Updated October 22, 2018
If you are looking for a better yield on your savings, a high rate CD (certificate of deposit) offered by an online bank could be a good option. Internet-only banks offer much better interest rates than traditional banks. For example, a 12-month CD at Bank of America would require a $10,000 minimum deposit and would pay only 0.07%. At an online bank, you could earn 2.55% with no minimum deposit. (If you would rather get a savings account or money market with no time restriction, look at the best savings accounts or best money market accounts).
The Best CD Rates in October 2018
This list is updated monthly, and competition continues to intensify. Here are the accounts with some of the best CD rates:
Term | Institution | APY | Minimum Deposit Amount | |
|---|---|---|---|---|
1 year | Barclays | 2.55% | $0 | |
2 years | CD Bank | 3.00% | $10,000 | |
3 years | KS StateBank | 3.22% | $500 | |
5 years | KS StateBank | 3.49% | $500 |
See a full list of the best CD rates below.
- 1 year – 5 years: Barclays Bank – 2.55% – 3.10% APY, no minimum deposit
Barclays is one of the oldest banks in the world. Although they’re based in London, they do have a U.S. presence and offer competitive rates on their CDs and savings account. Currently, they’re offering some of the highest CD rates in the market, and they have an edge over the rest of the institutions on this list: they don’t require a minimum balance to earn the APY or open an account. Deposit as little or as much as you’d like into a term of your choice and you can start earning interest as long as the account is funded within 14 days of opening the CD. Additionally, your funds are insured through the FDIC.
- 1-year: 2.55% APY
- 2-year: 2.60% APY
- 3-year: 2.65% APY
- 4-year: 2.75% APY
- 5-year: 3.10% APY
- 6 months – 6 years: Goldman Sachs Bank USA – 0.60% APY – 3.15% APY; $500 minimum deposit
- 6-month: 0.60% APY
- 9-month: 0.70% APY
- 12-month: 2.55% APY
- 18-month: 2.55% APY
- 2-year: 2.60% APY
- 3-year: 2.65% APY
- 5-year: 3.10% APY
- 6-year: 3.15% APY
- 3 months – 5 years: Synchrony Bank – 0.75% APY – 3.10% APY; $2,000 minimum deposit
- 3-months: 0.75% APY
- 6-months: 1.00% APY
- 9-months: 1.25% APY
- 12-months: 2.50% APY
- 15-months: 2.75% APY
- 18-months: 2.75% APY
- 24-months: 2.75% APY
- 36-months: 2.85% APY
- 48-months: 2.95% APY
- 60-months: 3.10% APY
- 6 months – 5 years: Capital One – 0.60% APY – 3.00% APY; no minimum deposit
Capital One is famous for its credit card business. However, it has recently started getting aggressive with its CD rates. There is no minimum deposit for their 360 CDs, which make them comparable to Barclays’ CDs. Capital One CDs are FDIC insured, up to the federal maximum. And you get the comfort of depositing your money with a well-known bank.
- 6-months: 0.60% APY
- 9-months: 0.75% APY
- 12-months: 2.50% APY
- 18-months: 2.50% APY
- 24-months: 2.60% APY
- 30-months: 2.60% APY
- 36-months: 2.70% APY
- 48-months: 2.75% APY
- 60-months: 3.00% APY
Member FDIC
- 3 months – 5 years: Ally Bank – 0.75% APY – 3.00% APY; $0 minimum deposit (higher APY with higher deposit)
- 3-months: 0.75% APY (less than $5k); 0.75% APY ($5k minimum deposit) and 0.75% APY ($25k minimum deposit)
- 6-months: 1.00% APY (less than $5k); 1.00% APY ($5k minimum deposit) and 1.00% APY ($25k minimum deposit)
- 9-months: 1.25% APY (less than $5k); 1.25% APY ($5k minimum deposit) and 1.25% APY ($25k minimum deposit)
- 12-months: 2.50% APY (less than $5k); 2.50% APY ($5k minimum deposit) and 2.50% APY ($25k minimum deposit)
- 18-months: 2.35% APY (less than $5k); 2.45% APY ($5k minimum deposit) and 2.55% APY ($25k minimum deposit)
- 3-year: 2.50% APY (less than $5k); 2.55% APY ($5k minimum deposit) and 2.60% APY ($25k minimum deposit)
- 5-year: 3.00% APY (less than $5k); 3.00% APY ($5k minimum deposit) and 3.00% APY ($25k minimum deposit)
- 12-Month CD: Vio Bank – 2.65% APY, $1,000 minimum deposit
Vio Bank is a bank subsidiary of MidFirst Bank. While Vio Bank is practically brand new, it’s backed by a financial institution that’s been around since 1911 and has acquired over $15 billion in assets. Vio Bank is currently offering one of the highest CD rates available. With a $500 minimum deposit amount, you can earn a 2.65% APY on a 12-month CD.
- 1-Year CD from a Credit Union: PenFed Credit Union – 2.60% APY, $1,000 minimum deposit
PenFed is a credit union that offers very competitive interest rates. You need to join the credit union in order to benefit from their products. If you have a military or government affiliation, it is free to join. Otherwise, you would need to join an organization like Voices for America’s Troops, which costs $17.00. Once you are a member, you can open PenFed products (including this certificate) online. Your deposit would be insured by the NCUA, which is the National Credit Union Administration. There is a $1,000 minimum deposit for the one-year certificate.
- 2-Year CD: CD Bank – 3.00% APY, $10,000 minimum deposit
CD Bank is the online division of TBK Bank, which is located in Dallas, Texas. With the help of TBK Bank’s backing, the two institutions have over $3 billion in assets. Currently, CD Bank is offering a 24-month CD with a 3.00% APY. There is a steep minimum deposit amount of $10,000, but your deposit is FDIC-insured.
- 2-Year CD from a Credit Union: Communitywide Federal Credit Union – 2.90% APY, $2,000 minimum deposit
CommunityWide Federal Credit Union was established in 1967 to provide quality financial services to those residing on the west side of South Bend, IN. Today, the credit union operates similarly even though they’ve expanded their footprint in Michigan. Thanks to their online services, however, their able to service customers nationwide. Anyone can become a member of this credit union if they are a donor member of one of their partner organizations, such as the Y.M.C.A. Once you become a member, you can apply for their 24 month CD. You’ll need to deposit $2,000 in order to earn their outstanding 2.90% APY. This account can be managed online or through their mobile app. Deposits made to Communitywide Federal Credit Union are insured by the NCUA.
- 3-Year CD: KS StateBank – 3.22% APY, $500 minimum deposit
KS StateBank is mainly a brick-and-mortar institution located in Kansas and Phoenix, Arizona. However, they also offer online services to reach those not in their area. Sometimes, they even offer special rates to their online customers. While this 3-year CD is not an online special, it is a term that can be opened online rather than at a branch. With a minimum deposit amount of $500, you can begin earning an APY of 3.22%. KS StateBank not only offers online banking, they also have a mobile banking app. Deposits made to this bank are FDIC-insured.
- 3-Year CD from a Credit Union: Greenwood Credit Union, 3.25% APY, $1,000 minimum deposit
- 5-Year CD: KS StateBank – 3.49% APY, $500 minimum deposit
Once again KS StateBank lands a top spot on our list. Its 5-year CD has an APY of 3.49%, which is one of the highest currently available. You’ll only need $500 to deposit to open the account.
- 5-Year CD from a Credit Union: United States Senate Federal Credit Union – 3.51% APY, $1,000 minimum deposit
Despite what the name may suggest, you do not have to be a Senate employee to join the United States Senate Federal Credit Union. If you don’t meet the work or family qualifications, you can easily become a member by joining the American Consumer Council, Virginia Chapter (VACC) or by joining the U.S. Capitol Historical Society (USCHS). This credit union was established by nine employees of the United States Senate during the Great Depression. Since then, the credit union has grown to have over $717 million in assets.
Currently, the United States Senate Federal Credit Union is offering amazing rates on its 5-year CD. With a minimum deposit of $1,000, you can earn an APY of 3.51%. If you deposit more, the APY increases. The other tiers are as follows:
- $20,000-$59,999.99: 3.57% APY
- $60,000-$99,999.99: 3.63% APY
3 Questions To Ask Before You Open A CD
1. Should I just open an online savings account instead?
With a CD, the saver and the bank make stronger commitments. The saver promises to keep the funds in the account for a specified period of time. In exchange, the bank guarantees the interest rate during the term of the CD. The longer the term, the higher the interest rate – and the higher the penalty for closing the CD early. With a savings account, there are few promises. You can empty the account without paying a penalty and the bank can change the interest rate at any time.
If you have a high level of confidence that you do not need to touch the money for a specified period of time, a CD is a much better deal. However, if you think you might need to use the money in the next couple of months, a savings account is a much better idea.
You can earn a lot more interest with a CD. Imagine you have $10,000 and know that you do not need to touch the money for two years. In a high-yield savings account earning 1.60%, you would earn $322.56 over two years. If you put that money into a 2.50% CD, you would earn $508.30. Given the ease of switching to an online CD, the extra interest income is easy money.
2. What term should I select?
The early withdrawal penalties on CDs can be significant. On a 1-year CD, 90 days is a typical penalty. And on 2 and 3 year CDs, a 6-month penalty is common. The impact of the penalty on your return can be significant. If you opened a one-year CD with a 2.20% APY and closed it after six months, you would forfeit half of the interest and earned only 1.11%. You would have been better off with a savings account paying 1.95%.
The worst case scenario is with the longest CDs. 5-year CDs usually have a one-year penalty for taking out funds early. If you open a 5-year CD and close it quickly, you could actually end up losing money.
Given the early penalties, you need complete confidence that you will not need to withdrawal the money early. Ask yourself this question: “do I have 90% confidence that I will not need access to the cash during the CD term?” If you don’t have confidence, go for a shorter term or a savings account.
3. Should I consider my local bank or credit union?
The interest rates shown in this article are all from online banks that offer products nationally. Our product database includes traditional banks, community banks and credit unions. If traditional banks offered better rates, they would have been featured in this article. The internet-only banks have dramatically better interest rates. That should not be surprising. Because internet-only banks do not have branches, they are able to pass along their cost savings to you in the form of higher interest rates.
However, you can always visit your local bank or credit union and ask them to beat the rates listed in this article. The chance of getting a better deal is extremely low (remember that Bank of America is only paying 0.07%), but you can try.
How To Find The Best Account
If you don’t find an account that meets your needs in this article, you can use the MagnifyMoney CD tool to find the best rate for your individual needs. Input your zip code, deposit amount and term. The tool will then provide you with CD options, from the highest APY to the lowest.
You can learn more about us and how we make money here.
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Our sponsored advertiser, American Express National Bank, offers a Personal Savings account, which earns a 1.90% variable APY. The account charges no monthly fees and requires no minimum deposit, making it an affordable account to open. You must fund your account within 60 days of applying for the account, and the FDIC insures your deposits up to $250,000. Overall, the account is a great option for anyone who wants the flexibility of earning a high interest rate on a sum of money you’ve stashed away, minus the withdrawal restrictions of a certificate deposit.
HSBC Direct is the online division of financial giant, HSBC Bank. Based on the amount of assets HSBC Bank has acquired to date, it is the 14th largest bank in the U.S. While HSBC Direct may sound like a new player to the online banking game, this division was actually around prior to the 2008 financial crisis and offered extremely competitive rates. After the financial crisis, the bank renamed the online division to HSBC Advance and slowly started to decrease its online savings account rates, much like other online banks were doing around that time.
CIT is a very large bank that you probably never heard of. It has more than $50 billion of assets and makes loans (and leases) to middle market companies and small businesses. To fund those loans, CIT operates an internet-only bank that pays some of the highest interest rates in the country. They’re currently offering a very healthy APY of 2.15% on their Savings Builder account. You only need $100 to open the account, but you’ll need to meet one of two requirements to earn the high rate. We really like the options that CIT Bank has put in place to earn this high APY. The two ways to continue earning this high rate are:
EBSB Direct is the online division of East Boston Savings Bank, which has been around since 1848 according to its website. To date, East Boston Savings Bank has acquired over $5 billion in assets.
PurePoint Financial is a division of the MUFG Union Bank, N.A., otherwise known as Union Bank. Together, PurePoint Financial and Union Bank have over $120 billion dollars in assets and are powered by one of the largest financial groups in the world, Mitsubishi UFJ Financial Group (MUFG). PurePoint Financial’s online savings account currently has an APY of 2.15% with an opening deposit amount of $10,000. You’ll also have to maintain that balance to earn the APY. If the balance falls below $10,000, the APY will drop to 0.25%. The only fee associated with this account is as a result of making more than six transactions per month. If this happens, a $10 Excess Activity Fee will be applied to your account. PurePoint Financial allows you to safely manage your account online via your computer or mobile phone, but they don’t have a mobile app just yet.
Digital Federal Credit Union (DCU) currently offers a nice account for people who are just starting to save. You can earn an APY of 5.12% with their Primary Savings Account. You will only earn that rate on deposits up to $1,000. Once you have more than $1k, you should consider other accounts on this list. It is a credit union – and your deposits are insured by the NCUA up to the legal limit. Anyone can join the credit union by donating to one of their participating organizations such as Reach Out for Schools, which has a membership fee of $10. You’ll be able to join one their participating organizations when you go to open your account with DCU. DCU is also part of a nationwide CO-OP network that allows their members to have access to shared branches and surcharge-free ATMs throughout the U.S.
Virtual Bank, a division of IBERIABANK, is currently offering an introductory rate on their money market account that is the highest available. This rate is guaranteed for 12 months and will adjust to the standard rate that is in effect at the time. New customers can earn the 2.01% APY by depositing a minimum of $100. While there isn’t a minimum balance requirement to earn the APY, there is a balance requirement to avoid incurring the $5 monthly service fee. All you’ll have to do is maintain a daily minimum balance of $100 and they’ll waive the monthly fee. While this account doesn’t have any check writing capabilities, you can easily move money in and out of the account via ACH. Virtual Bank has a mobile app, that has the mobile check deposit feature, in addition to their online banking platform.
If you have student loan debt, you probably are not very excited to see Sallie Mae at the top of this list. However, many people are unaware that Sallie Mae also operates an internet-only FDIC-insured bank with some of the best interest rates in the country. You can earn 2.12% APY, compounded daily and paid monthly. There is no minimum balance and no monthly maintenance fees. You will have check-writing capabilities (although the standard money market limit of six per month applies to this account). The easiest (and best) way to fund and access your funds is via electronic transfer from your existing checking account. If you want a simple account with no fees and check access – this is a good bet. Sallie Mae has just recently increased the APY, making this one the best rates in the country.
ableBanking is a division of Northeast Bancorp, a community bank headquartered in Maine since 1872. The bank has over $1 billion in assets, and your deposit would be FDIC insured up to the legal limit. At 1.85% APY, this is the highest money market rate that we have been able to find (from a bank) in the country. There is a minimum deposit of $250, no monthly fee and you do not need to be a resident of Maine (any US resident can open an account). Unfortunately, the account does not come with check-writing privileges and there is no ATM access. You can deposit and access your funds via ACH (electronic transfer), which can take a couple of days. Just remember: there is a limit of 6 withdrawals per calendar month. When we called to ask questions about the account, we could reach a customer service representative very quickly. This is a good option from a small bank with a great high rate.
TIAA Direct and EverBank recently merged to create TIAA Bank. Currently, the bank is offering a 1st year intro rate on its Yield Pledge Money Market account. If you have $5,000 to open the account, you’ll receive a 1.80% APY. After the first year, the APY drops depending on your account balance. Fortunately, the APY won’t fall below 1% even if you have a really low balance and TIAA Bank promises to always have yields within the top 5% of its competition. Some other perks of this account are that it doesn’t have a monthly account fee and allows you to have access to ATMs via a Visa debit card. In addition to doing all of your banking online, you’ll be able to manage your account on TIAA Bank’s mobile app.
Self-Help is a credit union that anyone can join. If you don’t live, work or worship in one of their eligible counties, you can join by donating $5 to the Center for Community Self-Help. The contribution is tax deductible and will make you eligible for credit union membership. (You can learn more about how to join the credit union here.) At a credit union, your funds are insured up to $250,000 – but it is by the NCUA instead of the FDIC. The money market offers an APY of 1.71% on balances from that are at least $500. You also need to maintain the balance during the month – otherwise you will be charged a monthly maintenance fee. You are allowed 6 free withdrawals or transfers from the account each month (including checks).
With a $5 donation to the Connexus Association, anyone can join Connexus Credit Union. The Connexus Association assists educational institutions by providing scholarships and financial information. Once you become a member of the credit union, you’ll be able to open their 12 month CD with a $5,000 deposit.
