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Updated on Friday, October 8, 2021
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, 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. The national average APY on 6-month CDs (among banks and credit unions) is 0.22% as of October 2021, 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 for more options.)
Banks with the best 6-month CD rates
As of October 2021 All rates expressed in annual percentage yield (APY) unless otherwise stated.
1. Quontic Bank — 0.55% APY, $500 minimum deposit
With at least $500, you can fund your high-rate 6-month CD by transferring money from another Quontic Bank account or an account at another bank via ACH or using Plaid’s technology. Interest is compounded daily and credited to your account each month.
Quontic Bank must approve any request to withdraw funds before maturity. If approved, Quontic will close your CD and assess a penalty equal to the interest for the full length of the 6-month term.
Quontic is a digital bank with headquarters in New York and one physical branch, located in Astoria, N.Y.
2. BankDirect — 0.50% 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 six 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you withdraw any amount from the principal before six months, you will lose 90 days’ interest on the principal amount withdrawn. Interest is compounded daily.
Founded in 1999, BankDirect is the internet banking division of Texas Capital Bank, headquartered in Dallas.
3. Marcus by Goldman Sachs (7-month) — 0.45%APY, $500 minimum deposit
Not only does the 7-month No-Penalty CD from Goldman Sachs Bank USA offer a solid short-term CD rate, but it also comes with the added benefit of no early withdrawal penalty starting seven days after opening the CD. 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.
Goldman Sachs Bank USA is also known under the Marcus brand, both operating online and under the purview of investment firm Goldman Sachs. It is accessible both online and via its mobile app, available in the Apple App Store and Google Play.
4. First Internet Bank — 0.45% APY, $1,000 minimum deposit
First Internet offers a standard, straightforward 6-month CD for a minimum deposit of $1,000. Interest is compounded and credited monthly. But there’s a steep penalty of 180 days’ interest — basically all of it — if you withdraw your money early. They also don’t offer monthly or yearly statements, so you’ll need to check on your investments online.
A subsidiary of First Internet Bancorp, this online bank, founded in 1999, has no branch locations but offers service online in all 50 states.
5. Limelight Bank — 0.45% APY, $1,000 minimum deposit
Online-only Limelight Bank offers consumers just four CD terms. The 6-month option earns at an excellent rate, and you need just $1,000 to open an account. Early withdrawal of any of the principal will cost you 90 days’ interest.
Limelight Bank is the online division of Utah-based Capital Community Bank. Founded in 1993, Capital Community Bank provides the FDIC insurance for your Limelight deposits.
Credit unions with the best 6-month CD rates
1. Lafayette Federal Credit Union (7-month) — 0.70% APY, $500 minimum deposit
Lafayette Federal Credit Union offers a handful of certificates, including its 7-month fixed rate certificate, which requires $500 to open. Interest is compounded and paid quarterly. An early withdrawal from this account will trigger a penalty equal to 90 days’ worth of dividends.
Lafayette Federal Credit Union was chartered in 1935 and is headquartered in Rockville, Md. Members can access its branches in Maryland, Virginia and Washington, D.C., and CO-OP Shared Branches nationwide. LFCU membership is open to those who live or work in its serviced areas; work at partner agencies or companies; or are an immediate family member of a current member. You can also join if you are an existing member or become a member of the Home Ownership Financial Literacy Council.
2. CommunityWide Federal Credit Union — 0.70% 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 at two times the current APR (divided by 365). The penalty will come out of the withdrawn funds.
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, Marine Corps League of St. Joseph Valley or Habitat for Humanity Helpers, you’re also eligible to become a member.
3. Interior Federal Credit Union — 0.56% APY, $500 minimum deposit
With a $500 minimum deposit, you can earn this APY from Interior. There are no maintenance charges, but early withdrawal penalties are 30 days’ worth of interest. You’ll also need to have a primary savings account with them to open a CD.
Interior Federal Credit Union was established in 1935 to promote financial wellness during the Great Depression for employees of the Department of the Interior. Today, the credit union serves U.S. residents nationwide. Anyone can join the credit union by joining the New Mexico Wildlife Federation, which you can do when you’re filling out your application. You may also be eligible through employment, organization affiliation, or an immediate family member.
4. Genisys Credit Union (7-month) — 0.50% APY, $500 minimum deposit
Take advantage of this 7-month share savings certificate special from Genisys Credit Union that earns well above their 6-month term by keeping your money tied up for only one extra month. Plus, you can open it with a modest $500. When it matures, if you don’t take your money out, it will automatically renew into a 6-month term. Interest is paid and compounded quarterly. The early withdrawal penalty is 90 days of earned dividends.
Michigan-based Genisys Credit Union opened in 1936. You can join if you live in certain Michigan, Minnesota and Pennsylvania counties or through a family member. But membership is open to anyone by contributing to the Arthritis Foundation or Paint Creek Center for the Arts.
5. Hughes Federal Credit Union — 0.50% APY, $1,000 minimum deposit
The 6-month certificate account from Hughes Federal Credit Union is available for a minimum deposit of $1,000. Dividends are compounded daily and credited monthly but are subject to a penalty of $35.00 or 90 days’ dividends (whichever is greater) for early withdrawal of funds.
Hughes has been around since 1952, originally established for employees of Hughes Aircraft Company. Several years and mergers later, membership is now open not only to the Tucson, Ariz., community but also to anyone who donates as little as $10 to Friends of the Oro Valley Library, Friends of the Pima County Library, Friends of the Green Valley Library, Friends of the Kirk-Bear Canyon Library, or the Tucson Audubon Society.
Pros and cons of using 6-month CDs
- Rates higher than savings accounts: The CD rates offered by banks and credit unions are generally higher than those on savings accounts.
- Fixed rates: The rates are fixed and guaranteed for the length of their term.
- Money available upon maturity: 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.)
- Lower rates compared to longer terms: Six-month CD rates are lower than those offered on longer CD investment terms.
- Early withdrawal penalties: 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.
- Rollovers can reset rates: 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.