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Best of

Best Online Banks in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

As the cost of operating brick-and-mortar locations grows, traditional banks have ratcheted up fees in turn and kept their rates stubbornly low. Online bank offerings, meanwhile, have only gotten more enticing. Since they incur lower overhead costs, they can pass those savings on to consumers in the form of higher yields and lower fees.

Average savings account rates among online banks nearly doubled from 0.79% in June 2017 to 1.52% in December 2018. With the Fed predicted to raise rates several more times in 2019, rates will likely continue their ascent. Brick-and-mortar bank rates, on the other hand, have seen little growth. Over the last year, the average rate inched from 0.16% to just 0.26% as of this writing. Credit unions haven’t fared much better, with average rates rising from 0.18% to 0.23% over the same time period.

Needless to say, in today’s rising rate environment, online banks are often the best option for consumers looking for higher returns on their deposits. And yet, it can be daunting to make the switch from one bank to another. In our inaugural Best Online Banks roundup, we hope to make the choice a bit easier for those looking to make the switch.

Best bank for CDs

How we picked the top five: We chose the bank with the highest 1-year CD rate and consistently held a spot on MagnifyMoney’s Best CD Rates page for two years.

#1 Ally Bank– Winner

Institution
APY
Minimum Account Balance to Earn APY
Ally Bank
High Yield 12-Month CD from Ally Bank

2.75%

$0

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Ally Bank is the best bank for CDs thanks to its consistently high rates, especially on its 1-year account. Ken Tumin of DepositAccounts.com (both MagnifyMoney and DepositAccounts.com are owned by LendingTree) agreed, pointing out the bank’s No Penalty CD offering, which offers a competitive rate without penalizing account holders for early withdrawals. The bank’s competitive rates extend across its three different CD account types — the High Yield CD, Raise Your Rate CD and No Penalty CD. Each CD’s rate applies to all balances, except on the 18-month and 3-year High Yield CDs, where higher balances snag higher rates. This spread of products makes it easy for you to grow your savings in a number of ways.

Even better, Ally Bank doesn’t require a minimum deposit to open any of its CDs. This opens up the opportunity to grow savings at Ally’s high rates to a wider variety of customers who may not be able to reach the high minimums at other banks. Ally Bank CDs also don’t charge monthly fees, allowing your money to grow undisturbed by unnecessary charges.

#2 Synchrony Bank

12 Month CD from Synchrony BankWith both standard and IRA CDs available, Synchrony Bank offers competitive rates across all its CDs. Its 1-year CD rate matches Ally’s (at time of writing), but Synchrony also requires at least $2,000 to open an account; this may place the accounts slightly out of reach for certain customers looking to save with CDs.

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#3 Marcus by Goldman Sachs®

High-yield 12 Month CD from Goldman Sachs Bank USAPreviously known as Goldman Sachs Bank USA, Marcus by Goldman Sachs is the consumer bank arm of investing giant Goldman Sachs. Through Marcus, you can find a High Yield Savings account in addition to its High Yield CDs and No-Penalty CDs. At time of writing, its 1-year APY is only slightly smaller than Synchrony’s, though it has not been the most consistent over the years. You’ll also need at least $500 to open a Marcus CD.

#4 Barclays

12 Month Online CD from BarclaysWith its London beginnings 300 years ago, investment bank Barclays has now made a big name for itself in the online banking space with its competitively high rates. Its 1-year CD rate matches the #3 entry on this top five list, ranking lower due to a lack of rate consistency over the past two years.

Barclays does fall short slightly in its total offerings, with only an Online Savings account and nine Online CD terms at the moment, while other banks often include a checking account or money market account.

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#5 Capital One

12 Month 360 CD from Capital OneCapital One 360 accounts are the standalone online bank offerings from Capital One. Capital One 360 accounts offer a convenient online banking experience with high-yield interest rates on its accounts. Its 1-year CD rate is on par with the top-ranked bank (its rates are just short of Ally’s and Synchrony’s) — still, you won’t need a minimum amount to deposit to open any Capital One 360 account, nor will you face monthly fees.

Best bank for savings accounts

How we chose the top five: We chose banks that had the highest savings account rate and consistently held a spot on MagnifyMoney’s Best Savings Account page for two years.

#1 Ally Bank – Winner

Institution
APY
Minimum Account Balance to Earn APY
Ally Bank
Online Savings Account from Ally Bank

2.20%

$0

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on Ally Bank’s secure website

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Ally Bank doesn’t come out top for CDs alone — it is also the best online bank for savings accounts. Its Online Savings Account has one of the highest industry rates and has consistently held a spot on MagnifyMoney’s Best Savings Account list for two years. Plus, you won’t need to worry about having a high balance to open or maintain this account, since Ally doesn’t require either.

In addition to its high rates, Ally Bank “excels in its online transfer capabilities, a feature that’s often overlooked by other banks,” according to Tumin. With its quick turnaround and zero to low fees, Ally’s transfer policies makes it much easier to access your money, especially in case of emergency.

#2 Barclays

Online Savings Account from BarclaysAlthough its savings account rate is consistently on par, and sometimes higher than, Ally Bank’s, the Barclays Online Savings Account hasn’t quite held onto a consistent ranking on our Best Savings Account list over the years. You still won’t have to worry about meeting a minimum deposit amount or grappling with a monthly fee to benefit from this great rate, though.

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#3 Marcus by Goldman Sachs

Goldman Sachs Bank USA
Offering a similar (and sometimes higher) savings rate on its Online Savings Account as Ally’s, Marcus by Goldman Sachs does require a minimum deposit (a mere $1) to start earning interest. You don’t need a minimum amount to open the account, though. You also won’t face transaction fees on your account, allowing your money to really grow in this competitive account.

#4 Synchrony Bank

Synchrony Bank
Synchrony Bank’s High Yield Savings account certainly delivers on its name with a competitive interest rate on all balances — plus, there’s no monthly fee. As is the case with all savings accounts, you’re limited to six outgoing transactions per statement cycle. Luckily, Synchrony won’t charge an extra fee on every additional transaction, but they could close your account if you keep it up.

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#5 Salem Five Direct

eOne Savings from Salem Five DirectThe only bank not in our top 5 banks for CDs, Salem Five Direct shows up big with its competitive eOne Savings rate. (If you’re lucky enough to have an account balance over $1 million, however, you’ll earn at a much lower rate.) You’ll need at least $100 to open the account; after that, you won’t face any other minimum requirements nor a monthly fee. The online bank has over 160 years under its belt through its parent bank, Salem Five.

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Best Bank for Money Market Accounts

How we chose the top five: The winner of the best bank for money market accounts is the bank that had the highest money account rate and consistently held a spot on MagnifyMoney’s Best Money Market page for two years.

#1 Sallie Mae Bank– winner

Institution
APY
Minimum Account Balance to Earn APY
Sallie Mae Bank
Money Market from Sallie Mae Bank

2.30%

$0

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Ending Ally’s winning streak, Sallie Mae Bank’s Money Market Account offers a rate well above the competition. The bank has had the highest money account rate and consistently held a spot on MagnifyMoney’s Best Money Market page for two years. While Sallie Mae is typically under associated with student loans, Sallie Mae Bank (under SLM Corporation) offers some great banking products designed to help you grow your savings efficiently.

Tumin noted that Sallie Mae’s “excellent money market rate is interestingly higher than the savings account,” whereas other online banks have chosen to focus more on their savings accounts. This Money Market Account doesn’t require a minimum balance, nor does it charge a monthly fee. Plus, it includes check-writing capabilities, a feature that Tumin considers crucial to a successful and true money market account.

#2 Capital One

360 Money Market from Capital OneThe Capital One 360 Money Market account earns interest according to two balance tiers. Your balances below $10,000 will earn at a lower, less competitive rate. The account’s much higher interest rate on balances of $10,000 and over, however, earn the account the second spot here. The account doesn’t include check-writing abilities nor an ATM card, so you’ll have to make some electronic transfers to other ATM-accessible accounts if you need cash.

#3 Self-Help Credit Union

Money Market from Self-Help Credit UnionThe first credit union in this roundup, Self-Help Credit Union is actually a group of member-owned, mission-driven credit unions, a nonprofit loan fund, and the Center for Responsible Learning. Growing from beginnings in North Carolina in 1980, the credit union now reaches over 145,000 members throughout the nation, with a solid branch presence in North Carolina, South Carolina, Florida, California and the Chicago metro area.

The Self-Help Credit Union Money Market Account’s high-yield interest rate comes at a bit of a cost. For starters, you’re required to deposit at least $500 to open the count. You’ll also need to maintain that balance to earn interest and waive the account’s monthly fee.

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#4 Ally Bank

Money Market Account from Ally BankAlly Bank is so highly focused on its savings account that it might have allowed its money market account to dip slightly, as mentioned above. Still, the account, which earns interest based on balance tiers, offers solid rates consistently enough to make this list. You’ll earn at the higher rate if you maintain a balance of at least $25,000; any balances below that will earn at a rate only slightly lower. In addition, it does well in terms of service — there’s no minimum amount you need to open or maintain the account.

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#5 ableBanking

Money Market Savings from ableBankingableBanking, a division of Northeast Bank founded in 1872, is an online bank and community that offers a number of high-yield deposit accounts. Its Personal Money Market account stands out with its competitive rate that reaches past Ally’s current highest money market rate. You will need at least $250 to open the ableBanking Personal Money Market account.

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Best Bank for Checking Accounts

How we chose the top five: Our best bank for checking accounts had to tick a few boxes — it had to charge no monthly maintenance fees, offer an out-of-network ATM fee refund, and consistently hold a spot on MagnifyMoney’s Best Checking Account page for two years.

#1 Ally Bank – winner

Institution
APY
Minimum Account Balance to Earn APY

Earning the title as the best bank for checking accounts, Ally Bank’s Interest Checking account has no monthly fees, refunds up to $10 in third party ATM fees each month, and consistently held a spot on MagnifyMoney’s Best Checking Account page for two years. The account also earns interest, where your balance determines your rate. Balances of $15,000 and over can earn the account’s higher rate, although neither rate stands out too much.

Still, Tumin noted that standard checking account rates are generally low everywhere. “Use Ally’s low fees, like their free overdraft transfers, to your advantage,” he says, to really get the most out of this kind of account.

#2 Charles Schwab Bank

High Yield Investor CheckingA division of the bigger brokerage firm, Charles Schwab Bank was launched in 2003. It currently offers only two accounts: a savings account and a checking account. This Schwab Bank High Yield Investor Checking® account, launched in 2007, earns at a decent rate. Plus, it comes with no monthly fee or a minimum deposit or balance requirement. The account includes a Platinum Debit Card, which you can use at any ATM in the world. If you face any foreign ATM fees, Charles Schwab Bank provides unlimited ATM fee rebates.

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#3 Aspiration

Aspiration AccountIf you’re looking for both a great checking account and a way to give back to your community, Aspiration is the bank for you — it donates an industry-leading 10% of its revenue to charities.

Interestingly, Aspiration partly makes its revenue through Pay What is Fair Fees. Essentially, you get to choose how much you want to pay for the bank’s products. Account holders set their own fee on the account dashboard, which then gets debited monthly from their Aspiration account or another linked account. And while this opens up the door to paying $0, the bank hopes you won’t, since it works to operate on the basis of trust and fairness with its customers. You can change the amount you pay at any time. For extra services like wire transfers, the bank promises to charge only the cost of completing that service.

This particular account, the Aspiration Summit Account, doesn’t charge a monthly service fee at all and earns at a pretty high interest rate for a checking account. You can also benefit from the bank’s free access to every ATM in the world. The account doesn’t require a minimum deposit to open or balance to maintain.

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on Aspiration’s secure website

#4 First Technology Federal Credit Union

Dividend Rewards CheckingThe Dividend Rewards Checking account from First Technology Federal Credit Union offers some great perks to customers who meet a few requirements. You’ll need to use your debit card for a minimum of 12 purchases, set up direct deposit or one recurring ACH withdrawal and enroll in e-Statements each statement period. These actions will qualify you for ATM fee rebates and the chance to earn the highest interest rate in this category. You can snag the higher rate by keeping your account balance under $15,000. Otherwise, a larger balance will start earning at a much lower rate.

Without meeting these requirements, your balance will still earn interest, just at a minimal rate. The account will never charge a monthly fee, regardless of your requirement qualifications. You also won’t face a fee when you use any of the 30,000 CO-OP Network ATMs in the country. Note that your money here will be insured by the National Credit Union Administration, instead of by the FDIC.

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on First Technology Federal Credit Union’s secure website

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#5 BankPurely

CheckingPurelyBankPurely is a division of Flushing Bank, focused on pairing banking with ethical, environmental and social issues. Not only does the bank decrease its carbon footprint with its online-only presence, but it also plants a tree for every CheckingPurely account opened. You’ll need at least $1 to open this account, but there’s no minimum balance to maintain afterwards. You also get to avoid a monthly fee on this account while still earning interest at a pretty solid checking account rate.

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Top online banks

How we chose the top five: The winners are the banks the showed up the most among the four categories.

#1 Ally Bank

From its 1919 beginnings as a financing division of GM, Ally Bank is now one of the biggest names in the online banking industry. It earns the title of Top Online Bank here because it showed up the most among the four above categories. In fact, it came out on top in every category except for Best Banks for Money Market Accounts — Tumin noted that its “savings account has been keeping competitive” while the money market account has seemingly fallen to the wayside, especially in the last year or two. Still, the account gets some credit for its check-writing abilities. Plus, the bank and its other products perform well with their consistently competitive interest rates and zero to low fees.

#2 Synchrony Bank

Synchrony Bank appears twice in our roundup categories as one of the Best Banks for CDs and one of the Best Banks for Savings Accounts. These placements land the bank in the second spot for top online banks. Not only does this mean that Synchrony offers some of the highest rates, but it also signals that the bank has been consistent in its rates offerings.

In addition to those accounts, Synchrony also offers a money market account, IRA CDs and an IRA money market account; there is no checking account at this time. If you elect to get an ATM card from Synchrony, you can use any ATM displaying the Plus or Accel logos without being charged by Synchrony. You can also receive ATM rebates up to $5 per statement cycle.

#3 Goldman Sachs Bank USA

Goldman Sachs Bank USA offers some of the highest rates in the industry. Like Synchrony before it, this bank ranked twice, making it into the top five banks for CDs and for savings accounts. At the time, these are the only kinds of accounts Goldman Sachs Bank USA offers. There is some variety with its High Yield CDs and No Penalty CDs, which offer the chance to make a withdrawal without facing a heavy penalty. While you don’t need a minimum deposit to open a savings account, you’ll need at least $500 for the CDs. They’re all still excellent accounts due to their high-earning rates and lack of monthly service fees.

#4 Barclays

Barclays is one of our top online banks thanks to its CDs and savings account, though these are the only kinds of accounts available through Barclays U.S. bank division. Neither of these accounts require a minimum deposit to open, which allows you to start saving no matter what amount you can set aside, and you won’t face monthly service fees for owning these accounts.

#5 Capital One

Changing it up slightly in this shortlist is Capital One, ranking as a top online bank for its money market account as well as its CDs. Its money market account didn’t make it to the top of that list, but it still offers a competitive interest rate for higher balances. Its CDs also continue to perform competitively, especially on its long-term accounts.

Best overall bank

How we chose the best overall bank: The best overall bank is the bank that ranked in the top five for all four categories — checking, savings, money markets and CDs.

Winner: Ally Bank

The best overall bank appeared in all four categories. In this case, Ally Bank dominated by placing first in each category, except for money market accounts, where it placed fourth. Ally continues to offer competitive rates across its savings, money market, checking and many CD accounts.

The bank started as GMAC in 1919, the financing division of GM and evolved over time to keep up with consumers’ needs and demands for a better bank. In 2009, GMAC became the online Ally Bank, focused on transparency with its customers and greater value on its accounts. Certainly since then, Ally has grown its offerings to include not only auto financing, but also high-yield deposit accounts, credit cards, investment accounts and more. Plus, its existence as an online bank means greater returns for you and more convenient 24/7 access.

APYAccount NameMinimum Balance Amount to Earn APY
2.20%Online Savings Account$0
2.75%High Yield 12-Month CD$0
0.10%Interest Checking Account$0
0.90%Money Market Account$0

Best new online bank

We chose the winner: To find the best new online bank, we found the bank that was launched within the last 12 months and has held the highest APY since it’s launch.

Winner: Vio Bank

Less than a year old and boasting an incredibly competitive interest rate on its High Yield Online Savings account Vio Bank certainly fits the bill for best new online bank, with. “They’ve got promise and potential with no monthly fee and no balance requirement,” Tumin said.

While there is no balance requirement to maintain the account and earn interest, you will need to open the account with at least $100. This is a pretty high requirement, especially for an online savings account.

APYAccount NameMinimum Balance Amount to Earn APY 
2.46%High Yield Online Savings Account$100

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2.35%12 Month High Yield Online CD$500

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LEARN MORE: Online vs. traditional bank accounts

Should I switch to an online bank account?

Switching to an online bank could be the right move if you’re really trying to boost your savings and you’re tired of the low yields a traditional bank provides. Online banks typically help you avoid high account fees and balance minimums, too. Certainly a big difference is the lack of physical branches. Still, online banks offer user-friendly online and mobile interfaces for increased convenience.

Even if you’re not convinced it’s time to ditch your big bank in favor of one of our picks, you don’t have to take an all-or-nothing approach to online banking. Often the biggest deterrents when people consider moving their banking online is that they have no physical branch locations to deposit cash or talk to a bank representative in person.

But “it doesn’t need to be all or nothing,” Tumin said. “If you have a local bank, you can do most of your banking with an online bank and have a checking account with your favorite local bank.”

With this strategy, you can get a feel of how to transfer money online, get more comfortable and then you can start transferring more money to the savings account, he added. You could also simply keep your accounts linked for the easier cash access. To really take advantage of an online bank’s high rates, you could keep the majority of your funds in a high-yield account to boost your savings more efficiently.

If you find that you’re comfortable with online banking, then great! You can either make the switch completely or split your money between your online and local bank depending on your preferences.

Choosing the right bank account

Choosing the right bank accounts depends entirely on you and what’s important to you. If having a physical branch location nearby is part of your ideal banking experience, then an online bank won’t be the right place to open all your accounts. Perhaps you don’t quite need a full service branch, just easy ATM access. Maybe you’re all for the high-yield accounts, typically found at online banks. Determining these preferences and necessities will help you narrow down your search.

Choosing a savings account: When looking for a savings account, it’s tempting to just plop your money into the easiest option at your local bank. Unfortunately, this approach to saving typically won’t get you the highest returns. Even if you just want to set some money aside, why not set it aside in an account that will earn you money with no extra work on your part? Look for a savings account that offers a high-earning interest rate. Even better, find one that doesn’t charge a monthly fee. That way, you’ll only be growing your money, not losing any to unnecessary fees.

Choosing a CD account: Finding a certificate of deposit, or CD, with a high interest rate is even more crucial. After you make your initial deposit, you won’t have access to that money until the CD term ends. You’ll want to make that deposit a worthwhile investment, especially if you open a CD that’s a year long or more. Before you rush into opening a CD, always check the account’s minimum deposit requirement. Banks will typically require anywhere from $500 to $10,000 to open a CD. Many online banks don’t require any minimum. Still, the larger your initial deposit, the more interest you’ll earn, especially since you cannot make additional deposits throughout the CD term.

Choosing a money market account: A money market account often works like a mix between a savings and a checking account. For starters, you’ll want to find one with a high-earning interest rate. Some banks may offer higher interest rates on their money market accounts than their savings accounts, but that’s not always the case. Plus, you may need to fork over large amounts to open the account or earn at the best rate. To get the best money market account experience, find one that provides an ATM card. That way, you can access your account more easily than a regular savings account. (You’re still limited to six outgoing transactions per statement cycle.)

Choosing a checking account: Finally, choosing the right checking account might be the most important since you’ll constantly be moving money in and out of your account. The best checking accounts are those that don’t charge a monthly fee. You shouldn’t have to pay a bank to keep your money safe and accessible. Even better, find a checking account that earns interest. That way, you can grow your money in all accounts, not just your savings.

Bank fees and fine print to watch out for

Traditional bank accounts are rife with fees. From monthly service fees to overdraft fees, paying bank fees like these can really cut into the savings you’re trying so hard to build. To avoid falling into this trap, it helps to start by finding bank accounts that don’t charge monthly fees. This is especially common at online banks.

You may have to search through the fine print and account disclosures for other potential bank fees. It’s important to look for fees charged for out-of-network ATM usage, excessive transactions, account inactivity and incoming and outgoing transfers, since you could easily run into them if you’re not careful. Some online banks may even charge you for paper statements.

Another big fee that you’ll want to avoid is an overdraft fee. You won’t want to overdraft your account in the first place, but always keep an eye on your balance so it doesn’t happen by accident. You can typically find these fees in an account’s fee schedule. Some banks may require you to call or visit a branch to learn more about their fees.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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Best of

The Best 5-Year CD Rates in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Five-year CDs offer some of the highest savings interest rates available. In exchange for keeping your money on deposit for half a decade, banks are willing to dole out higher returns on these long-term accounts. For example, in April, the average 1-year CD interest rate is 1.37% APY and the average 3-year CD rate is 1.86% APY, compared to the average 5-year CD rate of 2.25% APY.

Longer-term CDs do exist, but even their yields don’t often exceed 5-year CD rates these days. The highest yield on a CD of six or more years is 3.45% APY, though the next best rate comes in at 3.25% APY. 5-year CDs are also useful components to a CD ladder. When you build a ladder with CDs maturing a year apart, you can renew each one into a 5-year CD at maturity. This locks in the higher long-term rates for years to come.

To make sure you’re getting the best CD rates, MagnifyMoney has uncovered the highest 5-year CD rates available nationwide. Using data from DepositAccounts.com, similar to MagnifyMoney, a LendingTree owned company, we found that the best 5-year CD rates earned well above the national average interest rate for 5-year CDs. We also took minimum deposit requirements into consideration, to check for wider customer availability.

The 10 best 5-year CD rates in 2019

InstitutionAPYMinimum deposit amount

The Federal Savings Bank

3.30%$10,000

Alabama Credit Union

3.03%$500

Affinity Plus FCU

3.25%$500

Main Street Bank

3.25%$500

Sun East FCU

3.25%$500

Tampa Bay FCU

3.25%$500

Presidential Bank

3.25%
$1,000

Service Credit Union

3.25%$1,000

Superior Choice Credit Union

3.25%$10,000

Georgia Banking Company

3.20%$500

The Federal Savings Bank, 3.30% APY, $10,000 minimum deposit

To earn the highest rate on this list, you’ll need at least $10,000 to spare, as this is the minimum opening deposit required to open a Federal Savings Bank 5-year CD. The penalty for an early withdrawal from this account equals one year of interest.

Established in 2000, the Federal Savings Bank is veteran-owned and focuses heavily on mortgage lending throughout all 50 U.S. states. It has two retail banking branches in the Chicago area.

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Alabama Credit Union, 3.03% APY, $500 minimum deposit

The 60-month CD from Alabama Credit Union works better for those who have a lower minimum deposit starting point than the top-ranked CD. Plus, the rate is still competitive — only nominally lower than our top pick. Alabama Credit Union will assess a penalty equal to 360 days’ worth of interest for any early withdrawals you make from a 60-month CD.

Alabama CU was founded in 1956 to serve the University Of Alabama community, and is based in the school’s hometown of Tuscaloosa, Ala. Alabama Credit Union membership is available to employees of Value Partners (its name for the businesses and organizations it works with) and some members of their families, residents of select local communities and members of select associations.

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Affinity Plus FCU, 3.25% APY, $500 minimum deposit

To start earning at Affinity Plus FCU’s competitive rate on a 60-month basic certificate, you’ll need an opening deposit of at least $500. Early withdrawals from this account may trigger a penalty of 365 days’ worth of dividends.

Your Affinity Plus FCU membership eligibility depends on the organization where you’re employed or volunteer, your school or place of residence, work or worship or through eligible/current members; you can also easily join by making a one-time $25 donation to the Affinity Plus Foundation. Affinity Plus Federal Credit Union was founded in 1930 and is currently headquartered in St. Paul, Minn.

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Main Street Bank, 3.25% APY, $500 minimum deposit

Main Street Bank offers a great rate on its 60-month CD (and its 3-year CD) for a low minimum deposit of $500. An early withdrawal from this account will land you a penalty of 180 days’ worth of interest.

Founded in 2005, Main Street Bank is headquartered in Bingham Farms, Mich., and has a few branches in the Detroit area.

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Sun East FCU, 3.25% APY, $500 minimum deposit

At Sun East FCU, you only need $500 to start saving through a 60-month certificate of deposit. Plus, Sun East insures your deposits up to $500,000. The penalty for early withdrawals will depend on when during the term you make your withdrawal, according to Sun East FCU customer service.

Founded in 1949 by Sun Oil Company employees, Sun East serves members throughout Delaware, Pennsylvania and New Jersey. Sun East FCU membership depends on your place of residence, family members, employer or community, though you can also join with a $10 donation to the Sun East Charitable Foundation.

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Tampa Bay FCU, 3.25% APY, $500 minimum deposit

You can earn Tampa Bay FCU’s high 60-month share certificate rate on all balances starting at $500. The penalty for making an early withdrawal from this account will be six months of last dividends earned.

Tampa Bay Federal Credit Union was founded in 1935 by City of Tampa workers and was originally called Tampa City Employees Credit Union. Today, membership at Tampa Bay FCU is open to employees at select companies, select association members and members/residents of certain areas and organizations. You may also qualify through a current member or by joining Prime Time Club with a one-time, non-refundable $5 fee.

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Presidential Bank, 3.25% APY, $1,000 minimum deposit

You’ll need a slightly higher minimum deposit to open a Presidential Bank CD which requires at least $1,000. The bank will assess a penalty of 24 months’ worth of interest on any early withdrawal you make from its 5-year CD — the largest penalty listed here.

Presidential Bank was founded in 1985. Its main office is located in Bethesda, Md., with a handful of branches in the Washington, D.C. metro area.

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on Presidential Bank (MD)’s secure website

Member FDIC

Service Credit Union, 3.25% APY, $1,000 minimum deposit

Another great high-rate 60-month CD comes from Service Credit Union. It requires at least $1,000 to open an account and start earning interest. The penalty for early withdrawals equals one year’s worth of dividends, according to Service Credit Union customer service.

Service Credit Union membership is available to residents or those employed in select areas of New Hampshire and Massachusetts, as well as active duty military, veterans and their families and Department of Defense employees and their families.

Service Credit Union was founded in 1957. It has branch and ATM locations in Massachusetts, New Hampshire, Germany and at Grand Forks Air Force Base in North Dakota. You can also access to 5,000 shared branches and 30,000 fee-free ATMs within the SUM and CO-OP networks.

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on Service Credit Union’s secure website

NCUA Insured

Superior Choice Credit Union, 3.25% APY, $10,000 minimum deposit

While you only need $2,500 to open a Superior Choice Credit Union 5-year share certificate, you’ll need at least $10,000 to earn at its most competitive rate. All other balances will earn at a lower APY. According to Superior Choice Credit Union customer service, making an early withdrawal from this account will result in a percentage of your balance being charged as a penalty, including accrued interest.

Superior Choice Credit Union was established in 1932. It has a handful of branches in near its Superior, Wisc., headquarters, including one in nearby Duluth, Minn. You can also access over 30,000 fee-free ATMs and 5,000 branches nationwide and in Canada through the CO-OP Network.

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on Superior Choice Credit Union’s secure website

NCUA Insured

Georgia Banking Company, 3.20% APY, $500 minimum deposit

Georgia Banking Company’s 5-year certificate closes out our list. You’ll need a $500 minimum deposit to start earning at the given interest rate. The bank’s early withdrawal penalty equals six months interest.

Georgia Banking Company was established in 1998, and currently has two branches in the Atlanta metro area.

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on Georgia Banking Company’s secure website

Member FDIC

5-year CDs vs. savings accounts

If you’re simply looking for the highest rates available, 5-year CDs are going to seem much more appealing than a savings account. Even the best savings accounts can’t quite reach the 5-year CD rates you’ll find above. Plus, 5-year CDs lock in their rates at opening for the term of the investment, guaranteeing your rate of return. This can make for a great savings vehicle for conservative investors, who don’t want to ride the waves of an ever-changing economy.

Looking at the numbers, a $5,000 deposit into a 5-year CD at 3.25% APY (the most common rate in our list) would result in $882 of extra savings at maturity. Meanwhile, making a $5,000 deposit into one of the best savings accounts at 2.25% APY lands you with nearly $595 in savings after five years.

Savings accounts do provide easier access to your money, though. If you find yourself in a pinch suddenly, you can make a quick ACH transfer online or a withdrawal at a branch or ATM. Withdrawing from CDs isn’t as easy, especially when you account for the money you’ll lose to early withdrawal penalties. As you can see from the accounts above, early withdrawals from a 5-year CD can result in the loss of six months’ to two years’ worth of interest.

5-year CDs vs. other investment options

Investing in individual bonds — Treasury, municipal, or corporate — can be a solid alternative to saving with 5-year CDs. Non-Treasury bonds do have some risk by default as they don’t have the FDIC/NCUA insurance coverage limits. You can use these bonds to build a ladder similar to a CD ladder, so each bond matures a year or so apart.

An alternative to creating a bond ladder is to invest in a mutual fund or ETF of bonds. Unlike a ladder, however, the value of a bond mutual fund or ETF does fluctuate with interest rates. So when interest rates go up, the value of those investments will drop and vice versa.

The best way to maximize your 5-year CD investment

If you’re putting away money for five years, you’re going to want to make it worthwhile. For starters, CDs are best for those who have already maxed out their other savings accounts and have their emergency savings in a liquid savings account for easy access. They’re also better if you have a higher deposit to stash away. That will earn more interest in the long term for more tangible savings.

For example, placing $1,000 in a 5 year CD with a 3.25% APY will yield about $176 in savings by the end. Making a $10,000 deposit, on the other hand, lands you with a little over $1,764 in interest. That $176 is a good chunk of change, but you should make sure it’s enough to justify stashing away $1,000 now instead of perhaps waiting to make a larger deposit.

A great way to utilize a 5-year CD is to include it in a CD ladder. A 5-year, five-CD ladder is a standard and easy-to-track method of saving. You open five CDs, each maturing a year apart. Once a CD matures, you renew it as a new 5-year CD. Eventually, all your CDs will be 5-year accounts, maturing a year apart. You can also choose to withdraw your money whenever an account matures if you need to use those funds. This allows you to take advantage of the longer terms’ higher rates and bigger savings.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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The Best 3-Year CD Rates in April 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Three-year CDs are a great choice for your mid-term savings goals. They offer higher APYs than 1-year certificates, while avoiding the time commitment of a longer 5-year CD term. To make sure you give your account the best chance to grow your money, you’ll want to find the best CD rates available.

MagnifyMoney can help you find the right 3-year CD for your savings. Using data from DepositAccounts.com, similar to Magnify Money, a LendingTree-owned site, we’ve found the highest 3-year CD rates available nationwide. We also looked at each account minimum deposit and each bank’s relative health to ensure top picks.

The 10 best 3-year CD rates in April 2019

InstitutionAPYMinimum deposit amount

WebBank

3.00%$2,500

CD Bank

3.07%$10,000

Veridian Credit Union

3.05%$1,000

North American Savings Bank

3.05%$5,000

Citizens Access

2.90%$5,000

BankDirect

3.05%$10,000

M.Y. Safra Bank

3.01%$1,000

Main Street Bank

3.00%$500

Sun East FCU

3.00%$500

USALLIANCE Financial

3.00%$500

WebBank — 3.00% APY, $2,500 minimum deposit

WebBank offers five Time Deposits, or CDs. Its 3-Year Time Deposit offers a competitive rate on balances of $2,500 and over. WebBank compounds interest daily, which can grow your savings a little faster. An early withdrawal from a 3-Year Time Deposit will trigger a penalty equal to nine months’ simple interest.

WebBank, founded in 1997, is headquartered in Salt Lake City. It holds an industrial bank charter and maintains Strategic Partnerships in order to provide its customers with a variety of financial products beyond its savings and CD accounts.

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on WebBank’s secure website

Member FDIC

CD Bank — 3.07% APY, $10,000 minimum deposit

Maybe it’s no surprise that CD Bank offers competitive CD rates, including on its 36-month account. The CDs require a pretty high deposit of $10,000 to open and start earning interest, which is credited semi-annually. Making a withdrawal from the 36-month CD before maturity will result in a heavy penalty equal to 24 months worth of interest.

As its name might suggest, CD Bank offers only CD accounts for now. CD Bank is an online division of TBK Bank, which is itself a subsidiary of Triumph Bancorp, Inc.

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on CD Bank’s secure website

Member FDIC

Veridian Credit Union —3.05%APY, $1,000 minimum deposit

If you’re okay with waiting an extra five months for your CD to mature, Veridian Credit Union offers a 41-Month Bump-Up Certificate. It starts off with a competitively high rate and gives you the chance to bump it up once during the term if rates go even higher — plus, you need only $1,000 to open up this account. Unlike most banks/credit unions, Veridian assesses early withdrawal penalties depending on how much you want to withdraw, and how long the CD has until its maturity date.

Veridian Credit Union was first founded as John Deere Employees Credit Union by John Deere employees in Waterloo, Iowa, in 1934; it changed its name to Veridian Credit Union in 2006. You can become a Veridian Credit Union member in a few different ways, including through your place of residence, your employer and family membership. You must open a Member Equity Savings account with at least $5 to join.

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on Veridian Credit Union’s secure website

NCUA Insured

North American Savings Bank — 3.05% APY, $5,000 minimum deposit

While you need only $1,000 to open a 36-Month CD from NASB, you’ll need a balance between $5,000 and $1 million to earn at its more competitive rate — balances outside of that bracket earn at a pretty paltry interest rate for CDs. Its penalty for early withdrawals equals 6 months’ worth of interest on the amount withdrawn.

North American Savings Bank was founded in 1927 and has a handful of branches in the Kansas City, Mo. area.

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on North American Savings Bank’s secure website

Member FDIC

Citizens Access — 2.90% APY, $5,000 minimum deposit

With competitive rates across the board, Citizens Access 3-year CD offers a high rate for those who can deposit at least $5,000 at opening. Early withdrawals from a 3-year CD will trigger a penalty of 180 days’ of interest.

Citizens Access is the online division of Citizens Bank, which traces its roots back to 1828 and is now headquartered in Providence, R.I.

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on Citizens Access’s secure website

Member FDIC

BankDirect — 3.05% APY, $10,000 minimum deposit

If you have an extra $10,000 to save away for a few years, consider BankDirect’s 36-month CD. It offers a high interest rate and compounds interest daily. If you make a withdrawal from the account before maturity, you’ll face a penalty of 180 days’ worth of interest.

BankDirect, which operates without branches, first went live on the internet in 1999. It is a division of Texas Capital Bank, N.A.

learn more Secured

on BankDirect’s secure website

Member FDIC

Main Street Bank — 3.00% APY, $500 minimum deposit

You can save towards a future goal easily with Main Street Bank’s low minimum deposit of $500 and competitive rates, including on its 36-month CD accounts. Early withdrawals from the 36-month CD will trigger a penalty of 180 days’ interest.

Main Street Bank was founded in 2005 and has a few locations just north of Detroit.

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on Main Street Bank (MI)’s secure website

Member FDIC

Sun East FCU — 3.00% APY, $500 minimum deposit

You only need $500 to start saving with a Sun East FCU 36-Month Certificate of Deposit, and your deposits are insured up to $500,000. Making an early withdrawal from the account may result in a penalty of 180 days’ worth of dividends.

Sun East FCU was founded in 1949 by Sun Oil Company employees. Today, it serves members throughout Delaware, Pennsylvania and New Jersey. You can join Sun East’s membership through your place of residence, family members, employer or by way of your community affiliation (e.g. where you might attend church or school, or a location where you might volunteer). You can also choose instead to make a $10 donation to the Sun East Charitable Foundation.

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on Sun East Federal Credit Union’s secure website

NCUA Insured

USALLIANCE Financial — 3.00% APY, $500 minimum deposit

USALLIANCE Financial offers a high-yield, fixed-rate 36-month CD with a minimum deposit of only $500. USALLIANCE compounds interest daily and credits it monthly. Early withdrawals from the account may trigger a penalty equal to 360 days of interest.

USALLIANCE Financial was founded by IBM employees in 1966. Today, you can join USALLIANCE Financial through your place of residence, employer, place of worship, school or organization.

learn more Secured

on USALLIANCE Financial’s secure website

NCUA Insured

Georgia Banking Company — 3.00% APY, $500 minimum deposit

Georgia Banking Company earns at a high interest rate on its 3-year certificate with an opening deposit of just $500. The bank will assess a penalty equal to six months’ interest on early withdrawals from this account.

Georgia Banking Company started in 1998 and now serves the Atlanta area with two physical locations, as well as its nationwide customers online, on mobile and over the phone.

learn more Secured

on Georgia Banking Company’s secure website

Member FDIC

Inflation impact on 3-year CD rates

Inflation reduces the value of any savings or investment balance, including CDs. Your earnings have to exceed the inflation rate for there to be a real return on your money. While mid- and long-term CDs can lock in a high rate today, there’s still potential for inflation to lower your earnings.

For a more inflation-proof savings strategy, consider stock- and bond-based investment products. They can come in handy for long-term savings since their earnings have a better chance of exceeding the inflation rate.

Should I pay early withdrawal penalties if 3-year CD rates rise?

In today’s current rate climate, the zero odds of a Fed rate hike in 2019 don’t point to an increase in 3-year CD rates any time soon. That said, an early withdrawal can sometimes be worth paying the penalties, although you’ll want to do the math and check whether the gains are greater than the costs. Calculate the penalty you would end up paying and ensure it’s lower than the returns on the new CD. This early withdrawal penalty calculator from DepositAccounts.com can run the numbers for you and tell you outright whether breaking your CD is worth it or not.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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