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Earning Interest

Best Money Market Rates & Accounts – August 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Updated August 1, 2019

If you’re looking to save more money beyond your regular savings account, consider adding a money market account to the mix. A money market account can earn at a higher rate than a savings account, especially if you have a larger balance to deposit. Many MMAs tier their rates as well, rewarding higher balances with higher rates.

Like most deposit accounts, the rate on money market accounts has grown over the past few years, up from 0.188% APY in 2016 to 0.402% APY in June 2019. Savings account rates have also increased, but still averaged only 0.279% APY in June 2019.

You can do much better than a 0.402% APY on a money market if you’re willing to break with traditional brick and mortar banks. Opening an MMA at the bank around the corner, for example, may not yield more than 1.00% APY, while an internet-only bank might offer a rate of 2.00% APY or higher. With a rate like that, you can boost your savings by a wide margin.

If you were to put $50,000 into an MMA earning 0.04%, you would earn only $20 in interest over a year. Put that same starting amount into an online bank account at 2.00%, and you’d earn $1,000 in interest over a year.

With so many options out there, it can seem daunting to search for a new bank account with a potentially new bank. We’ve made it it easier for you by rounding up the best money market accounts out there. We searched through over 12,000 banks and credit unions to find the money market accounts paying the highest interest rates. We also looked at an account’s minimum requirements and fund accessibility.

Overall, we found that internet banks consistently beat the competition. You might not recognize all their names — new online banks are continuing to crop up — but if it’s high interest rates you’re looking for, it might be good to branch out since online banks are the way to go. Here are our favorite rates for July 2019:

1. High Rate + bonus: BBVA – 2.40% APY, $10,000 minimum deposit and balance to earn APY + $100 bonus

BBVA Money Market Account - New Money Market Customer from BBVABBVA was established in 1964 and has grown to have over $92 billion in assets. This giant bank hasn’t always been known for its competitive rates on bank accounts, but has recently been offering top rates on several accounts. Its money market account is a clear example. BBVA is currently offering a 2.40% APY on balances of at least $10,000 to new customers. If you can’t deposit or maintain a balance of $10,000, you’ll still earn a decent APY of 2.00%. You only need $25 to open the account and you’ll start earning the lower rate until your balance reaches $10,000. This account does have a monthly service fee of $15, but there are two ways that you can waive this fee:

  1. Schedule a recurring transfer of at least $25 each month to the money market account from a BBVA checking account
  2. Maintain a balance of at least $10,000

In addition to this high rate, BBVA is currently offering a $100 bonus if you open the money market account by 8/31/2019 with a balance of at least $10,000. You’ll have to maintain that minimum balance through 11/30/2019. The bonus will then be deposited into your account 90 days after you meet the requirements.

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on BBVA’s secure website

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2. High Rate: UFB Direct – 2.15% APY, $25,000 minimum deposit and balance to earn APY

UFB Premium Money Market - New Money from UFB DirectUFB Direct is a division of Axos Bank, a federally chartered, publicly traded and FDIC-insured bank based in San Diego. In recent months, UFB Direct has become increasingly aggressive with high rates targeting big balances. The APY of 2.15% is an outstanding rate, but you need to have a balance of at least $25,000. If your balance drops below that, you’ll earn an APY of 0.50%. You’ll also need to keep an average daily balance of at least $5,000 in the account in order to avoid a monthly maintenance fee of $10.00. You will get a Visa debit card and have access to limited check writing. We think this is the best option for people with big balances that they want to keep in a money market account.

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on UFB Direct’s secure website

Member FDIC

3. Trusted Bank: Capital One – 2.00% APY, $10,000 minimum balance to earn APY

360 Money Market from Capital OneYou may think of credit cards when you think of Capital One, but don’t overlook their deposit accounts. The 360 Money Market account currently comes with a great 2.00% APY. While the bank doesn’t require you to have a minimum amount to open the account, you will have to maintain a balance of $10,000 or more to earn their high rate. If your balance falls below that amount, you’ll earn an APY of 0.85%. We really like that Capital One doesn’t impose any monthly fees, and while they don’t offer checks, they do provide you with an ATM card that you can use to withdraw up to $1,000 per day. While you’re able to make an unlimited amount of withdrawals from an ATM per month, remember that you’re limited to making six certain transfers and withdrawals per cycle due to Federal Law. To access this account, you may do so online, in person, or on-the-go through Capital One’s mobile app.

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on Capital One’s secure website

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4. Favorite Online Package: Ally – 0.90% APY, no minimum deposit and link to free checking

Online Savings Account from Ally BankAlly Bank is a very popular internet-only bank. If you keep a daily balance of $5,000 or less, you will earn the 0.90% APY. If you’re able to keep a minimum daily balance of $25,000 the APY increases to 1.00%. Although the interest rate on the money market account is not the highest, Ally does offer a very competitive overall package – particularly if you link the account to an Ally checking account. The checking account has no minimum balance and no monthly fee. You can link your money market account to your checking account to provide overdraft protection. Money would be transferred to your checking account with no transaction fee if you ever made a mistake. You would be able to access your money market account with your Ally ATM card, which has free AllPoint access and up to $10 of non-Ally ATM fees reimbursed every month. This money market account is a nice way to provide yourself with overdraft protection while earning interest. If you don’t need check-writing capabilities on your savings, you would still be better off with Ally’s savings account.

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on Ally Bank’s secure website

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The rest of these are the best money market accounts listed by APY regardless of minimum balance:

5. High Rate: Western State Bank – 2.25% APY, no minimum balance to earn APY

High Yield Money Market from Western State BankWestern State Bank was chartered in 1902 as the Bank of Webster due to its location in Webster, North Dakota. In 1966, a group of people purchased the Bank of Webter and in 1968, this group of individuals moved the bank’s headquarters to another part of North Dakota and changed its name to Western State Bank. At that time, the bank had $600,000 in assets. Today, the bank has over $1 billion dollars in assets and serves customers nationwide.

Western State Bank is currently offering a remarkable 2.25% APY on its High Yield Money Market account. The bank does not require a minimum deposit amount to open the account nor do they require a minimum balance to earn the high rate. They do, however, place a limit on the how large of a balance the account can hold. If your balance exceeds $2,000,000, the APY will drop to 2.50%. While this account has an excellent rate, it does lack in features. Western State Bank will not provide checks or a debit card to go along with this account. You can only withdraw money via ACH, wire transfer, or the bank can mail you a cashier’s check if you call and ask for this method. The bank does have ACH limitations to keep in mind. You can only transfer $25,000 at a time and you can only do so six times per month (not exceeding $100,000). If you’re looking for a money market account with check-writing capabilities or ATM access, then this account may not be for you. If you’re looking for a high-yield savings account, then this account is a great place to deposit your money and earn interest.

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on Western State Bank’s secure website

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6. High Rate: Investors eAccess – 2.30% APY, no minimum balance to earn APY

eAccess Money Market from Investors eAccessInvestors eAccess is a new division of Investors Bank and launched at the beginning of April 2019. Powered by a bank that has over $26 billion in assets, it was able to show up in the market with a high-yield money market account. There isn’t a minimum deposit to open nor is there a minimum balance to earn the high APY. Once you open the account, you can start earning the 2.30% APY. You can fund the account via ACH or by sending Investors eAccess a check by mail. This account doesn’t offer check-writing capabilities and it doesn’t come with a debit or ATM card. You can withdraw money via ACH. You can only withdraw less than $250,000 per monthly statement cycle. Remember that money market accounts have the same limitation as savings accounts, so you can only make six certain transactions per monthly statement cycle. You can do all of your banking online or you can download Investors Bank’s mobile banking app. The bank has not created a specific app for Investors eAccess, but its website claims that you can manage this account from that app.

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on Investors EAccess’s secure website

Member FDIC

7. Guaranteed Rate through 12/31/19: Northern Bank Direct – 2.50% APY, $5,000 minimum deposit to open, checks and ATM card available

Money Market Account from Northern Bank DirectNorthern Bank Direct is the online division of Northern Bank, which was established in 1960. The parent bank has acquired over $2 billion in assets since it opened its doors. Currently, the online bank is offering 2.50% APY on its money market account. This rate is guaranteed until 12/31/2019.

One thing to be aware of with this bank – the same thing was offered last June. Last year, Northern Bank Direct offered a high rate (at the time) on its money market account, guaranteed the rate through June 2019, but only kept the product active for ten days. Fortunately, this rate has remained the same since the beginning of June. Just keep in mind that the bank can reduce the rate or completely stop offering this product at any time.

If you do decide to move forward with this account, you’ll need to deposit a minimum of $5,000 to open the account. Once the account is open, you can let the balance drop below $5,000 and still earn the APY. If you grow your balance past $250,000, the rate will drop. It will drop again if your balance goes above $1 million. There isn’t a monthly service fee. The bank does impose a maximum daily limit of $5,000 for external transfers and a $25,000 limit on monthly transfers. This account does come with check-writing capabilities and an ATM card.

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on Northern Bank Direct’s secure website

Member FDIC

8. High Rate: earn.bank – 2.46% APY, $100 to open, $0 minimum balance, $10k to avoid $10 monthly fee

Money Market Account from earn.bankearn.bank is a division of Silvergate Bank, a state-chartered bank headquartered in San Diego, CA. The state-chartered bank has over $1 billion in assets, and your deposit would be FDIC insured up to the legal limit. Silvergate Bank created earn.bank to provide “a transparent, powerful savings vehicle that will help you meet your savings goals”. At 2.46% APY, the internet-only bank is certainly starting out strong. You’ll need $10,000 to open the account, but there isn’t a minimum balance requirement to earn the high rate. A few downsides to this account include a $10 monthly maintenance fee that comes with a steep balance requirement if you want it waived. While you don’t need to maintain a minimum balance to earn the APY, you would need to maintain an average daily balance of $10,000 to avoid the monthly fee. The account does not come with check-writing privileges and there is no ATM access. You’ll also want to make sure you’re enrolled in eStatements as you’ll be charged a $25 fee for each paper statement you receive. You can deposit your funds via ACH (electronic transfer), which can take a couple of days. Just remember: there is a limit of 6 withdrawals per calendar month.

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on earn.bank’s secure website

Member FDIC

9. High Rate: MemoryBank – 2.25% APY, $50 minimum to open

Online Money Market Account from MemoryBankMemoryBank is the online division of Republic Bank & Trust Company. While this online division launched in 2016, its parent company has been around since 1982 and has over $5 billion in assets. Currently, MemoryBank is offering a 2.25% APY on its Online Money Market Account. You’ll need a minimum of $50 to open the account, but you won’t need to maintain this amount to earn the APY. The account doesn’t come with a monthly service fee, but it also doesn’t have check writing capabilities or ATM access. MemoryBank does have a mobile banking app to help you manage your account on-the-go.

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on MemoryBank’s secure website

Member FDIC

10. High Rate: Virtual Bank – 2.36% APY, no minimum balance to earn APY

eMoneyMarket from Virtual BankVirtual Bank, a division of IBERIABANK, is currently offering an introductory rate on their money market account that is the highest available. This rate is guaranteed for 12 months and will adjust to the standard rate that is in effect at the time. New customers can earn the 2.36% APY by depositing a minimum of $100. While there isn’t a minimum balance requirement to earn the APY, there is a balance requirement to avoid incurring the $5 monthly service fee. All you’ll have to do is maintain a daily minimum balance of $100 and they’ll waive the monthly fee. While this account doesn’t have any check writing capabilities, you can easily move money in and out of the account via ACH. Virtual Bank has a mobile app, that has the mobile check deposit feature, in addition to their online banking platform.

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on Virtual Bank’s secure website

Member FDIC

11. High Rate: Bay State Savings Bank – 2.10% APY, $5,000 minimum to open and avoid $7 monthly fee

Smile Worcester County Consumer Money Market from Bay State Savings BankBay State Savings Bank opened its doors in 1895 with a commitment to “be the community bank of choice” for its community. As time has gone on, this community bank has evolved to include digital banking and welcomes all U.S. residents to apply for an account. The bank has also grown to acquire over $400 million in assets. Currently, it’s offering a high rate on a money market account that does more than just hold your money. The money that you deposit helps Bay State Savings Bank support the economic growth of areas in need within Worcester County. So, not only will you be earning an outstanding APY 2.10%, but you’ll also be helping to an area in need of support. There are a few items to be aware of prior to opening the account: there is a $7 monthly fee if you can’t maintain a $5,000 balance and outgoing ACH transfers are limited to $10,000 per transaction. This account does come with check-writing capabilities and online bill payment services. Bay State Savings Bank is not only insured by the FDIC, but they are also insured by the Depositors Insurance Fund (DIF).

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on Bay State Savings Bank’s secure website

Member FDIC

Premier Members Credit Union – 4.00% APY up to $2k

Premier Members Credit Union

Premier Members Credit Union is open to anyone willing to make a $5 donation Impact on Education, a charity for the Boulder Valley School District. This credit union is currently offering an incredible rate of 4.00% with only $5 to open the account. You can earn this APY on balances up to $2,000. Amazingly, even if you grow the balance up to $5,000, you’ll earn 1.24% APY. As the balance increases, the APY decreases to the following:

  • $5,000.01-$10,000: 0.50%
  • $10,000.01-$50,000: 0.40%
  • $50,000.01-$100,000: 0.35%
  • $100,000.01-$250,000: 0.30%
  • $250,000.01+: 0.25%

Premier Members Credit Union rewards low balance savers by placing the highest rate with the lowest deposit, but if the balance grows they start using a reverse tier system where they blend the APY as the balance grows. Checks are available with this account, but you can only make six withdrawals per month. Each additional withdrawal will be assessed a $10 fee.

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on Premier Members Credit Union’s secure website

NCUA Insured

What is a money market account?

A money market account is a special type of savings account: Cash you put in the account remains deposited with the financial institution, where it earns a variable annual percentage yield. Because the name of this deposit product has the word market in it, you may assume a money market account is some kind of investment product, but it’s not.

One of the features that differentiates a money market account from a savings account is that institutions generally make it easier to access deposited funds by offering checks and ATM cards. Note that some institutions are starting to provide them for savings accounts, too. Keep in mind that much like a savings account, money market accounts are governed by Regulation D, the Federal Reserve rule stating you can only make a maximum of six withdrawals via check or debit card. Additional withdrawals may incur a fee from your bank or credit union.

It’s also important to understand that money market accounts are different from money market funds. In the 1980s, shoulder pads and hair weren’t the only things that were big: Yields on money market funds were both low-risk and offered a good rate of return. To help out the banking sector, Congress passed the Garn-St Germain Depository Institutions Act of 1982, which allowed banks to offer a new type of savings account — money market accounts — with an interest rate based on those offered in money markets.

What to consider before opening a money market account

Before you get bogged down in the details, let’s take a look at some quick pros and cons of a money market account.

Pros:Cons:
  • Typically carry higher interest rates than savings accounts
  • Convenient access to your funds with check-writing abilities and a debit/ATM card (not offered on all accounts)

  • May carry monthly maintenance fees or a high balance to waive one
  • Still limited to six transfers and withdrawals per month like a savings account (or you’ll face a fee)
  • You’re better off using a higher yield product like CDs for money you won’t need in the immediate future

Who money market accounts are best for

Now that you know the basics of a money market account, should you get one? They’re a good choice if you have a big deposit you’d like to keep safe and growing at a high interest rate. Then when you need to access that money, perhaps for an upcoming purchase or in an emergency, you can often easily do so with an ATM/debit card or by writing a check.

Savings accounts vs. money market accounts

Money market accounts often earn a higher rate than standard savings accounts. The caveat is that MMAs often require higher opening deposits or higher balances than a standard savings account. Even so, you may also find that one bank’s top money market rate earns at the same rate (or lower) as a savings account at another bank.

For example, one of the best savings accounts, Ally’s Online Savings account, offers a 1.90% APY while its money market account earns at a mere 0.90% APY (on most balances). So if it’s high interest rates you’re after, be sure to compare accounts across the board rather than turning immediately to a money market account. Just be sure to keep your balance limits in mind when shopping around.

What often separates money market accounts from savings accounts is their check-writing abilities or issued ATM/debit cards. This provides easier access to your money especially if you have larger balances you’re saving for a bigger purchase. Not all money market accounts offer these features, though. Furthermore, money market accounts are still savings vehicles, so they’re also limited to six outgoing transactions per month, like transfers and withdrawals.

Read more about the differences between money market and savings accounts here.

CDs can offer higher rates than money market accounts

Savings accounts and money market accounts often pay much lower interest rates than CDs. Right now you can get a 1-year CD paying 2.40% APY (with only a $500 minimum). You can find the best CD rates here. If you build a CD ladder, you can take advantage of 5-year rates that are currently as high as 2.60%. Creating a CD ladder also allows you to protect your investments over the years by locking in today’s high rates in a long-term account while also staying flexible for any potential rate increases with your shorter-term accounts. The interest rate on a money market account can change right away, at the bank’s discretion.

If you need some savings more immediately, money market accounts are great places to keep that money— it’ll keep growing, while still remaining accessible. In contrast, should you need to access your CD funds before it matures, you’ll likely face a pretty heavy penalty, typically forfeiting three to six months of interest.

A money market account isn’t the same thing as a money market fund

Money market accounts, like deposit accounts, provide FDIC insurance on your deposits up to $250,000. Money market funds, on the other hand, are investment accounts, most likely sold by your broker, and are regulated by the Securities and Exchange Commission instead. Money market funds invest in highly liquid cash and cash equivalent securities that typically mature within 13 months.

As an example, Vanguard offers the Prime Money Market Fund. Like other money market funds, this one “invests in short-term, high-quality securities.” Its objective is to keep the fund trading at $1 and generate a decent return. Still, money market funds can end up with a lower return than those you see from the money market accounts listed in this article. Since money market fund returns are dependent on the market and the Federal Reserve Rate, it’s important to keep an eye on the current interest rate climate to see whether investing in these funds are worth your time and money.

Money market funds charge expense ratios, or management fees, that are charged as a percentage of your fund (Vanguard’s is currently 0.16% as of Dec. 2018). You can also end up paying some transaction fees. It’s important to watch out for an account’s fees which can often lessen your total investment in the end. Like money market accounts, money market funds can also require a high minimum balance to open an account.

Most people compare the return of a money market fund (sold by their broker) to the interest rate paid by a traditional bank (sold by their local bank teller). As a result, they are willing to take the risk of a money market fund. However, as you can see from the best money market accounts in this article, you can get FDIC insurance and beat the return of most funds without taking on the risk of market investments.

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 [email protected]

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Best of, Earning Interest

The Best High-Yield Online Savings Accounts in August 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

The Best Online Savings Accounts

Updated August 22, 2019

There are no excuses for sticking with a low-rate savings account these days. Online savings accounts provide consumers with interest rates that are way above those offered by conventional banks. The best online savings accounts can easily earn you an APY of 2.15% or greater, while the average rate offered by a traditional brick-and-mortar bank remains at a paltry 0.26%.

If you’re still skeptical about switching to an online bank, consider the facts. Your funds are just as safe stashed with an FDIC-insured online bank as they would be with the bank branch on Main Street, and you’re likely to get better technical support with an online-only bank website and app. Many offer round-the-clock customer support and online chat features that make it easy to resolve issues without needing to visit a branch in person. Along with higher rates, you may end up saving on the cost of the account. With lower overhead costs, online banks typically charge lower fees.

Every month we review and compile the best savings account offers from online banks. Our ranking factors in features such as a higher-than-average interest rate, no minimum balance requirement, and superior ATM access.

1. High Rate: Goldman Sachs Bank USA – 2.15% APY, no minimum balance (but no ATM access)

High-yield Online Savings Account from Goldman Sachs Bank USA

Our advertiser Marcus by Goldman Sachs, the consumer bank of Wall Street giant Goldman Sachs, offers a 2.15% APY on deposits. There isn’t a minimum balance requirement to earn the APY and there are no transaction fees. Upon opening the account, you can deposit funds via electronic transfer, wire transfer, or deposit by check. You can get access to your funds via electronic transfer or wire transfer. Goldman has been investing heavily in Marcus, its online consumer bank. Marcus is already offering some of the best savings accounts and personal loans in the market, and further expansion is expected. The savings account has consistently been paying one of the highest rates in the market. With a 2.15% APY, you can get one of the highest rates in the market from a well-known brand. The maximum deposit is $1,000,000 and deposits are FDIC insured up to the $250,000 limit.

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on Goldman Sachs Bank USA’s secure website

Member FDIC

2. High Rate: Barclays Bank – 2.10% APY, no minimum balance

Online Savings Account from BarclaysBarclays is a large, old British bank, based in London and with more than 325 years of history. Although Barclays is huge in the United Kingdom, it is a challenger brand in the US. Barclays offers savings products with highly competitive rates. These deposits are used to fund their rapidly growing American credit card business. The online savings account has a 2.10% APY with no minimum balance to open and no monthly fees. Your deposits are FDIC insured up to the legal limit. The Barclays website has a good look and feel. And you can have the confidence of keeping your money with one of the world’s largest and oldest universal banks.

LEARN MORE Secured

on Barclays’s secure website

Member FDIC

3. High Rate: Synchrony Bank – 2.15% APY, no minimum balance, (and ATM access)

High Yield Savings from Synchrony BankSynchrony Bank pays a healthy 2.15% APY. There is no minimum balance requirement and no monthly fee. In addition to the great rate, you can get an ATM card. Most internet-only banks require you to transfer funds electronically, which can take a few days. If you ever need quick access to your funds, the ATM card makes access easy. You might not recognize the Synchrony brand in the banking space, but it is a large, well-capitalized business. Synchrony used to be a part of General Electric (GE), and was spun out as a separate company. Unfortunately, the digital experience is not the best, but they now have a mobile banking app.

LEARN MORE Secured

on Synchrony Bank’s secure website

Member FDIC

4. High Rate: American Express National Bank – 1.90% APY, no minimum balance (and no fees)

High Yield Savings Account from American Express National BankOur sponsored advertiser, American Express National Bank, offers a Personal Savings account, which earns a 1.90% variable Annual Percentage Yield (APY) as of 08/22/2019. The account charges no monthly fees and requires no minimum deposit, making it an affordable account to open. You must fund your account within 60 days of applying for the account, and the FDIC insures your deposits up to $250,000. Overall, the account is a great option for anyone who wants the flexibility of earning a high interest rate on a sum of money you’ve stashed away, minus the withdrawal restrictions of a certificate deposit.

LEARN MORE Secured

on American Express National Bank’s secure website

Member FDIC

5. High Rate: Vio Bank – 2.52% APY, $100 to open

High Yield Online Savings Account from Vio BankVio Bank is the online division of MidFirst Bank, a national private financial institution with over $16 billion in assets. Vio Bank was recently created and is not yet as established as Marcus, Barclays, American Express, Synchrony, and Ally Bank. However, this online bank launched strong with a High Yield Online Savings account offering 2.52% APY on all balances. You only need $100 to open the account. You can fund the account via ACH.

There are a few limitations to keep in mind: incoming ACHs take anywhere between two to five business days to post and the online bank may place a hold your ACH for two or three business days. When you’re ready to transfer funds out of the account, you’ll be limited to $5,000 per outgoing ACH. You’ll also be limited to transferring an aggregate monthly total of $20,000 via outgoing ACHs. As is with every other savings account, you’ll also be limited to making six withdrawals per monthly statement cycle. The good news (aside from the high APY) is that Vio Bank doesn’t charge a monthly maintenance fee. Vio Bank also has a mobile banking app where you can conveniently manage your accounts on-the-go. Also, its website is mobile friendly so it should be fairly easy to do your online banking from a smart phone, as well.

LEARN MORE Secured

on Vio Bank’s secure website

Member FDIC

6. High Rate: CIBC Bank USA – 2.20% APY, $1,000 to open

CIBC Palladian Savings Account from CIBC USACIBC Bank USA is the U.S. division of a Canadian based bank. This division was established in 1991 and has since acquired over $27 billion in assets. Currently, CIBC Bank USA is offering an online-only savings account with a competitive APY of 2.20%. You’ll only need $1,000 to open the account. While there isn’t a monthly maintenance fee, you may be charged $10 if you make more than six transactions per statement cycle. CBIC Bank USA does have a mobile banking app, but make sure that you download the app for the U.S., not Canada.

LEARN MORE Secured

on CIBC USA’s secure website

Member FDIC

7. High Rate: CIT – 2.30% APY, $100 to open

Savings Builder from CIT BankCIT is a very large bank that you probably never heard of. It has more than $50 billion of assets and makes loans (and leases) to middle market companies and small businesses. To fund those loans, CIT operates an internet-only bank that pays some of the highest interest rates in the country. While CIT isn’t as big as other online banks, they’re currently offering a very healthy APY of 2.30% on their Savings Builder account. You only need $100 to open the account, but you’ll need to meet one of two requirements to earn the high rate. We really like the options that CIT Bank has put in place to earn this high APY. The two ways to continue earning this high rate are:

  1. Make a monthly deposit of $100 or more into this account
  2. Maintain a daily balance of $25,000 or more

Even better: there aren’t any monthly maintenance fees and interest compounds daily. Deposits are FDIC insured.

LEARN MORE Secured

on CIT Bank’s secure website

Member FDIC

8. High Rate: HSBC Direct – 2.20% APY, $1 minimum to open, no minimum balance to earn APY

HSBC Direct Savings from HSBC DirectHSBC Direct is the online division of financial giant, HSBC Bank. Based on the amount of assets HSBC Bank has acquired to date, it is the 14th largest bank in the U.S. While HSBC Direct may sound like a new player to the online banking game, this division was actually around prior to the 2008 financial crisis and offered extremely competitive rates. After the financial crisis, the bank renamed the online division to HSBC Advance and slowly started to decrease its online savings account rates, much like other online banks were doing around that time.

Fortunately, HSBC has decided to reenter the online banking space. Since the initial launch in July of 2018, the bank has consistently increased its HSBC Direct Savings Account rate from 1.70% APY to 2.20% APY. You only need $1 to open the account and the APY will be applied to any balance below $2 million. You may fund the account via ACH transfer and the account can be opened online. You will have to deposit new money to the account, which means that you cannot be a member of the HSBC Group in the United States. The account doesn’t have a monthly maintenance fee and all deposits are FDIC insured.

LEARN MORE Secured

on HSBC Direct’s secure website

Member FDIC

9. High Rate: Citizens Access – 2.20% APY, $5,000 minimum balance amount

Online Savings Account from Citizens AccessCitizens Access is the online division of Citizens Bank. This division was recently created to provide the best savings rates to consumers. While the online division is brand new, the bank its backed by isn’t. Citizens Bank has been around for a while and has grown to have over $122 billion in assets. While you need to deposit and maintain a minimum balance of $5,000 to earn the 2.20% APY, you’ll be funding an account that comes with no fees. If your balance happens to fall below $5,000, the APY will drop to 0.25%. One downside to this online-only bank is that they don’t currently have a mobile banking app. This means that you’ll have to do all of your banking through their website. Luckily, their website is mobile-friendly.

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Member FDIC

10. Unique Bank + Highest Overall Rate: Fitness Bank – 3.00% APY, $100 minimum to open

Fitness Savings (12,500+ Steps) from FitnessBankFitness Bank is unique and new online bank. It’s a division of Affinity Bank, which has been around since 2002 and has acquired over $318 million in assets. Affinity Bank decided to launch a concept like no other to reward actively fit individuals with the highest APY currently available. While most institutions choose to offer tiered rates based on balance amounts, Fitness Bank offers tiered rates based on the average number of steps you take on a daily basis. To earn the high 3.00% APY, you’ll need to take an average of 12,500 steps or more per day. If you only take an average of 10,000 to 12,499 steps per day, you’ll earn an APY of 2.50% (which is still a great APY). You’ll earn 1.75% APY if you take an average of 7,500 to 9,999 steps per day. Taking an average of 5,000 to 7,499 steps per day will qualify you for an APY of 1.25%. Finally, if you take anywhere between 0 to 4,999 steps on average per day, you’ll only earn 0.50%.

Fitness Bank will track your steps by requiring you to download its Step Tracker app. The bank will then calculate your average steps from the previous month to determine which tier you qualify for. Once the bank determines which rate your activity qualifies you for, you will continue earning that rate for an entire month until the bank recalculates your activity. The activity requirement will be waived for the first month so that you can get your app all set up and start logging in some steps. For this first month, you’ll automatically earn the 3.00% APY.

In terms of actual money, you will need at least $100 to open the account and you’ll need to maintain this balance to waive the $10 monthly maintenance fee. The bank does impose a limit on the amount of money you’re able to transfer in and out of the account via ACH. You cannot transfer more than $15,000 per day in or out of the account. You also cannot exceed more than six certain withdrawals or you’ll incur an excessive withdrawal fee of $10 for each additional withdrawal. In addition to the Step Tracker app, Fitness Bank has a mobile banking app to manage your account.

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Member FDIC

11. High Rate: Popular Direct – 2.55% APY, $5,000 minimum to open

Popular Direct Ultimate Savings Account from Popular DirectPopular Direct, the online bank of Banco Popular North America, is currently offering an outstanding APY of 2.55% on their Popular Direct Ultimate Savings Account. You’ll need $5,000 to open this account and you’ll have to maintain a daily end of day balance of $500 to avoid the $4 monthly service fee. This account does not come with an ATM card. In order to access your money, you would need to transfer funds to and from an existing checking account via an ACH transfer, which can take a few days. Your deposits are FDIC insured. Popular Direct has a mobile banking app and provides account holders with access to online banking.

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Member FDIC

12. High Rate: BrioDirect – 2.46% APY, $25 minimum balance amount

High-Yield Savings from BrioDirectBrioDirect is powered by Sterling National Bank, which is a large bank in New York with over $29 billion in assets. This online brand recently launched with a high 2.46% APY. You only need $25 to open the account and you’ll need to maintain at least this amount on a daily basis to earn the APY. This account doesn’t have a monthly service fee and can be funded via ACH, wire transfer, or check. There are limitations to the amount of money you can transfer in and out via ACH. BrioDirect limits incoming ACH transfers to $500,000. The bank limits outgoing ACH transfers to $25,000 per transaction and a total of $125,000 per month. You are able to link as many external bank accounts as you’d like to this account. You can also initiate ACH deposits and withdrawals from other banks. You can manage this account online or from Sterling National Bank’s mobile app.

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FDIC Insured

13. High Rate: Betterment – up to 2.39% APY, $10 minimum to open

Betterment Everyday Savings - Promo Rate from BettermentBetterment is an investment company and one of the best robo-advisors. Since its creation, the mission of this company has always been to empower its customers to make the most of their money. With this mission in mind, the online brokerage decided to offer a high-yield savings account with an outstanding rate. While this account is not like your typical online savings account, it does come up with an outstanding rate – especially if you take advantage of the promotional rate. How is it different from other savings accounts? For one, Betterment is not a bank and is not FDIC insured. Fortunately, the company has partnered with a number of banks to offer FDIC insurance to accountholders. Essentially, your funds are deposited with the partner banks and will be insured up to $250,000 at each partner bank. One big benefit that Betterment is currently offering is the ability to opt out of depositing your money at a specific bank.

If you’re comfortable with the way this account is structured, you’ll be rewarded with an APY that is up to 2.39%. There is a catch, however, to earn the highest rate. In order to earn the 2.39% APY, you’ll need to join Betterment’s waiting list for the checking product. That’s it! Once you join the list, you’ll be awarded the 2.39% APY through the end of 2019 as long as you stay on the waiting list. If you choose to not join the waiting list, you’ll still earn a great APY of 0.25%. You only need $10 to open the account and there isn’t a minimum balance amount to earn the APY. One thing to note about the promotional and regular APYs – they are still variable rates. Betterment has the right to lower or raise the rates at any time. What Betterment is guaranteeing with the promotional rate is that it will always be 25 basis points above the regular APY. This guarantee will last for the remainder of 2019.

This account doesn’t come with any maintenance fees and you can transfer money from the Betterment Everyday Savings account as many times as you want. If you choose to withdraw money from this account, it’ll be transferred to your linked checking account within 1 to 2 business days. While these types of emerging cash management accounts may not be for everyone, we do feel like they deserve a place on this list due to their outstanding rates.

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FDIC Insured

14. High Rate: TAB Bank – 2.40% APY, $1 minimum balance amount

High Yield Savings from TAB BankTAB Bank was established in 1998 to offer businesses financial assistance. Since the bank opened its doors, it’s acquired over $715 million in assets. In September 2018, TAB Bank decided to launch a High Yield Savings account. While the bank originally launched the account with a 1.80% APY, it steadily rose its rate to 2.40% APY in January 2019. Today, TAB Bank has continued to offer the 2.40% APY. The bank doesn’t require a minimum amount to open the account, but you must maintain a daily balance of $1 to earn the APY. You can fund the account via ACH, wire transfer, or check. You’re able to manage the account online or via TAB Bank’s mobile app.

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Member FDIC

15. High Rates on two savings accounts: Customers Bank – 2.25% or 2.40% APY, $5,000 or $25,000 to open depending on account

High-Yield Savings Account from Customers BankCustomers Bank was established in 1997 and has grown to be known as a “super-community bank” in Pennsylvania, Washington D.C., Illinois, New York, New Jersey, and New England. The bank has over $9 billion in assets, making it a mid-sized bank. Currently, Customers Bank is offering two outstanding rates on two different accounts. Its Digital Savings Account requires a minimum deposit and balance of $5,000 to earn a high rate of 2.25%. This account doesn’t have any monthly fees. You can open this account here.

If you have $25,000 to deposit, the High-Yield Savings Account is a better fit for you. If you can deposit and maintain a minimum of $25,000 into the account, this bank will reward you with a 2.40% APY. You’ll have to maintain this balance to continue earning the high rate. You must fund the account within 30 days of receiving application approval. This account doesn’t come with any monthly fees.

A few items to be aware of: these accounts don’t come with checks or a debit card. Customers Bank does have ACH transfer limitations of $5,000 per day and $50,000 per statement cycle. You can easily open these accounts online and manage the account via Customer Bank’s website or mobile banking app. Deposits are FDIC-insured.

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on Customers Bank’s secure website

Member FDIC

16. High Rate: MySavingsDirect – 2.40% APY, $1 minimum to open

MySavings Account from MySavingsDirectMySavingsDirect is a division of Emigrant Bank, which is a large bank in New York with over $5 billion in assets. MySavingsDirect is offering a 2.40% APY with a $1 minimum deposit. In the past, Emigrant liked to play games with rates, but we’ve noticed that MySavingsDirect’s rate has been consistent throughout this year. The account can be funded via ACH and MySavingsDirect will only accept a check for your initial deposit. The online experience is dated and the bank doesn’t have a banking app.

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Member FDIC

17. High Rate: Citi – 2.36% APY*, no minimum opening deposit

Citi Accelerate Savings from CitiCiti has never been known to offer the best savings account rates, but this big bank has decided to change that (for certain people). If you live in AL, AK, AZ, AR, CO, DE, GA, HI, ID, IN, IA, KS, KY, LA, OK, ME, MA, MI, MN, MO, MS, MT, NE, NH, NM, NC, ND, OH, OR, PA, RI, SC, SD, TN, UT, VT, WA, WV, WI or WY, you’re eligible to open Citi’s Accelerate Savings account. This account is currently offering a 2.36% APY and doesn’t require a minimum opening deposit amount. While there isn’t a minimum deposit to open or balance to earn the APY, you will have to maintain an average of at least $500 on a monthly basis to waive to the $4.50 monthly service fee. If you choose to open this account, you’ll be opening it under Citi’s Access Account Package. This package doesn’t have any overdraft fees, but it also doesn’t have any paper checks. There are also additional requirements for the Access Account Package that you’ll need to meet in order to waive the $10 monthly fee: you’ll need to either make one qualifying direct deposit or qualifying bill payment per statement period or maintain a combined average monthly balance of at least $1,500 in eligible linked accounts (the Accelerate Savings account counts as an eligible linked account). If you live in one of the eligible states, we believe that this account is a great option as it’s rare to find a large, trusted bank offering a high rate on a savings account that’s linked to a free checking account.

*Note: If you live in California, Connecticut, Florida, Illinois, Maryland, Nevada, New Jersey, New York, Texas, or Virginia, you will not be eligible for this offer.

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Member FDIC

18. High Rate: Salem Five Direct – 2.20% APY, $100 to open – Be aware of transfer limitations

eOne Savings from Salem Five DirectSalem Five Direct is the online bank division of Salem Five Cents Savings Bank, a community bank based in Salem, Massachusetts. Salem has been around for more than 150 years and all deposits are insured by the FDIC up to the legal limit. You only need $100 to open this account, and there are no monthly maintenance fees. However, they do have a few limitations to be aware of. First, according to their online banking agreement, Salem Five Direct limits the dollar amount of their External Transfers to $5,000 per transaction, $5,000 in aggregate per day, and $20,000 in aggregate per month. So, if you decide to have more than one account with them, like their money market account, they’ll look at the aggregate amount of External Transfers conducted from both the savings account and money market account. Second, account holders are limited to six withdrawals per statement cycle due to Federal Regulations. If you exceed the six withdrawal limit, they’ll charge you $10 per additional transaction. Finally, the web and mobile experiences are not great. But, if you give them a call (which we have done), you will get friendly service from a community bank. While this bank does offer one of the best rates for an online savings account, we want you to be aware of their limitations.

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Member FDIC

19. High Rate: Ally Bank – 1.90% APY, no minimum balance and you can get a free checking account

Online Savings Account from Ally BankAlly is a bank without branches that had been consistently paying high interest rates on savings accounts. While Ally is still offering rates way above what brick-and-mortar banks are offering, it seems this online bank no longer wants to be seen as the online bank with the most competitive rates. The current APY on Ally’s savings account is 1.90%. Although Ally has dropped its rate significantly, we still favor this online bank. It doesn’t require a minimum balance to earn the APY and, even better, you can open a free checking account (also with no minimum balance requirement and eligible for the 1% cash back offer). This makes access to your savings account incredibly easy – because you can transfer funds online (or via the app) and have immediate access via checks, debit cards and ATMs. With an Ally account, you will have access to their full suite of expanding (and market-leading) products such as CDs, money market account, checking account, and IRA accounts.

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Member FDIC

20. Runner-Up: For Small Balance Savers Digital Federal Credit Union – 6.17% APY up to $1k

Primary Savings from Digital Federal Credit Union (DCU)Digital Federal Credit Union (DCU) currently offers a nice account for people who are just starting to save. You can earn an APY of 6.17% with their Primary Savings Account. You will only earn that rate on deposits up to $1,000. Once you have more than $1k, you should consider other accounts on this list. It is a credit union – and your deposits are insured by the NCUA up to the legal limit. Anyone can join the credit union by donating to one of their participating organizations such as Reach Out for Schools, which has a membership fee of $10. You’ll be able to join one their participating organizations when you go to open your account with DCU. DCU is also part of a nationwide CO-OP network that allows their members to have access to shared branches and surcharge-free ATMs throughout the U.S.

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NCUA Insured

How to find the right savings account for you

  • Focus on rates, but don’t forget about fees. Snagging the highest interest rate isn’t always your best bet. You also want to ensure the whole account helps you earn consistent returns. For example, a high-rate online savings account might reset to a lower APY after an introductory period. Perhaps the best rate requires a balance that’s too high or too low for your needs. And watch out for monthly fees that could eat into your savings.
  • Compare, compare, compare. Use our savings account comparison tool to calculate how much you could earn with different accounts. You can filter by ZIP code and size, which can help large-balance savers find better options than no-minimum options.
  • Carefully consider CDs. CDs allow savers to earn more on their savings by agreeing to lock up their funds for a set period of time. With CDs, you make your initial deposit at a set APY and wait for the CD term to mature. With most CDs, you can’t touch the original deposit amount before maturity without paying a penalty. Since CDs are less liquid than a standard savings account, they’re good for setting aside money you won’t need to access in the near term. Typically, we recommend using CDs for long-term goals, like accumulating a down payment for a home.

How the Fed impacts online savings rates

The interest rates offered by banks are tied to the federal funds rate, which is set by the Federal Reserve’s Federal Open Market Committee (FOMC). This includes the deposit account rates that grow your money in savings and other deposit accounts. When the federal funds rate rises, you might see that reflected in the deposit interest rates at most banks.

As the Fed hiked rates over recent years, online banks were far quicker to raise their rates in turn than traditional banks. Just look at the average APY offered by big banks — 0.26% vs. 1.52% on average for online banks as of December 2018.

We’ve enjoyed successive Fed rate hikes for the last few years, but the trend is waning. As we continue into 2019, the odds of a rate hike this year have reached zero. The Fed did nothing at its January meeting, and didn’t raise rates at the March meeting either.

The bleak federal funds rate outlook doesn’t necessarily mean that banks will start slashing their own deposit account rates. Online banks are extremely competitive and need to remain so if they want to maintain their edge.

In the January Goldman Sachs earnings call, Goldman Sachs Executive Vice President and CFO Stephen M. Scherr noted it has no plans to walk back on rates for its online savings account Marcus, aiming to keep its rank among the top savings rates in the country.

We heard much of the same from fellow online bank Ally Bank, whose CFO Jennifer LaClair said during its January earnings call that it’s still important to take the “competitive landscape” into account.

Still, other earnings calls indicated that banks are in as much of a holding pattern as consumers are. When asked about the bank’s deposit rate outlook in the event of a Fed rate slowdown, Bank of America CFO Paul Donofrio noted, “At some point, the broader retail rates will rise. We just don’t know when. So, I think we’re just going to have to wait and see.”

As for what that all means to you, chances are that if you keep your deposits with an online bank, you’ll still get the most competitive rates regardless of a Fed pause or rate decrease. You might see an overall decrease in online savings rates (moreso in the competitive rate-chasing CD space), but they’ll still outperform most brick-and-mortar rates any day.

The bottom line

So what’s a saver to do? At the end of the day, you want the account that makes the most sense for you. Choose the one that lets you save and manage your money in the best ways possible. The most efficient way to consistently grow your money is to open an online savings account. These accounts will offer the best interest rates compared to brick-and-mortar banks, no matter where the federal funds rate goes this year — plus, they’re easily accessible in case of emergency. If you don’t need immediate access to your money and you have some extra cash lying around, open a high-yield CD as a more long-term savings alternative.

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LaTisha Styles
LaTisha Styles |

LaTisha Styles is a writer at MagnifyMoney. You can email LaTisha at [email protected]

Lauren Perez
Lauren Perez |

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

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Earning Interest

The Best CD Rates – August 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

The Best CD Rates
iStock.

Updated August 9, 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 a minimum deposit of $1,000. 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

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 with consistently competitive CD rates:

3 months – 5 years: Ally Bank – 0.75% APY – 2.60% APY; $0 minimum deposit to open (higher APY with higher deposit)
Ally Bank

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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 2.60% 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:
  • 2.35% APY (less than $5k)
  • 2.45% APY ($5k minimum deposit)
  • 2.50% 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:
  • 2.35% APY (less than $5k)
  • 2.45% APY ($5k minimum deposit)
  • 2.50% 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:
  • 2.60% APY (less than $5k)
  • 2.60% APY ($5k minimum deposit)
  • 2.60% APY ($25k minimum deposit)
12-months:
  • 2.40% APY (less than $5k)
  • 2.40% APY ($5k minimum deposit)
  • 2.40% APY ($25k minimum deposit)
6 months – 6 years: Goldman Sachs Bank USA – 0.60% APY – 2.65% APY; $500 minimum deposit to open
Goldman Sachs Bank USA

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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-months2.40%
18-months2.40%
2-year2.45%
3-year2.50%
5-year2.60%
6-year2.65%
12 months – 3 years: BBVA – 2.50% APY* – 1.90% APY; $500 minimum deposit to open
BBVA

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BBVA has been around since 1964. This bank had humble beginnings in Birmingham, Alabama as Central Bank & Trust Company. This small community bank went through several name changes and pioneered several banking initiatives in Alabama (including opening on a Saturday and introducing the first ATM and debit card in the state). In the early 90s, the bank changed its name to Compass Bancshares. In 2007, it had its biggest change to date. The bank was acquired by a Spanish company (Banco Bilbao Vizcaya Argentaria) and renamed BBVA Compass. Recently, BBVA dropped the Compass and is now just called BBVA. Through all these changes, BBVA has grown to acquire over $92 billion in assets.

While this, now, giant bank has not historically offered competitive rates on its deposit accounts, it’s begun competing in the online space by offering online-only CDs with decent rates. Currently, BBVA is offering a competitive 2.50% on its 12 Month Online CD*. The bank does mention that this CD available for a limited time, so you may want to lock in your money in this CD sooner rather than later. You’ll need a minimum of $500 to open the CD. The early withdrawal penalty on this CD is pretty unique. It’s $25 plus 1% of the amount withdrawn. While BBVA does have other CD terms, this CD currently has the best rate.

*Note: This rate is only available to individuals who live in certain states. If you live in Alabama, Arizona, California, Colorado, Florida, New Mexico, or Texas, you will not qualify for this rate. Instead, you’ll qualify for a 2.00% APY.

CD TermAPY
12-months2.50%*
15-months2.00%
18-months1.90%
3-years1.90%
3 months – 10 years: Discover Bank – 0.35% APY – 2.70% APY, $2,500 minimum deposit to open
Discover Bank

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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-months2.40%
18-months2.40%
2-year2.45%
30-months2.45%
3-year2.45%
4-year2.45%
5-year2.50%
7-year2.60%
10-year2.70%
1 Year – 3 Years: Rising Bank – 2.40% APY – 2.50% APY; $1,000 minimum deposit to open
Rising Bank

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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 2.40% 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-year2.40%
2-year2.45%
3-year2.50%
3 months – 5 years: Synchrony Bank – 0.75% APY – 2.60% APY; $2,000 minimum deposit to open
Synchrony Bank

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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-months0.75%
6-months1.00%
9-months1.25%
12-months2.40%
15-months2.85%
18-months2.50%
24-months2.50%
36-months2.55%
48-months2.55%
60-months2.60%
1 year – 5 years: Barclays Bank – 2.40% – 2.60% APY, no minimum deposit to open
Barclays

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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-year2.40%
2-year2.45%
3-year2.50%
4-year2.55%
5-year2.60%
3 Months – 5 Years: Nationwide by Axos Bank – 0.75% APY – 2.56% APY; $500 minimum deposit to open
Nationwide by Axos Bank

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Nationwide is most commonly known for its insurance products. However, in 1998, Nationwide registered with the FDIC as Nationwide Trust Company, FSB. In 2006, the company changed its banking name to Nationwide Bank. In 2018, Nationwide Bank reverted to Nationwide Trust Company, FSB after Axos Bank acquired the deposits business. Now, with Axos Bank powering the banking services, this brand is able to offer top of the line products to banking customers. Currently, Nationwide by Axos Bank is offering a pretty strong APY on its 12-month CD. Especially when you compare the rate against some of the top online banks. This CD does come with an early withdrawal penalty that is equal to six-months’ worth of interest. The bank has decided to focus on offering top rates on 12, 18, and 24-month CDs. See the full list of CD rates below:

CD TermAPY
3-months0.75%
6-months1.55%
9-months1.55%
12-months2.20%
18-months2.30%
24-months2.40%
36-months2.45%
48-months2.50%
60-months2.56%

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:

6 months: Investors eAccess – 2.15% APY; $500 minimum deposit to open
Investors eAccess

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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 2.15% 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-month2.15%$500
7 months – 13 months: Goldman Sachs Bank USA – 2.25% APY – 2.15% APY; $500 minimum deposit to open
Goldman Sachs Bank USA

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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-month2.20%
$500
13-month2.15%
$500
11 months: Ally Bank – 1.80% APY – 2.20% APY; $0 – $25,000 minimum deposit to earn APY
Ally Bank

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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 (2.40% 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 months2.05%$5,000
11 months2.20%$25,000
11 months – 14 months: PurePoint Financial – 1.65% APY – 2.00% APY; $10,000 minimum deposit to open
PurePoint Financial

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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 2.00% 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-month1.65%$10,000
13-month2.00%$10,000
14-month1.75%$10,000

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 Credit Union: State Department Federal Credit Union – 2.52% APY, $500 minimum deposit
24 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’ll be able to open the 12 Month Certificate with a minimum of $500 and start earning 2.52% APY. If you need to withdraw money from this CD early, you may be charged a penalty that is worth 180 days of interest.


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Best 1-year CD rate from a National Bank: ableBanking – 2.30% APY, $1,000 minimum deposit
1 Year CD from ableBanking

ableBanking is an online bank with competitive rates. It is a division of Northeast Bank, which is based in Maine. Together, the banks have acquired over $1 billion in assets. If you have at least $1,000, you can open ableBanking’s 1-year CD that currently has an APY of 2.30%. If you need to withdraw your money before the CD’s maturity date, you’ll incur an early withdrawal penalty of 90 days’ worth of interest.


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Member FDIC

Best 2-year CD rates

Best 2-year CD rate from a National Bank: Georgia Banking Company – 2.60% APY, $500 minimum deposit
2 Year Certificate from Georgia Banking Company

Georgia 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 2-year Certificate and start earning 2.60% APY with at least $500. This term has an early withdrawal penalty that is worth 180 days of interest.


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Member FDIC

Best 2-year CD rate from a Credit Union: MAC Federal Credit Union – 2.80% APY, $1,000 minimum deposit
24 Month CD 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 2.80% APY. This CD has an early withdrawal penalty that is equal to 90 days of interest.


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on MAC Federal Credit Union’s secure website

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Best 3-year CD rates

Best 3-year CD rate from a Credit Union: Mac Federal Credit Union – 3.00% APY, $1,000 minimum deposit
36 Month CD from MAC Federal Credit Union

MAC Federal Credit Union is also offering a competitive rate on its 36-month CD. With a minimum deposit of $1,000 and begin earning 3.00% APY. This credit union does not disclose its early withdrawal penalty. While this credit union currently has the best 3-year CD rate, becoming a member and opening an account doesn’t seem to be as simple as it is at other institutions. You’ll need to fill out a contact form and wait for someone from the credit union to reach out to you. If depositing your money into a 3-year CD with the highest rate is all you care about, then it may be worth going through this credit union’s process. If ease of access is more important to you, then you may want to consider another option for a 3-year CD.


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Best 3-year CD rate from a National Bank: Georgia Banking Company – 2.65% APY, $500 minimum deposit
3 Year Certificate from Georgia Banking Company

Georgia Banking Company makes our list of best CD rates again with its 3-year Certificate. With a minimum deposit of $500, you’ll be able to open this CD and start earning the 2.65% APY. The early withdrawal penalty on this term is worth 180 days of interest.


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on Georgia Banking Company’s secure website

Member FDIC

Best 4-year CD rates

Best 4-year CD rate from a Credit Union: Hanscom Credit Union – 2.85% APY, $1,000 minimum deposit
48 Month CD from Hanscom Federal Credit Union

Hanscom Federal Credit Union was established in 1953 and has acquired over $1 billion. To become a member of this credit union, you can qualify through employment, military status, family relations, or by being a member or becoming a member of one of the credit union’s sponsoring member organizations. Once you become a member of Hanscom Federal Credit Union, you’ll be able to open its 48-month CD. You’ll need to deposit a minimum of $1,000 to earn the 3.10% APY. The early withdrawal penalty for this term is equal to 180 days dividends on the withdrawn amount.


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Best 4-year CD rate from a National Bank: Georgia Banking Company – 2.70% APY, $500 minimum deposit
4 Year Certificate from Georgia Banking Company

Georgia Banking Company is also offering the best CD rate on a 4-year CD. With a minimum deposit of $500, you can earn 2.70% APY. This is definitely worth it if you’re okay with locking your money away for four years and don’t want to deal with the field of membership required by credit unions. This CD does have an early withdrawal penalty that is equal to 180 days of interest.


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on Georgia Banking Company’s secure website

Member FDIC

Best 5-year CD rates

Best 5-year CD rate from a Credit Union: State Department Federal Credit Union – 2.98% APY, $500 minimum deposit
60 Month Certificate from State Department Federal Credit Union

In addition to offering a high rate on a 1-year CD, State Department Federal Credit Union is also offering one of the best rates on a 5-year CD. You’ll need a minimum of $500 to open the account once you become a member and start earning the 2.98% APY. The early withdrawal penalty on this term is worth 360 days of interest.


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Best 5-year CD rate from a National Bank: Home Loan Investment Bank, F.S.B. – 2.60% APY, $2,500 minimum deposit
5 Year e-CD from Home Loan Investment Bank, F.S.B.

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. Home Loan Investment Bank, F.S.B. is offering a high APY of 2.60% 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.


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Member FDIC

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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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