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The Best CD Rates – February 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.

The Best CD Rates
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Updated February 5, 2019

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 2.75% 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 February 2019

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

Synchrony Bank

2.80%

$2,000

LEARN MORE Secured

on Synchrony Bank’s secure website

Member FDIC

2 years

NASA Federal Credit Union

3.25%

$10,000

LEARN MORE Secured

on NASA Federal Credit Union’s secure website

NCUA Insured

3 years

Mountain America Credit Union

3.35%

$500

LEARN MORE Secured

on Mountain America Credit Union’s secure website

NCUA Insured

5 years

Mountain America Credit Union

3.51%

$500

LEARN MORE Secured

on Mountain America Credit Union’s secure website

NCUA Insured

See a full list of the best CD rates below.

  • 3 months – 5 years: Synchrony Bank – 0.75% APY – 3.10% APY; $2,000 minimum deposit

Synchrony Bank
Synchrony used to be a part of GE, and now has an online bank that pays competitive rates. The online deposits are used to fund their store credit card portfolio – and the company is publicly traded. Your deposit will be insured up to the FDIC limit. In a rising rate environment, this is a great way to get a high interest rate without locking yourself into a long term.

  • 3-months: 0.75% APY
  • 6-months: 1.00% APY
  • 9-months: 1.25% APY
  • 12-months: 2.80% APY
  • 18-months: 2.75% APY
  • 24-months: 2.90% APY
  • 36-months: 2.90% APY
  • 48-months: 3.00% APY
  • 60-months: 3.10% APY

LEARN MORE Secured

on Synchrony Bank’s secure website

Member FDIC

  • 6 months – 6 years: Goldman Sachs Bank USA – 0.60% APY – 3.15% APY; $500 minimum deposit

Goldman Sachs Bank USA
Our advertiser Marcus by Goldman Sachs is the online consumer bank of Goldman Sachs Bank USA (the large investment bank). Your funds are FDIC insured, and Goldman offers very competitive rates. Even better: there is only a $500 minimum deposit. So, if you don’t have enough money to meet the minimum deposit of the other banks on this list, or you are looking for another bank for your savings, GS is a good option. It also doesn’t hurt that they also offer some of the best CD rates in the market today. Here are their rates:

  • 6-month: 0.60% APY
  • 9-month: 0.70% APY
  • 12-month: 2.75% APY
  • 18-month: 2.65% APY
  • 2-year: 2.70% APY
  • 3-year: 2.75% APY
  • 5-year: 3.10% APY
  • 6-year: 3.15% APY

LEARN MORE Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

  • 3 months – 5 years: Ally Bank – 0.75% APY – 3.10% APY; $0 minimum deposit (higher APY with higher deposit)

Ally Bank
Ally is one of the largest internet-only banks in the country. Ally’s former advertising campaign made it very clear: no branches = higher rates. And Ally has consistently paid some of the highest rates in the country across savings accounts, money market accounts and CDs. For savers with fewer funds, Ally is unique. There is no minimum deposit to open a CD. However, if you have more money, you can earn a higher APY. If you have more than $25,000 to deposit, you can earn between 0.75% APY and 3.10% APY. And one of our favorite features of Ally: they often (although not always) offer preferential rates on renewal. Far too often banks give the biggest bonuses to new customers, but Ally has done a good job of rewarding its existing customers. A good example of this is a 1% cash back promotion Ally is currently offering to new and existing customers. All deposits at Ally are FDIC insured up to the legal limit.

  • 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: 2.75% APY (less than $5k); 2.75% APY ($5k minimum deposit) and 2.75% APY ($25k minimum deposit)
  • 18-months: 2.50% APY (less than $5k); 2.65% APY ($5k minimum deposit) and 2.70% APY ($25k minimum deposit)
  • 3-year: 2.60% APY (less than $5k); 2.70% APY ($5k minimum deposit) and 2.75% APY ($25k minimum deposit)
  • 5-year: 3.10% APY (less than $5k); 3.10% APY ($5k minimum deposit) and 3.10% APY ($25k minimum deposit)

LEARN MORE Secured

on Ally Bank’s secure website

Member FDIC

  • 1 year – 5 years: Barclays Bank – 2.75% – 3.10% APY, no minimum deposit

12 Month Online CD from Barclays 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: 2.75% APY
  • 2-year: 2.80% APY
  • 3-year: 2.85% APY
  • 4-year: 2.90% APY
  • 5-year: 3.10% APY

LEARN MORE Secured

on Barclays’s secure website

Member FDIC

  • 6 months – 5 years: Capital One – 0.60% APY – 3.10% APY; no minimum deposit

12 Month 360 CD from Capital OneCapital 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: 2.70% APY
  • 18-months: 2.70% APY
  • 24-months: 2.80% APY
  • 30-months: 2.80% APY
  • 36-months: 2.85% APY
  • 48-months: 2.90% APY
  • 60-months: 3.10% APY

LEARN MORE Secured

on Capital One’s secure website

Member FDIC

  • 6 months – 120 months: Vio Bank – 2.00% APY – 3.15% APY; $500 minimum deposit

12 Month High Yield Online CD from Vio BankVio Bank, a division of MidFirst Bank, is an online bank you don’t want to ignore. It launched in August 2018 with highly competitive offerings and it has continued to offer top rates on both its CDs and online savings account. While Vio Bank hasn’t been around very long, they are supported by a financial institution that is established with over $16 billion in assets. We’re extremely impressed with its early start. Here’s a full list its current CD rates:

  • 6-months: 2.00%
  • 9-months: 2.50%
  • 12-months: 2.65%
  • 15-months: 2.65%
  • 18-months: 2.65%
  • 24-months: 2.65%
  • 36-months: 2.80%
  • 48-months: 3.00%
  • 60-months: 3.10%
  • 84-months: 3.15%
  • 120-months: 3.15%

LEARN MORE Secured

on Vio Bank’s secure website

Member FDIC

  • 6 months – 7 years: PenFed Credit Union – 2.40% APY – 3.15% APY, $1,000 minimum deposit

12 Month Money Market Certificate from PenFed Credit UnionPenFed 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.

  • 6-months: 2.40%
  • 12-months: 2.60%
  • 15-months: 2.70%
  • 18-months: 2.75%
  • 2-years: 2.80%
  • 3-years: 2.90%
  • 4-years: 2.95%
  • 5-years: 3.15%
  • 7-years: 3.15%

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

  • 1-Year CD: Advancial – 2.85%APY, $25,000 minimum deposit

1 Year Junior Jumbo Certificate from AdvancialIf you’re able to deposit $25,000 into a CD, you’ll want to consider this 1-year CD with an outstanding 2.85% APY. This credit union is only available to those who are employed or are a member of the credit union’s Select Employer Groups or Associations, immediate family members or household members of existing members of Advancial, or those who live, work, worship, or attend school in one of the eligible Louisiana parishes. In order to find out what the Select Employer Groups or Associations are, you’ll need to call the credit union’s Member Service Center.

LEARN MORE Secured

on Advancial’s secure website

NCUA Insured

  • 1-Year CD: Ally Bank – 2.85% APY, $0 minimum deposit

High Yield 12-Month CD from Ally BankAlly Bank is currently offering a 14-Month Select CD with a 2.85% APY. This is a promotional term and will only be available through 2/28/2019. Although this term is two months longer than a full year, the rate is currently one of the best. This promotional CD is 0.10% (or 10bps) above Ally’s 12-month CD. As with all of Ally’s CDs, if you fund this CD within 10 days of applying for the account, the bank will apply its Ten Day Best Rate Guarantee. This means that if you open the CD today and fund the CD five days later, Ally will honor the rate of the day you fund the account if the rate has increased since you opened the CD. There isn’t a minimum deposit amount required to open the CD and interest is compounded daily. Ally’s early withdrawal penalty for this CD is 60 days’ worth of interest.

LEARN MORE Secured

on Ally Bank’s secure website

Member FDIC

  • 2-Year CD from a Credit Union: NASA Federal Credit Union – 3.25% APY, $10,000 minimum deposit

24 Month Bump Rate Share Certificate from NASA Federal Credit UnionIn 1949, employees of NASA came together to charter a credit union. At the time, membership was only available to NASA employees. Today, its field of membership is open to anyone through a complimentary membership to the National Space Society. Once you become a member, you can open the credit union’s 25-month CD special, which currently has an APY of 3.25%. You will need to deposit at minimum of $10,000 to earn the APY, but deposits made to this credit union NCUA insured. The early withdrawal penalty for this CD is 365 days’ worth of interest.

LEARN MORE Secured

on NASA Federal Credit Union’s secure website

NCUA Insured

  • 2-Year CD: CD Bank – 3.07% APY, $10,000 minimum deposit

24 Month CD from CD BankCD Bank is the online division of TBK Bank, which was established in 1981 and has acquired over $4 billion in assets. This online division has only been around since 2017, but it launched with competitive rates at the time and has continued to offer competitive rates on its shorter-term CDs as the CD market has risen. At this moment, CD Bank is offering a 2-year CD with an APY of 3.07%. You will need to deposit a minimum of $10,000 in order to earn this APY. The early withdrawal penalty for this CD is equal to 18 months interest on the withdrawn amount. Be aware that once this CD matures, the only two ways you can receive the fully matured funds is via a cashier’s check or outgoing wire transfer. If you choose to use an outgoing wire transfer, the bank may charge you a $15 fee.

LEARN MORE Secured

on CD Bank’s secure website

Member FDIC

  • 3-Year CD from a Credit Union: Mountain America Credit Union, 3.35% APY, $500 minimum deposit

3 Year Term Deposit from Mountain America Credit UnionMountain America Credit Union was established in the 1930s to help its members achieve their financial goals. Today, they have grown to serve hundreds of thousands of members and have acquired over $7 billion in assets. This credit union is open to Utah residents in certain areas, family members of existing members of the credit union, and employees and volunteers of a Select Employer Group. If you are a member or become a member of the American Consumer Council, you’ll qualify for membership at Mountain America Credit Union. Once you become a member, you’ll be able to open a CD. You’ll need to deposit a minimum of $500 in order to earn their outstanding 3.35% APY. Accounts can be managed online or through their mobile app. Deposits made to Mountain America Credit Union are insured by the NCUA.

LEARN MORE Secured

on Mountain America Credit Union’s secure website

NCUA Insured

  • 3-Year CD: M.Y. Safra Bank – 3.10% APY, $1,000 minimum deposit

36 Month Classic CD from M.Y. Safra BankM.Y. Safra Bank, located in New York, NY, was established in 2000. They currently have over $363 million in assets. Their 36 Month Online Promo CD has an APY of 3.10%, which is one of the highest currently available from a bank. You’ll need $1,000 to deposit to open the account and a little patience navigating their website. The early withdrawal penalty for this CD will depend on whether the credited amount of interest or 90 days’ worth of interest is higher. The bank will take whichever amount is higher at the time of your early withdrawal. While they do have a mobile app, you’ll have to first apply for an account online.

LEARN MORE Secured

on M.Y. Safra Bank’s secure website

Member FDIC

  • 5-Year CD from a Credit Union: Mountain America Credit Union – 3.51% APY, $500 minimum deposit

60 Month Youth Term Deposit from Mountain America Credit UnionMountain America Credit Union also makes the list for the best 5-year CD rate from a credit union. It actually beats out Georgia Banking Company by 0.01% (or 1 bps). With a minimum deposit of $500, you can earn an APY of 3.51%. Keep in mind, however, that if you withdraw money from this CD prior to its maturity date, you’ll face a penalty of 365 days worth of interest.

While they do have membership requirements based on where you live and work, they also open membership to anyone who’s a member of numerous organizations including the American Consumer Council. To become a member of the American Consumer Council, you can either pay their yearly fee of $8 or $15 for their lifetime membership. Mountain America Credit Union has a mobile banking app as well as an online banking platform. You may also want to consider their Term Deposit Plus products as you’ll be able to add money to the CD at any time throughout the term. These CDs have the same rate as their regular CDs, but only require $5 to open and an automated monthly deposit amount of at least $10.

LEARN MORE Secured

on Mountain America Credit Union’s secure website

NCUA Insured

  • 5-Year CD: Georgia Banking Company – 3.20% APY, $500 minimum deposit

5 Year Certificate from Georgia Banking CompanyGeorgia Banking Company is a community bank with over $421 million in assets. While it opened its doors in 2001 to the Atlanta, GA community, it recently started offering its deposit products nationwide. This means that U.S. residents can open Georgia Banking Company’s 5-year CD with a minimum of $500 and start earning an APY of 3.20%. This CD comes with an early withdrawal penalty that is worth six months of interest. The bank has an online banking platform as well as a mobile app. All deposits made to this bank are FDIC-insured.

LEARN MORE Secured

on Georgia Banking Company’s secure website

Member FDIC

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 2.35%, you would earn $475.52 over two years. If you put that money into a 2.65% CD, you would earn $537.02. 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 2.65% APY and closed it after six months, you would forfeit half of the interest and earned only 1.32%. You would have been better off with a savings account paying 2.25%.

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.

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.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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The Top 6 Month CD Rates for February 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.

The top 6 month CD rates
Source: iStock

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, another LendingTree company and 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. We pulled these rates on February 11, 2019, and we excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.84%, 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

Virtual Bank

VirtualBank

6 month CD APY: 2.50%
Bank information: VirtualBank is a subsidiary of Louisiana-based IBERIABANK Corp., offering 24/7 digital or telephone access on eCDs, open to applicants anywhere in the U.S.
Where to open CD account: Online (paperless account options)
Minimum balance to open: $10,000
Maintenance fees: $0
Early withdrawal penalties: 30 days’ interest

LEARN MORE Secured

on Virtual Bank’s secure website

Member FDIC

6 Month Popular Direct CD from Popular Direct

Popular Direct

6 month CD APY: 2.49%
Bank information: Popular Direct is an online bank that services customers in the U.S., Puerto Rico, and throughout the Caribbean. They currently have some of the most competitive rates in the market – not only in their CD products, but with their savings account as well.
Where to open CD account: Online
Minimum balance to open: $10,000
Maintenance fees: $0
Early withdrawal penalties: 120 days of simple interest

LEARN MORE Secured

on Popular Direct’s secure website

Member FDIC

First Internet Bank

First Internet Bank

6 month CD APY: 2.45%
Bank information: A subsidiary of First Internet Bancorp, this online bank founded in 1999 has no branch locations, but offers service online in all 50 states.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE Secured

on First Internet Bank’s secure website

Member FDIC

6 Month CD from Live Oak Bank

Live Oak Bank

6-month CD APY: 2.45%
Bank information: Live Oak Bank is located in Wilmington, NC, but serves customers nationwide through online banking. While their initial focus was to help small businesses acquire funding, they now help all individuals through personal banking.
Where to open CD account: Online
Minimum balance to open: $2,500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE Secured

on Live Oak Bank’s secure website

Member FDIC

6 Month Online Time Deposit from My eBanc

My eBanc

6 month CD APY: 2.45%
Bank information: BAC Florida Bank of Coral Gables, Fla., is part of The Pellas Group. The CD program, open to all foreign and domestic customers, is designated as a “BAC Internet Time Deposit.” Overseas CDs based on the euro are not insured by the FDIC.
Where to open CD account: Online
Minimum balance to open: $5,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE 

Member FDIC

Credit unions with the best 6 month CD rates

18 Month IRA Certificate Special - New Money from Interior Federal Credit Union

Interior Federal Credit Union

6 month CD APY: 2.78%
Credit union information: Interior Federal Credit Union was established in 1935 with the intention to promote financial wellness. During the Great Depression, employees of the Department of the Interior (the federal department that is responsible for the conservation of federal lands and natural resources) couldn’t get credit at their local banks, so they formed this credit union. Today, the credit union serves U.S. residents nationwide.
Membership details: Anyone can join by the credit union by joining the New Mexico Wildlife Federation, which you can do when you’re filling out your application. Check to see, however, if you’re able to join through employment, organization affiliation, or through an immediate family member.
Where to open CD account: You can open an account online or at one of their branches.
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 30 days’ worth of interest.

on Interior Federal Credit Union’s secure website
1 Year Junior Jumbo Certificate from Advancial

Advancial

6 month CD APY: 2.62%
Credit union information: Advancial was established in 1937. Since then, they’ve been providing creative ways to serve their members.
Membership details: Anyone can join this credit union if they join Connex, which has a $5 membership fee. However, if you choose to join the way, you’ll have to join using a paper application. You can just reach out to the credit union to provide you with the paperwork via email. Before you do that, see if you qualify another way.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: Determined by the credit union.

on Advancial’s secure website
PenFed Credit Union

PenFed Credit Union

6 month CD APY: 2.40%
Credit union information: PenFed, established in 1935, today serves more than 1.6 million members at branch locations in all 50 states and select overseas facilities.
Membership details: Open to current or retired members of the U.S. military, federal employees, affinity partners, members of qualifying organizations, or by donating to Voices for America’s Troops or the National Military Family Association.
Where to open CD account: You can open an account online or at one of their branches.
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

36 Month Share Certificate from Communitywide Federal Credit Union

CommunityWide Federal Credit Union

6 month CD APY: 2.30%
Credit union information: Founded as a credit union to provide quality financial services to individuals in South Bend, IN, CommunityWide Federal  Credit Union has grown to offer their services to various communities within Indiana as well as the digital world.
Membership details: Anyone can become a member by donating to a list of organizations including the Y.M.C.A. 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.
Where to open CD account: Online
Minimum balance to open: $2,000
Maintenance fees: $0
Early withdrawal penalties: Equal to the amount withdrawn multiplied by the remaining days left in the term.

LEARN MORE Secured

on Communitywide Federal Credit Union’s secure website

NCUA Insured

6 Month Certificate from State Department Federal Credit Union

State Department Federal Credit Union

6 month CD APY: 2.06%
Credit union information: State Department Federal Credit Union was established in 1935 by eight people employed by the United States Department of State. Since then, they have expanded to serve a multitude of members worldwide.
Membership details: Anyone can join by the credit union by joining the American Consumer Council, which you can do when you’re filling out your application. Check to see, however, if you’re able to join through employment, organization affiliation, or through an immediate family member.
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 30 days of dividends on the withdrawn amount or the amount of dividends you’ve earned since the account opened – the credit union will impose the lesser of the two.

LEARN MORE Secured

on State Department Federal Credit Union’s secure website

NCUA Insured

Pros and cons of using 6 month CDs

Pros:

  • 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.)

Cons:

  • 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.

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.

Gabby Hyman
Gabby Hyman |

Gabby Hyman is a writer at MagnifyMoney. You can email Gabby here

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