The Best CD Rates – April 2020

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Updated April 3, 2020

The best CD rates are offered by online banks and credit unions. As of April 2020, the best CD rates offered by online banks out-yield average CD rates from brick-and-mortar institutions by as much as 0.75%. This can mean the difference of thousands of dollars in interest earnings over several years when comparing current rates.

If you’re looking for the highest yield on your savings and want the added safety of an FDIC-insured product, a high-rate CD from an online bank could be a great option.

Every week, MagnifyMoney’s elite team of financial experts compiles the best CD rates from hundreds of banks and credit unions nationwide. We’ve compared rates across the most popular CD terms – from as short as 3-months to as long as 5-years – as well as no-penalty CDs that offer extra liquidity.

Check out MagnifyMoney’s top picks for the best CD rates below.

MagnifyMoney’s best CD rates for April 2020

To find the best CD rates, we look for the banks that consistently offer competitive CD rates month over month. This list is updated weekly and the rates are organized by 1-year rates from highest to lowest. Here are the accounts from top banks with consistently competitive CD rates:

The Best CD Rates in April 2020 Overall

Bank

1 Year APY

3 Year APY

5 Year APY

Minimum Deposit

Goldman Sachs Bank

1.85%

1.85%

1.90%

$500

Barclays Bank

1.75%

1.70%

1.70%

No minimum deposit

Live Oak Bank

1.90%

1.50%

1.50%

$2,500

Discover Bank

1.75%

1.80%

1.80%

$2,500

Rising Bank

1.55%

1.20%

NA

$1,000

Ally Bank

1.50%

1.55%

1.60%

No minimum deposit

Citizens Access

1.50%

1.55%

1.65%

$5,000

Synchrony Bank

1.50%

1.55%

1.65%

$2,000

BrioDirect

1.25%

1.00%

1.00%

$500

6 months – 6 years: Goldman Sachs Bank USA – 0.60% APY – 1.90% APY; $500 minimum deposit to open

Goldman Sachs Bank USA

SEE DETAILS Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

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:

CD TermAPY
6-months0.60%
9-months0.70%
12-months1.85%
18-months1.85%
2-year1.85%
3-year1.85%
5-year1.90%
6-year1.90%
1 year – 5 years: Barclays Bank – 1.75% – 1.70% APY, no minimum deposit to open

Barclays

SEE DETAILS 

Member FDIC

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.

CD TermAPY
1-year1.75%
2-year1.75%
3-year1.70%
4-year1.70%
5-year1.70%
6 months – 5 years: Live Oak Bank – 1.40% APY – 1.50% APY; $2,500 minimum deposit to open

Live Oak Bank

SEE DETAILS 

Member FDIC

Live Oak Bank offers a variety of financial products including personal deposit accounts, business bank accounts and loans. It was established in 2008 and is headquartered in Wilmington, N.C.

Live Oak Bank offers competitive CD rates across the board, starting with its high-yield 6-month CD. Its 1 Year CD is among the most competitive as well, with its 1.90% APY. Live Oak Bank requires a minimum CD deposit of $2,500. You’ll lost 90 days of simple interest if you make an early withdrawal from a Live Oak CD less than 24 months and 180 days of simple interest on terms longer than that.

CD TermAPY

6-month CD

1.40%

1-year CD

1.90%

18-month CD

1.90%

2-year CD

1.50%

3-year CD

1.50%

4-year CD

1.50%

5-year CD

1.50%

3 months – 10 years: Discover Bank – 0.35% APY – 1.80% APY, $2,500 minimum deposit to open

Discover Bank

SEE DETAILS 

Discover Bank's website is secure

Member FDIC

Discover is best known for cash back credit cards. However, Discover has also quietly built a leading internet bank that offers checking accounts, savings accounts and CDs. Discover has invested in a mobile banking app and strong on-shore customer service.Although Discover does not always have the highest rate, it is very close (within basis points) across all durations. If customer service and digital tools (like apps) are important to you, Discover is an excellent consideration. Note: you can even get a CD rate with a duration as short as 3 months. However, you would be better off opening a high yield savings account if you plan on saving the money for less than a year.

Keep in mind that all CD terms come with an early withdrawal penalty if you choose to withdraw money before your maturity date. If your Discover CD is less than one year, the penalty is worth three months of simple interest. If the term is between one to three years, the penalty is worth six months of simple interest. Four-year CDs have a penalty that is worth nine months of simple interest. Five year CDs have a penalty that is worth 18 months of simple interest and seven to 10-year CDs have a penalty that is worth 24 months of simple interest.

CD TermAPY
3-months0.35%
6-months0.65%
9-months0.70%
12-months1.75%
18-months1.75%
2-year1.75%
30-months1.75%
3-year1.80%
4-year1.80%
5-year1.80%
7-year1.80%
10-year1.80%
1 Year – 3 Years: Rising Bank – 1.55% APY – 1.20% APY; $1,000 minimum deposit to open

Rising Bank

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on Rising Bank’s secure website

Member FDIC

Rising Bank launched in February 2019 as the online division of Midwest BankCentre. Midwest BankCentre has been around since 1906 in Missouri and has acquired over $1 billion in assets. This bank decided to assert itself as a top competitor in the online banking space by offering competitive rates.

While most online banks have pulled back on rate offerings, Rising Bank continues to offer a top 1.55% APY on its 1-year CD. However, unlike some of the top online banks like Ally Bank and Goldman Sachs, Rising Bank requires a minimum deposit of $1,000 and caps balances at $500,000 on its CDs. If you have less than $1,000 to deposit into a CD, you’re better off choosing another online bank. If you have more than $500,000 to deposit into a CD, you may also want to consider another online bank.

Aside from its rates, Rising Bank also distinguishes its CDs with the early withdrawal penalties. If you need to withdraw from the 1-year CD early, you’ll only incur a penalty that is 90 days’ worth of interest. If you need to withdraw early from the 18 to 36-month CDs, the penalty is 180 days’ worth of interest. One thing to be aware of is that Rising Bank compounds interest every three months. Other online banks compound interest monthly, so this is a bit of a downside. Once this CD matures, you can withdraw the full balance to close the account. If you don’t withdraw the full balance ten days after the maturity date, Rising Bank will automatically renew your CD. Rising Bank has a mobile app for your convenience.

CD TermAPY
1-year1.55%
2-year1.20%
3-year1.20%
3 months – 5 years: Ally Bank – 0.50% APY – 1.60% APY; $0 minimum deposit to open (higher APY with higher deposit)

Ally Bank

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on Ally Bank’s secure website

Member FDIC

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’ll earn more in interest and in some case, earn a higher 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. All deposits at Ally are FDIC insured up to the legal limit.

3-months:
  • 0.50% APY (less than $5k)
  • 0.50% APY ($5k minimum deposit)
  • 0.50% APY ($25k minimum deposit)
18-months:
  • 1.75% APY (less than $5k)
  • 1.75% APY ($5k minimum deposit)
  • 1.75% APY ($25k minimum deposit)
6-months:
  • 0.75% APY (less than $5k)
  • 0.75% APY ($5k minimum deposit)
  • 0.75% APY ($25k minimum deposit)
3-year:
  • 1.55% APY (less than $5k)
  • 1.55% APY ($5k minimum deposit)
  • 1.55% APY ($25k minimum deposit)
9-months:
  • 1.00% APY (less than $5k)
  • 1.00% APY ($5k minimum deposit)
  • 1.00% APY ($25k minimum deposit)
5-year:
  • 1.60% APY (less than $5k)
  • 1.60% APY ($5k minimum deposit)
  • 1.60% APY ($25k minimum deposit)
12-months:
  • 1.50% APY (less than $5k)
  • 1.50% APY ($5k minimum deposit)
  • 1.50% APY ($25k minimum deposit)
1 year – 5 years: Citizens Access – 1.50% APY – 1.65% APY; $5000 minimum deposit to open

Citizens Access

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on Citizens Access’s secure website

Member FDIC

Citizens Access is the online division of Citizens Bank, N.A., aimed at providing more convenient access to better banking products. Both divisions are headquartered in Providence, R.I. Citizens Bank was founded in 1828 and as of September 2019, had $150 billion in assets.

Citizens Access’ online CD accounts require a pretty high opening deposit of $5,000. However, all its terms earn at premium rates, making your savings more worthwhile. Citizens Access also offers an easy opening process to build a CD ladder with them. You’ll need to deposit at least $5,000 in each new CD, though.

When you fund any new Citizens Access CD within 10 days after opening, the bank’s CD Rate Pledge will apply, snagging you the highest interest rate offered by the bank for that CD term within those 10 days. Here are their rates:

CD TermAPY
6 months1.60%
12 months1.50%
18 months2.10%
2 years1.50%
3 years1.55%
4 years1.60%
5 years1.65%
3 months – 5 years: Synchrony Bank – 0.25% APY – 1.65% APY; $2,000 minimum deposit to open

Synchrony Bank

SEE DETAILS 

Member FDIC

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. If you have $2,000 or more to deposit into a CD, Synchrony will offer you some of the best CD rates. However, if you have less than $2,000, you’re better off going with one of the other online banks above. 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.

CD TermAPY
3-months0.25%
6-months0.50%
9-months0.75%
12-months1.50%
15-months1.50%
18-months1.50%
24-months1.50%
36-months1.55%
48-months1.60%
60-months1.65%
30 days – 5 years: BrioDirect – 0.05% APY – 1.25% APY; $500 minimum deposit to open

BrioDirect

SEE DETAILS Secured

on BrioDirect’s secure website

FDIC Insured

BrioDirect is the online division of Sterling National Bank. While its parent bank has been around for quite some time, the online division only recently launched. Right now, BrioDirect is offering a 1.25% APY on its 12-month CD. You’ll need to deposit a minimum of $500 to open the account and start receiving the 1.25% APY. If you choose to withdraw any portion of the principal, you’ll incur an early withdrawal penalty of 90 days interest. This penalty will apply regardless of whether you’ve earned that amount of interest or not. Here are all of their rates:

CD TermAPY
30-days0.05%
3-months1.00%
5-months1.95%
7-months1.35%
9-months1.20%
11-months1.35%
12-months1.25%
18-months1.00%
24-months1.00%
30-months1.00%
36-months1.00%
48-months1.00%
60-months1.00%

MagnifyMoney’s best no-penalty CD rates

No-penalty CDs are unique because these accounts allow customers to withdraw from their CD without incurring an early withdrawal penalty. These CDs are an attractive offer to customers as it provides no risk if they choose to withdraw their money early. Here are some of the best no-penalty CD rates that are available nationwide:

The Best No Penalty CD Rates in April 2020

Institution

APY

Minimum Deposit Amount

Goldman Sachs Bank

1.70% APY – 1.50% APY

$500

Ally Bank

1.40% APY – 1.55% APY

$25,000

Investors eAccess

1.15% APY

$500

Purepoint Financial

1.01% APY – 0.95% APY

$10,000

7 months – 13 months: Goldman Sachs Bank USA – 1.70% APY – 1.50% APY; $500 minimum deposit to open

Goldman Sachs Bank USA

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on Goldman Sachs Bank USA’s secure website

Member FDIC

Similar to its regular CDs, you only need a minimum of $500 to deposit into Goldman Sachs Bank USA’s no-penalty CDs. This makes these CDs highly attractive to customers with smaller deposits. If you choose to open one of these CDs, you’ll only be locked in for seven days after you fund the account. After the seventh day, you’re free to withdraw your funds, but keep in mind that you’ll need to withdraw the full amount.

These CDs are an excellent option if you want your money to remain liquid or if you want to invest your money into an interest-earning account for a short amount of time. One thing to note is that the 7-month no-penalty CD has a much higher rate than the regular 6-month CD (1.70% APY vs 0.60% APY). The high APY makes Goldman’s 7-month no-penalty CD a fantastic option if you want to earn interest in a short amount of time. Here is Goldman’s full list of no-penalty CD rates:

TermAPYMinimum balance to earn the APY
7-month1.70%
$500
11-month1.60%
$500
13-month1.50%
$500
11 months: Ally Bank – 1.40% APY – 1.55% APY; $0 – $25,000 minimum deposit to earn APY

Ally Bank

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on Ally Bank’s secure website

Member FDIC

Unlike the other two banks that offer multiple terms, Ally Bank only offers one term on its no-penalty CD. While Ally doesn’t require a minimum deposit to open, it does reward higher balances with higher APYs. This no-penalty CD is great for low-balance individuals who want to keep their money liquid. However, if you’re okay with locking your money into a CD for 12 months, you’re better off going with Ally’s regular 12-month CD as it has a higher APY (1.50% APY vs 1.40% APY) and doesn’t have a certain balance requirement to earn that high rate.

If you still choose to open Ally’s 11-month no-penalty CD and you need to withdraw money before the terms ends, you’ll need to withdraw your funds in full and won’t be able to do so until seven days after funding the account. Here are the tiered rates for Ally’s no-penalty CD:

TermAPYMinimum balance to earn the APY
11 months1.40%Up to $5,000
11 months1.50%$5,000
11 months1.55%$25,000
6 months: Investors eAccess – 1.15% APY; $500 minimum deposit to open

Investors eAccess

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on Investors EAccess’s secure website

Member FDIC

Investors eAccess is the online division of Investors Bank, a large bank headquartered in New Jersey that was established in 1926. The parent bank currently has over $26 billion in assets. The online division was launched earlier this year and decided to introduce itself by offering a strong rate on its inaugural product, the eAccess Money Market account. It seems this online bank is slowly offering different deposit accounts, but one thing that sticks out is that it’s offering these new products with high rates.

Currently, Investors eAccess is offering two types of CDs: a 6-month No-Penalty CD and a 10-month regular CD. The 6-month No-Penalty CD is comes with a strong 1.15% APY. You need at least $500 to open the account and you’re free to withdraw from the principal amount after the first seven calendar days from opening the account without incurring any penalties. If you choose to withdraw the full amount (including any interest earned) before the maturity date, you won’t incur any penalties, but the full withdrawal will close the account. Regardless of how much you choose to withdraw from the account, the bank will send you the funds via an official Bank Check. The check will be made out to the account owner and mailed First Class to the address on file.

TermAPYMinimum balance to earn the APY
6-month1.15%$500
11 months – 14 months: PurePoint Financial – 1.01% APY – 0.95% APY; $10,000 minimum deposit to open

PurePoint Financial

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on PurePoint Financial’s secure website

Member FDIC

PurePoint Financial is the online division of Union Bank. Both the parent bank and this online division are backed by financial giant, Mitsubishi UFJ Financial Group (MUFG). Under the MUFG Union Bank umbrella, this institution has acquired over $130 billion in assets. As its online division, PurePoint Financial has been able to offer its customers highly competitive rates not only in CDs, but in an online savings account.

Currently, PurePoint Financial is offering an extremely competitive rate of 0.95% on its 13-month no-penalty CD. It also offers an 11-month and a 14-month no-penalty CD, but those two accounts have lower rates than its 13-month no-penalty CD. Keep in mind that you’ll need at least $10,000 to deposit into any of these CDs. If you do choose to withdraw money from this CD before the term is up, you’ll need to withdraw the full amount. You’ll also have to wait seven days after you fund the account to withdraw any of the money. Here’s a full list of PurePoint Financial’s no-penalty CDs.

TermAPYMinimum balance to earn the APY
11-month1.01%$10,000
13-month0.95%$10,000
14-month0.90%$10,000

MagnifyMoney’s highest CD rates from banks and credit unions by term

The following banks and credit unions are currently offering the highest CD rates for each term.

The Highest CD Rates by term in April 2020

Time Period

Institution

APY

1 Year

Inova Federal Credit Union

2.25% APY

1 Year

Banesco USA

1.50% APY

2 Year

MAC Federal Credit Union

1.25% APY

2 Year

Synchrony Bank

1.50% APY

3 Year

Keesler Federal Credit Union

2.04% APY

3 Year

Primary Bank

2.00% APY

4 Year

Credit Union of the Rockies

2.60% APY

4 Year

Primary Bank

2.00% APY

5 Year

Hiway Federal Credit Union

2.10% APY

5 Year

Home Loan Investment Bank, F.S.B.

1.75% APY

Best 1-year CD rates

Best 1-year CD rate from a Credit Union: INOVA Federal Credit Union – 2.25% APY, $200 minimum balance

14 Month CD from INOVA Federal Credit Union
INOVA Federal Credit Union was established in 1942 to serve the financial needs of Miles Laboratories employees. INOVA has branches in California and Indiana, where it is based, plus Shared Branches around the country. You can join INOVA through an immediate family member, your employer or other organization.

For a slightly longer wait but a much more competitive rate, open an INOVA 14 Month Certificate. It requires a low $200 minimum deposit to open and start saving at its 2.25% APY. The early withdrawal penalty equals 180 days’ dividends.


SEE DETAILS Secured

on INOVA Federal Credit Union’s secure website

NCUA Insured

Best 1-year CD rate from a National Bank: Banesco USA – 1.50% APY, $1,500 minimum deposit

12 Month CD from Banesco USA
Look out for Banesco USA’s BaneSmart Certificates of Deposit and their competitive interest rates. For one, its 12-Month CD earns 1.50% APY on all balances under $250,000. You need at least $1,500 to open a new BaneSmart CD.

Part of Banesco International, Banesco USA is a Florida state-chartered bank founded in 2006. It maintains branches in South Florida and one in San Juan, Puerto Rico. You can access your Banesco USA accounts online, on mobile and over the phone.


SEE DETAILS 

Member FDIC

Best 2-year CD rates

Best 2-year CD rate from a Credit Union: MAC Federal Credit Union – 1.25% APY, $1,000 minimum deposit

24 Month Share Certificate from MAC Federal Credit Union
MAC Federal Credit Union was established in 1952 to serve active duty personnel and civil service members associated with Fort Wainwright. In 2001, the credit union expanded to serve the Fairbanks community. Now, they serve customers nationwide through online and mobile banking.

You can become a member a number of ways including residence, employment, and relation to an existing member. You can also become a member if you are part of, or choose to be part of, the Polar Bear Chapter of the Association of the United States Army. Once you’re a member, you can open the 24 Month CD with a minimum deposit of $1,000 and start earning the 1.25% APY. This CD has an early withdrawal penalty that is equal to 90 days of interest.


SEE DETAILS Secured

on MAC Federal Credit Union’s secure website

NCUA Insured

Best 2-year CD rate from a National Bank: Synchrony Bank – 1.50% APY, $2,000 minimum deposit

24 Month CD from Synchrony Bank
A common rate-leader in the best rate climates, Synchrony Bank stands out now for its competitive 2-year CD rate in a rocky rate climate. Synchrony CDs require at least $2,500 to open. The penalty for an early withdrawal will equal 80 days of simple interest at the current rate at the time of withdrawal.

Known for its credit card business, Synchrony holds its own in the deposits space, too, with its consistently competitive deposit account rates. Synchrony CD customers can access their accounts online and on the Synchrony mobile app, but Synchrony also offers ATM access for its money market and savings account customers.


SEE DETAILS Secured

on Synchrony Bank’s secure website

Member FDIC

Best 3-year CD rates

Best 3-year CD rate from a Credit Union: Keesler Federal Credit Union – 2.04% APY, $1,000 minimum deposit

30 Month Step CD from Keesler Federal Credit Union
Founded in 1947, Keesler Federal Credit Union is based in Mississippi. It has 34 branches throughout Alabama, Louisiana, Mississippi and the United Kingdom. You can join Keesler Federal if you’re an employee of select groups, a member of select Alabama/Louisiana/Mississippi communities, a Keesler Air Force Base or Royal Air Force Bases military or a family member of a current Keesler Federal member.

Keesler Federal’s 30 Month Step Certificate requires only $1,000 to open. It earns a 1.50% APR for the first 10 months, a 2.50% APR for the next 10 months and a 3.50% APR for the final 10 months, resulting in a blended 2.04% APY.

The early withdrawal penalty if your withdrawal drops your balance below $1,000 will equal either 180 days’ dividends on the entire amount of the certificate or all dividends on the entire certificate since the date of issuance or renewal, whichever is less. The certificate will also be closed. If your withdrawal doesn’t drop your balance below $1,000, the penalty will be the same, but your account won’t be closed.


SEE DETAILS 

NCUA Insured

Best 3-year CD rate from a National Bank: Primary Bank – 2.00% APY, no minimum deposit

4 Year CD from Primary Bank
Primary Bank was established in 2015 and is headquartered in New Hampshire. The bank has acquired over $255 million in assets. If you’re interested in opening a 3-year CD with this bank, you won’t need a specific deposit amount. The bank also doesn’t have a balance requirement to earn the 2.00% APY. The bank may impose an early withdrawal penalty if you choose to withdraw from the principal early, but you’ll have to contact the bank to learn about the penalty.


SEE DETAILS Secured

on Primary Bank’s secure website

Member FDIC

Best 4-year CD rates

Best 4-year CD rate from a Credit Union: Credit Union of the Rockies – 2.60% APY, $1,000 minimum deposit

48 Month Promotional IRA from Credit Union Of The Rockies
Credit Union of the Rockies was established in 1937 to serve employees of the Farm Security Administration in Denver. With membership that extends to other government agencies, select companies, organizations and geographic areas, the credit union now serves 10,000 members nationwide. The credit union provides customers with Shared Branch and ATM access through the CO-OP network

Credit Union of the Rockies offers a few Promo CDs, including a 48 Month Promo CD, for its new customers. These require a $1,000 deposit, rather than the credit union’s usual $500 deposit. The early withdrawal penalty will equal 180 days of interest. I that’s more interest than you’ve earned, your principal will not be touched.


SEE DETAILS Secured

on Credit Union Of The Rockies’s secure website

NCUA Insured

Best 4-year CD rate from a National Bank: Primary Bank – 2.00% APY, $0 minimum deposit

4 Year CD from Primary Bank
Primary Bank was established in 2015 and is headquartered in New Hampshire. The bank has acquired over $255 million in assets. If you’re interested in opening a 4-year CD with this bank, you won’t need a specific deposit amount. The bank also doesn’t have a balance requirement to earn the 2.00% APY. The bank may impose an early withdrawal penalty if you choose to withdraw from the principal early, but you’ll have to contact the bank to learn about the penalty.


SEE DETAILS Secured

on Primary Bank’s secure website

Member FDIC

Best 5-year CD rates

Best 5-year CD rate from a Credit Union: Hiway Federal Credit Union – 2.10% APY, $25,000 minimum deposit

60 Month CD from Hiway Federal Credit Union
Hiway Federal Credit Union was founded in 1931 to serve the financial needs of Minnesota Department of Transportation employees. Today, membership is extended to members of select communities, employees of select employer groups, relatives and roommates of eligible individuals and members of the Minnesota Recreation and Park Foundation or Association of the U.S. Army.

You’ll need a $25,000 minimum deposit to snag this top rate from Hiway Federal Credit Union. Smaller deposits as low as $500 will still earn interest, just at lower interest rates. The early withdrawal penalty for this range of CDs equals 365 days’ dividends.


SEE DETAILS Secured

on Hiway Federal Credit Union’s secure website

NCUA Insured

Best 5-year CD rate from a National Bank: Home Loan Investment Bank, F.S.B. – 1.75% APY, $2,500 minimum deposit

5 Year e-CD from Home Loan Investment Bank, F.S.B.
Home Loan Investment Bank, F.S.B. is offering a high APY of 1.75% on a 5 Year e-CD. You’ll need $2,500 to open the account. The early withdrawal penalty is six months’ interest on the amount withdrawn. This penalty applies to all CD terms from this bank.

Home Loan Investment Bank, F.S.B. was built with the intention of offering home loans to residents of Rhode Island. However, it has grown to offer much more than home loans. The bank currently has over $301 million in assets and continues to innovate by offering new accounts like e-CDs.


SEE DETAILS Secured

on Home Loan Investment Bank, F.S.B.’s secure website

Member FDIC

The cities that are most likely to use CDs for their savings

We recently looked at the 100 largest U.S. metros to find the cities with the highest percentage of households that own certificates of deposit.

Among the 100 largest U.S. metros, San Francisco came out on top, with 25.4% of households owning certificates of deposit. That’s more a little more than twice as many households, on a percentage basis, than Greensboro, N.C., our bottom-ranked city, where only 12.5% of households own CDs.

Typically, households in large cities are more likely to sock money away in CDs. Chicago, Los Angeles, New York and Washington, D.C. — among the 10 largest metros in the U.S. — all make our list of top 10 cities where people own CDs. There are some exceptions: Odgen, Utah ranks No. 4 in the nation for CD saving: 21.9% of Ogden households have CDs.

Variability in local CD rates may explain some of the differences, as the highest rates available by state can vary by as much as one percentage point. In fact, in Jan. 2019, Utah had the highest average local 1-year CD yield in the country.

Questions to ask before you open a CD

1. How are CDs different from savings accounts?

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 rate – and the higher the penalty for closing the CD early. With a savings account, you’re limited to six withdrawals or transfers per month. Otherwise, you can empty the account at any time without paying a penalty. You can’t lock in the interest rate on a savings account, though, since the bank can change the interest rate at any time.

2. Am I better off keeping my cash in savings?

CDs work best if you’re confident you won’t need to access a certain amount of money for a specified period of time. Let’s say you have $10,000 laying around that you can safely say you won’t need to use for two years. In a high-yield savings account earning 2.45%, you would earn $496.00 over two years with annual interest compounding — and potentially even more, if your bank compounds interest more frequently. If you put that money into a 2.90% 2-year CD, you would earn $588.41 (compounding yearly) once the account matures. The extra interest income is easy money, considering the ease of opening an account online. However, if you think you might need to use the money in the next couple of months, especially if your finances are already a little rocky, a savings account is a much better idea for its better flexibility.

It’s important to note that deposit rates are a bit in flux right now, due to the uncertainty surrounding the federal funds rate (more on that below). But we’re currently seeing some high, favorable interest rates on 1-year CDs, rates that outstrip savings account rates.

If you can afford to part with the funds, “choosing a 1-year CD now does make sense rather than keeping the money in a savings account,” says Ken Tumin, founder of LendingTree-owned DepositAccounts.com. “However, it is possible that 1-year rates could go below some savings account rates.”

That’s why it’s important to compare rates before you sign up for a certain account.

Tumin also notes that there is an added tax benefit to opening a 1-year CD now over a savings account. With a 1-year CD, you can choose to have interest paid at maturity, or in 2020 on accounts opened now. Taxes would be owed on that interest for 2020, but not paid until 2021. Savings accounts, on the other hand, pay out interest each month. So a savings account opened today will generate interest income for the 2019 tax year.

3. What CD term length should I select?

The early withdrawal penalties on CDs can be significant. On a 1-year CD, 90 days’ worth of interest is a typical penalty, although it can reach as high as 180 days. On 2- and 3-year CDs, a 6-month penalty is about average. 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 earn 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 risk of early withdrawal penalties, it’s important that you’re completely confident that you will not need to withdraw the money early. Check that you already have enough savings in a flexible emergency fund to cover you for the next few years in the event of an accident or surprise trip to urgent care. Ask yourself whether your deposit would be put to better use paying off any debts. If you’re not completely convinced you can sock away that much money for such a commitment, go for a shorter CD term or a savings account.

As of right now, if you’re trying to jump on the best rates and have cash to stash away for years, your best bet is to lock in a 5-year CD to get the best rates possible.

“It doesn’t look like we’ll see another Fed rate hike in the first half of the year,” says Ken Tumin. “In the last month or two, we’re seeing some drops in CD rates.”

However, this downward movement looks like more of a correction being made by banks who may have boosted their CD rates too far too fast, instead of signaling the start of an industry-wide drop in rates.

“We won’t see a big drop until we see signs that the Fed will start cutting rates,” Tumin notes.

Tumin suggests finding long-term CDs with small or mild withdrawal penalties, like Ally. That way, in the event you do need to break into your funds (whether for an emergency or to move to a new, higher rate), you won’t lose the majority of your savings. So while there are still 5-year CDs out there with 3% APY and higher, you’re going to want to lock those in for the long term.

4. Should I consider my local bank or credit union?

The interest rates shown in this article are all from credit unions and online banks that offer products nationally. However, 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. 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 and lower fees.

If you’re worried about early withdrawal penalties, credit union CDs might be your best bet; on average, they tend to have lower penalties than banks. Pair that with high credit union CD rates, and you’ve got a winning savings combo. (Interestingly, while internet banks tend to offer the best CD rates, they also tend to assess bigger early withdrawal penalties than brick-and-mortar banks.)

How to find the best CD for you

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.

Even though CDs are traditionally pretty structured, you still have hundreds of options available to you. If your savings goal is years in the future, look closer at longer terms like 5- and even 10-year accounts. If you don’t quite have thousands of dollars to stash away, you can find a bank that requires a lower minimum deposit, if at all. You can also find select no-penalty CDs, which tend to be around one year long or less.

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