachs. It is accessible both online and via its mobile app, available only in the Apple App Store.
#3 BankDirect — 1.00% APY, $10,000 minimum deposit
The 6-month CD from BankDirect earns a top spot for its rate, but you will need to deposit a rather hefty minimum of $10,000 to earn it. On the plus side, the CD matures in just 6 months, so if you can afford to not touch your money for that long, it may be worth it. If you withdraw any amount from the principal before six months, you will lose 90 days’ — essentially all — interest, which is compounded daily.
Founded in 1999, BankDirect is the internet banking division of Texas Capital Bank, headquartered in Dallas.
#4 BankUnitedDirect — 0.90% APY, $1,000 minimum deposit
Boost your rate (and maturity wait time) a bit with BankUnitedDirect’s 9-month online CD. It earns 0.90% APY and requires a $1,000 minimum deposit to get started. Interest is compounded and paid monthly. The early withdrawal penalty for the 9-month online CD would be an amount equal to 30 days’ simple interest on the amount withdrawn.
BankUnitedDirect is the online banking division of BankUnited, N.A., which itself is a subsidiary of BankUnited, Inc. BankUnited was founded in 2009.
#5 TIAA Bank — 0.90% APY, $5,000 minimum deposit
To get this rate, you’ll need to open a 9-month Yield Pledge CD with the bank. The rate is on par with their 1-year rate, so if you want to access your money a bit earlier for not much loss in APY, this CD could be right for you.
Founded in 1998, TIAA Bank has its headquarters in Jacksonville, Fla. Its financial centers are limited to the state of Florida. TIAA Bank is part of the larger company TIAA, which also offers a wide variety of financial products and services.
Credit unions with the best 6-month CD rates
#1 CommunityWide Federal Credit Union — 1.10% APY, $1,000 minimum deposit
With at least $1,000, 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 its services to various communities within Indiana as well as online.
Anyone can become a CommunityWide member by donating to a list of organizations, including the YMCA. 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.
#2 Spectrum Credit Union — 1.00% APY, $500 minimum deposit
A $500 minimum deposit will net you this competitive APY. If you’re able to leave your money in for just a few months longer, the credit union’s 9-month APY is even higher. However, all certificates are subject to an early withdrawal penalty.
Spectrum Credit Union was founded as Bechtel Employees Federal Credit Union, but anyone can join Spectrum through membership to either the Contra Costa Historical Society or Navy League of the United States, both of which are nonprofits that require a small membership fee.
#3 Pen Air Federal Credit Union — 0.90% APY, $500 minimum deposit
Deposit just $500 into a Pen Air Federal Credit Union 6-month certificate to earn some solid savings. If you can afford to leave your money in for a year, you’ll get an APY that would land our top spot.
Founded in 1936, Pen Air FCU has 15 locations in Florida and Alabama. Pen Air membership is open to active duty or retired military, civil service employees, partnering select employer group employees or immediate family members of the previous options. You may also join by becoming a member of the Friends of the Navy-Marine Corps Relief Society, Inc., with a one-time $3 donation, which Pen Air will make on your behalf.
#4 Pinnacle Federal Credit Union — 0.85% APY, $500 minimum deposit
If you’ve got a few hundred dollars to stash away, consider parking your funds in a Pinnacle Federal Credit Union share certificate. The 6-month certificate requires at least $500 to open (as do the other certificate accounts). Early withdrawals from this account trigger a penalty of 90 days’ dividends. You can open an account online or at one of the credit union’s two New Jersey branches.
Pinnacle Federal Credit Union has been a not-for-profit credit union since 1962. It serves Edison, N.J. and the surrounding county with its two physical branches.
Pinnacle Credit Union offers membership to employees of select partner companies and their family members. The credit union currently serves over 300 companies and 20,000 members. You can also join by becoming a member of the American Consumer Council. PCU will pay the $5 membership fee.
#5 Northrop Grumman Federal Credit Union — 0.78% APY, $2,500
Northrop Grumman Federal Credit Union has a wide range of certificate terms. Its 6-month term savings CD can be opened with a deposit of $2,500. Dividends are paid monthly or at maturity. As an added perk, you can also use the funds as collateral for a loan.
Membership to the credit union is open to employees of Northrop Grumman and Metro Los Angeles Angeles County and their immediate family members, as well as anyone who becomes a member of the Southern California Historical Aviation Foundation, which will run you $60.
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.