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The Best CD Rates – May 2019

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The Best CD Rates
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Updated May 17, 2019

If you’re looking for a better yield on your savings and have time to burn, a high-rate CD at an online bank would be a great option. With a CD, you agree to lock up your funds in an account for a specific period of time, and in return the bank offers a higher yield than you’d find on a standard savings account. If you’re not keen on the idea of completely locking your money away for a set amount of time, you may want to consider a no-penalty CD. These accounts give you the benefit of locking down a rate for a set amount of time without requiring you to lock in your money for the length of the term.

CDs are often seen as the next level up after savings for that reason. If you’ve maxed out your savings account with enough funds to see you through the next year or so, it can be wise to start shoveling savings into a CD to maximize your returns.

For the best CD rates in the industry, check out online banks. They tend to offer much better interest rates than traditional banks, thanks to the lack of typical brick-and-mortar costs.

For example, let’s say you find a 12-month CD at a big brick-and-mortar bank that requires a $1,000 minimum deposit and pays 0.05% APY. If you were to open that account with just the minimum, you’d earn 50 cents after a year. Even a bigger deposit of $10,000 would only yield $5 at maturity.

At an online bank, on the other hand, you could earn 2.80% often with no minimum deposit. Opening the account with $1,000 would yield $28, while a $10,000 deposit would earn $280 in a year, a much better return on your money no matter how you look at it. (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 from top banks and credit unions

To find the best CD rates, we look for the banks and credit unions that consistently offer competitive CD rates month over month. This list is updated monthly, and competition continues to intensify. Here are the accounts from banks and credit unions with consistently competitive CD rates:

3 months – 5 years: Ally Bank – 0.75% APY – 3.00% APY; $0 minimum deposit to open (higher APY with higher deposit)
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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 3.00% 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)
  • 0.75% APY ($25k minimum deposit)
18-months:
  • 2.40% APY (less than $5k)
  • 2.55% APY ($5k minimum deposit)
  • 2.60% APY ($25k minimum deposit)
6-months:
  • 1.00% APY (less than $5k)
  • 1.00% APY ($5k minimum deposit)
  • 1.00% APY ($25k minimum deposit)
3-year:
  • 2.50% APY (less than $5k)
  • 2.60% APY ($5k minimum deposit)
  • 2.65% APY ($25k minimum deposit)
9-months:
  • 1.25% APY (less than $5k)
  • 1.25% APY ($5k minimum deposit)
  • 1.25% APY ($25k minimum deposit)
5-year:
  • 3.00% APY (less than $5k)
  • 3.00% APY ($5k minimum deposit)
  • 3.00% APY ($25k minimum deposit)
12-months:
  • 2.70% APY (less than $5k)
  • 2.70% APY ($5k minimum deposit)
  • 2.70% APY ($25k minimum deposit)
6 months – 5 years: Capital One – 0.60% APY – 3.00% APY; no minimum deposit to open
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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’ and Ally’s 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. In addition to this bank’s competitive CD rates, it also has interest-earning savings, checking, and money market accounts that offer top rates. We believe this makes Capital One a great option for those wanting to do all their banking in one place.

CD TermAPY
6-months0.60%
9-months0.80%
12-months2.70%
18-months2.70%
24-months2.75%
30-months2.75%
36-months2.80%
48-months2.85%
60-months3.00%
1 Year – 3 Years: Rising Bank – 2.80% APY – 2.90% APY; $1,000 minimum deposit to open
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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 2.80% APY on its 1-year CD. However, unlike some of the top online banks like Ally and Capital One, 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-year2.80%
2-year2.87%
3-year2.90%
6 months – 6 years: Goldman Sachs Bank USA – 0.60% APY – 3.05% APY; $500 minimum deposit to open
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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-months2.70%
18-months2.60%
2-year2.65%
3-year2.70%
5-year3.00%
6-year3.05%
3 months – 5 years: Synchrony Bank – 0.75% APY – 3.10% APY; $2,000 minimum deposit to open
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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 or credit union 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-months0.75%
6-months1.00%
9-months1.25%
12-months2.70%
15-months2.85%
18-months2.70%
24-months2.80%
36-months2.85%
48-months2.90%
60-months3.10%
1 year – 5 years: Barclays Bank – 2.65% – 3.00% APY, no minimum deposit to open
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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-year2.65%
2-year2.70%
3-year2.75%
4-year2.80%
5-year3.00%
3 months – 10 years: Discover Bank – 0.35% APY – 3.10% APY, $2,500 minimum deposit to open
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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-months2.65%
18-months2.65%
2-year2.70%
30-months2.70%
3-year2.75%
4-year2.80%
5-year3.00%
7-year3.05%
10-year3.10%

The 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:

11 months – 14 months: PurePoint Financial – 2.15% APY – 2.50% APY; $10,000 minimum deposit to open
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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 2.50% 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-month2.15%$10,000
13-month2.50%$10,000
14-month2.25%$10,000
7 months – 13 months: Goldman Sachs Bank USA – 2.25% APY – 2.35% APY; $500 minimum deposit to open
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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 (2.25% 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-month2.25%
$500
11-month2.30%
$500
13-month2.35%
$500
11 months: Ally Bank – 1.80% APY – 2.30% APY; $0 – $25,000 minimum deposit to earn APY
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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 (2.70% APY vs 1.80% 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 months1.80%Up to $5,000
11 months2.15%$5,000
11 months2.30%$25,000

The 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.

Best 1-year CD rates

Best 1-year CD rate from a National Bank: CD Bank – 3.00% APY, $10,000 minimum deposit
12 Month CD from CD Bank

CD 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 1-year CD with an APY of 3.00%. 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 365 days of 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.


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Best 1-year CD rate from a Credit Union: State Department Federal Credit Union – 2.73% APY, $500 minimum deposit
12 Month Certificate from State Department Federal Credit Union

State Department Federal Credit Union was established in 1935 by a group of the United State Department of State employees. While it was originally intended to help those employees, membership has expanded to include a lot more people. You can become a member of this credit union if you’re a U.S. Department of State employee, are a part of one of the credit union’s organization affiliates, through group membership, or an immediate family member of an existing member of the credit union. If you don’t qualify through any of those ways, you can choose to become a member of the American Consumer Council (ACC) when you apply for membership to this credit union. Once you become a member of this credit union, you can open its 12-month CD, which is currently earning a 2.73% APY. You’ll need a minimum of $500 to open the account. This CD has an early withdrawal penalty that is worth 180 days of interest.


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Best 2-year CD rates

Best 2-year CD rate from a National Bank: CD Bank – 3.20% APY, $10,000 minimum deposit
24 Month CD from CD Bank

Not only is CD Bank offering a high rate on its 1-year CD, its also offering a 2-year CD with a high rate. You will need to deposit a minimum of $10,000 in order to earn an APY of 3.20%. The early withdrawal penalty for this CD is equal to 18 months interest on the withdrawn amount. Just like the 12-month CD, 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.


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Best 2-year CD rate from a Credit Union: State Department Federal Credit Union – 2.83% APY, $1,000 minimum deposit
24 Month Certificate from State Department Federal Credit Union

State Department Federal Credit Union also has a top rate on its 24-month CD. With a minimum deposit of $500, you can earn an APY of 2.83%. The early withdrawal penalty on this CD is also 180 days just like the 12-month CD. If you’re not already a member of this credit union, you’ll have to first join the credit union before you can open this account. If you don’t qualify through employment, organization affiliation, or family relations, you can select to join the ACC when you apply for membership.


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Best 3-year CD rates

Best 3-year CD rate from a National Bank: First National Bank of America – 3.00% APY, $1,000 minimum deposit

36-47 Month CD from First National Bank of AmericaFirst National Bank of America was established in 1955. Originally, its goal was to focus on the local Michigan community’s financial needs. However, they decided to expand in 2011 in an effort to help even more people. Today, this bank services customers nationwide. First National Bank of America is currently a top APY of 3.00% on its 36-month CD. You’ll need a minimum of $1,000 to open the account. You’ll have to call the bank to learn what the early withdrawal penalty is for this term as the bank doesn’t disclosure this information online.While this bank offers a top rate for a 3-year CD, other national banks offer higher rates on shorter terms. If you’re willing to keep your money in a CD for one more year, you might want to consider this bank’s 4-year CD.


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Best 3-year CD rate from a Credit Union: Sun East Federal Credit Union – 2.75% APY, $500 minimum deposit
36 Month CD from Sun East Federal Credit Union

Sun East Federal Credit Union was founded in 1949 by employees of the Sun Oil Company. Since its establishment, it’s grown to acquire over $594 million in assets and has opened its membership to include more individuals. You can join this credit union by making a $10 donation to the Sun East Charitable Foundation if you don’t qualify with its other fields of membership. Once you become a member, you can open the credit union’s 3-year CD. With a minimum deposit of $500, you can earn an APY of 2.75%. This CD has an early withdrawal penalty that is worth 180 days of interest. If you’re wanting to get your foot in the door with a credit union, this is a great account to start off with, but if you’re looking for the account with the best CD rate, you should consider one of the national banks on this list with a shorter term.


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Best 4-year CD rates

Best 4-year CD rate from a National Bank: First National Bank of America – 3.10% APY, $1,000 minimum deposit

48-59 Month CD from First National Bank of America
First National Bank of America is offering the best CD rate on a 4-year CD. With a minimum deposit of $1,000, you can earn 3.10% APY. This is definitely worth it if you’re okay with locking your money away for four years. Make sure to ask the bank what the early withdrawal penalty is on this CD just in case you need to withdraw before the term ends.


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Best 4-year CD rate from a Credit Union: Veridian Credit Union – 3.05% APY, $1,000 minimum deposit
41 Month Bump Up CD Special from Veridian Credit Union

Veridian Credit Union was established in 1934 by employees of John Deere. According to Veridian Credit Union’s history, the employees wanted to provide alternatives to for-profit institutions for their coworkers. Today, Veridian operates similarly even though they’ve expanded their field of membership to include almost anyone by allowing applicants to register as a user of Dwolla if they’re not eligible any other way. Once you become a member, you can open this 41-month CD with a minimum of $1,000. This account earns an APY of 3.05%. The early withdrawal penalty on this CD is equal to 180 days’ interest. Veridian Credit Union allows you to manage your account online as well as through their mobile app.


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Best 5-year CD rates

Best 5-year CD rate from a National Bank: First National Bank of America – 3.20% APY, $1,000 minimum deposit

60 Month CD from First National Bank of AmericaFirst National Bank of America makes it on our list of the best CD rates a third time. Its 60-month CD is currently earning an APY of 3.20%. You’ll need a minimum of $1,000 to open the account. This bank also offers Flex CDs, which will allow for a one-time increase on the rate during the term of the account. The APY on the 60-month Flex CD is currently lower than the rate on the regular 60-month CD, but may be worth looking into.


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Best 5-year CD rate from a Credit Union: Sun East Federal Credit Union – 3.00% APY, $500 minimum deposit
60 Month CD from Sun East Federal Credit Union

Sun East Federal Credit Union makes it on our list for a second time. Its 60-month CD is currently earning a top rate amongst credit unions with a 3.00% APY. You’ll need a minimum of $500 to open the account. The early withdrawal penalty for this term is only 180 days, which is pretty low for long-term CDs.


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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 2.35%, you would earn $475.52 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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Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at [email protected]

Lauren Perez
Lauren Perez |

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

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Best of, Earning Interest

The Top 6 Month CD Rates for May 2019

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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 May 3, 2019, and we excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.896%, 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

6 Month CD from CD Bank

CD Bank

6 month CD APY: 2.35%
Bank information: CD Bank offers only CD accounts that range from three to 60 months. CD Bank is an online division of TBK Bank, which is itself a subsidiary of Triumph Bancorp, Inc.
Where to open CD account: Online
Minimum balance to open: $10,000
Maintenance fees: $0
Early withdrawal penalties: 3 months’ interest on the amount withdrawn

LEARN MORE Secured

on CD Bank’s secure website

Member FDIC

6 Month Online Time Deposit from My eBanc

My eBanc

6 month CD APY:2.60%
Bank information: My eBanc is a division of BAC Florida Bank of Coral Gables, Fla., which 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

7 Month CD from MutualOne Bank

MutualOne Bank

7 month CD APY: 2.53%
Bank information: MutualOne Bank is a Massachusetts state-chartered mutual bank. It was originally Framingham Co-operative Bank when founded in 1889 and became MutualOne Bank in 2012.
Where to open CD account: Online
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE Secured

on MutualOne Bank’s secure website

Member FDIC

6 Month No Penalty CD from Investors eAccess

Investors eAccess

6 month CD APY: 2.50%
Bank information: Investors eAccess is a division of Investors Bank which was founded in 1926 and is headquartered in New Jersey with branches throughout New Jersey, New York City and Long Island.
Where to open CD account: Online
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: None, except on withdrawals within the first six calendar days after opening. Such withdrawal will close your CD.

LEARN MORE Secured

on Investors EAccess’s secure website

Member FDIC

6 Month CD from WebBank

WebBank

6-month CD APY: 2.50%
Bank information: WebBank was founded in 1997 and is headquartered in Salt Lake City. It offers a savings account and several Time Deposits, its take on CDs. You can access your accounts online and over the phone.
Where to open CD account: Online
Minimum balance to open: $2,500
Maintenance fees: $0
Early withdrawal penalties: 3 months’ interest

LEARN MORE Secured

on WebBank’s secure website

Member FDIC

Credit unions with the best 6 month CD rates

8 Month Certificate Special from Andrews Federal Credit Union

Andrews Federal Credit Union

8 month CD APY: 2.86%
Credit union information: Andrews Federal Credit Union was founded in 1948 and is headquartered in 1948. It currently serves over 120,000 members worldwide.
Membership details: Andrews FCU membership includes residents of Washington, DC, Maryland, Virginia and New Jersey, including Joint Base Andrews and Joint Base McGuire/Dix/Lakehurst. It serves military installations abroad in central Germany, Belgium and The Netherlands. Andrews FCU also extends membership to Select Employee Groups throughout Maryland, Virginia and New Jersey.
Where to open CD account: Online or at an Andrews FCU branch.
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days of dividends

LEARN MORE Secured

on Andrews Federal Credit Union’s secure website

NCUA Insured

6 Month Regular Certificate from Advancial

Advancial

6 month CD APY: 2.45%
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.

LEARN MORE Secured

on Advancial’s secure website

NCUA Insured

36 Month Share Certificate from Communitywide Federal Credit Union

Communitywide Federal Credit Union

6 month CD APY:2.40%
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

PenFed Credit Union

PenFed Credit Union

6 month CD APY: 2.20%
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

6 Month CD from Pinnacle Federal Credit Union

Pinnacle Federal Credit Union

6 month CD APY: 2.20%
Credit union information: Pinnacle Federal Credit Union has been a not-for-profit credit since 1962. It serves Edison, N.J. and the surrounding county with its two physical branches.
Membership details: Pinnacle Credit Union offers membership to employees of select partner companies and their family members. The credit union currently serves over 300 companies and 20,000 members. You can also join by becoming a member of the American Consumer Council. PCU will pay the $5 membership fee.
Where to open CD account: You can open an account online or at one of the credit union’s two New Jersey branches.
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ dividends

LEARN MORE Secured

on Pinnacle Federal Credit Union’s secure website

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.

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Gabby Hyman
Gabby Hyman |

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

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