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Updated on Friday, July 9, 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 0.229% as of July 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 July 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. Presidential Bank (MD) — 0.50% APY, $1,000 minimum deposit
With a minimum deposit of only $1,000, you’ll snag this rate on Presidential Bank’s 182-day CD. Interest is credited at maturity on the bank’s short-term certificates, including this one. Early withdrawal will cost you the amount of interest you’d earn over 3 months. You’ll have 7 days, beginning with the date of maturity, to withdraw or add funds before the CD automatically rolls over.
Presidential Bank was founded in 1985 and offered its accounts online in 1995 — the first U.S. bank to do so. The bank’s main office is in Bethesda, Maryland.
3. 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.
4. NexBank — 0.50% APY, $10,000 minimum deposit
NexBank’s 6-month CD also requires a healthy amount at the outset, with a minimum of $10,000, and carries a maximum of $240,000. You’ll pay a penalty of 3 months’ interest on the amount withdrawn if you take funds out before maturity. Certificates can be opened online or through a banker and automatically roll over.
Dallas-based NexBank offers both personal and business banking.
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. CommunityWide Federal Credit Union — 0.80% 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.
2. Lafayette Federal Credit Union — 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.
3. Evansville Teachers Federal Credit Union — 0.55% APY, $1,000 minimum deposit
The 6-month certificate requires a low minimum of $1,000. Opening this account can help you lock in this solid rate that is only slightly lower than the rate offered for the credit union’s longer certificate terms of 8 months and 1 year.
Evansville Teachers Federal Credit Union was started in the 1930s by a handful of teachers from Evansville, Ind. Today, you don’t have to be an Evansville teacher — or a teacher at all, for that matter — to become a member. You can join Evansville if you’re an employee or retiree within their field of membership, as can family members and immediate household members. If you don’t qualify through these methods, you also can join by making a one-time $5 donation to the Mater Dei Friends & Alumni Association.
4. State Department Federal Credit Union — 0.45% APY, $500 minimum deposit
With another low minimum deposit requirement, State Department Federal Credit Union requires just $500 to open an account. There are no service charges, and interest is compounded daily. An early withdrawal from this account will lose you either 30 days of dividends on the amount withdrawn or the amount of dividends earned since the date of issuance, whichever is less.
Founded in 1935, SDFCU is headquartered in Alexandria, Va. Customers also have access to the CO-OP Shared Branch network.
State Department FCU membership is open to employees of The U.S. Department of State. Eligibility is also determined through select organization membership, an immediate family member or the American Consumer Council. You and your employees may also apply for SDFCU membership as a group.
5. Northrop Grumman Federal Credit Union — 0.45% APY, $2,500 minimum deposit
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. Withdrawing funds early will cost you 90 days’ dividends on the amount withdrawn. If your balance is below the required minimum, the CD will be closed and whatever money is remaining will be transferred to your savings account.
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.