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The Best High-Yield Online Savings Accounts in March 2020

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Start saving today with these high-yield bank accounts

Updated March 27, 2020

The best online savings accounts provide consumers with interest rates that are, on average, 1.47 percentage points higher than the rates offered by traditional brick-and-mortar banks as of March 2020. Every week, MagnifyMoney’s elite team of financial analysts reviews and compiles the best savings account offers from dozens of online banks.

If you’re still skeptical about switching to an online bank, consider the facts:

  • Online savings accounts offer higher rates, and you often end up saving on the cost of the account. With lower overhead costs, online banks typically charge lower fees.
  • Your funds are just as safe stashed with an FDIC-insured online bank as they would be with the bank branch on Main Street.
  • Many online banks offer round-the-clock customer support and online chat features that make it easy to resolve issues 24/7, without ever needing to visit a branch.

Our weekly picks of the best online savings accounts with high yield rates are featured below:

1. High Rate: American Express National Bank – 1.70% 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 1.70% variable Annual Percentage Yield (APY) as of 3/25/2020. 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.

SEE DETAILS Secured

on American Express National Bank’s secure website

Partner Offer

Member FDIC

2. High Rate: Goldman Sachs Bank USA –  1.70% 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 1.70% 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 1.70% 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.

Marcus is accessible both online and via the Marcus mobile app, available only in the Apple App Store.

SEE DETAILS Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

3. High Rate: Barclays Bank – 1.60% 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 1.60% 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.

SEE DETAILS Secured

on Barclays’s secure website

Member FDIC

4. Favorite Online Package: Ally Bank – 1.50% 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 1.50%. 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). 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.

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

5. High Rate: Capital One – 1.50% APY, no minimum balance

360 Performance Savings from Capital OneA consistent rate leader for its deposit accounts, Capital One now offers its 360 Performance Savings. With a 1.50% APY on all balances and no monthly fee, you get a chance to boost your savings uninterrupted. There are no minimum balances required to open or maintain the account, either.

Capital One is able to offer higher rates and lower (to no!) fees on this online savings account compared to traditional in-branch offerings. Still, you can head to a Capital One branch or Capital One Café to open a new 360 Performance Savings account, if you prefer. You cannot use an ATM to withdraw or deposit funds, but you can visit a branch, call the bank or make your own online transfer. You can access all accounts on your mobile device through the Capital One app, as well.

SEE DETAILS 

Member FDIC

6. High Rate: Discover Bank – 1.50% APY, no minimum balance

Online Savings from Discover Bank Discover Bank is famous for its credit cards. But it also has an online consumer bank. The savings account pays 1.50% APY. There is no minimum deposit or balance requirement, opening this savings opportunity to all kinds of savers. Discover doesn’t charge a monthly fee, either, nor an excessive transaction fee.
Discover provides customers with on-the-go access through its mobile app, which includes mobile check deposit.

SEE DETAILS 

Member FDIC

7. High Rate: Vio Bank – 1.75% 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 its High Yield Online Savings account with a strong APY (at the time of its launch) and has been consistently competitive since it launched. It’s currently offering an outstanding 1.75% 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. We think this online bank is very promising and hope it continues to offer one of the best savings account rates in the nation.

SEE DETAILS Secured

on Vio Bank’s secure website

Member FDIC

8. High Rate: Live Oak Bank – 1.75% APY, no minimum to open, no minimum balance to earn APY

High Yield Online Savings from Live Oak BankFounded in 2008, Live Oak Bank offers a great spread of financial products, including its high-yield Online Savings account. The Online Savings account earns 1.85% APY on all balances. Plus, interest is compounded daily for faster savings. There’ s no minimum deposit requirement to open, either, nor a monthly fee to worry about.
In addition to online access, Live Oak Bank offers a mobile app.

SEE DETAILS Secured

on Live Oak Bank’s secure website

Member FDIC

9. High Rate: CIT Bank – 1.75% 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 1.75% 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.

SEE DETAILS Secured

on CIT Bank’s secure website

Member FDIC

10. High Rate: Citizens Access – 1.70% 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 1.70% 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.

SEE DETAILS Secured

on Citizens Access’s secure website

Member FDIC

11. High Rate: Synchrony Bank – 1.50% APY, no minimum balance, (and ATM access)

High Yield Savings from Synchrony BankSynchrony Bank pays a healthy 1.50% 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.

SEE DETAILS 

Member FDIC

12. High Rate: CIBC Bank USA – 1.45% APY, $1,000 to open

CIBC Agility Savings - Online Only 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 Agility Savings account with a competitive APY of 1.45%. 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. CIBC Bank USA does have a mobile banking app, but make sure that you download the app for the U.S., not Canada.

SEE DETAILS Secured

on CIBC USA’s secure website

Member FDIC

13. Unique Bank + Highest Overall Rate: Fitness Bank – 2.10% 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 2.10% 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 2.00% (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 2.10% 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.

SEE DETAILS Secured

on FitnessBank’s secure website

Member FDIC

14. High Rate: First Foundation Bank – 1.75% APY, $1,000 to open

Online Savings Account - New Money Only from First Foundation BankFirst Foundation Bank officially launched in 2008, but its leadership has been in the financial services industry since 1990. This bank was established by the same group that leads the Keller Group, a wealth management firm. The bank has grown to acquire over $6 billion in assets. In October, this bank launched an Online Savings Account with a high APY of 1.75%. You’ll need to have a balance of at least $1,000 in order to open that account and you’ll need to maintain that amount in order to earn the high APY. If your balance falls below $1,000, the APY will drop to 0.10%. This account doesn’t have a monthly service fee.

While Regulation D applies to this account, First Foundation Bank will provide an ATM card if you request one from the bank. The bank will reimburse ATM fees from other banks and ATM operators up to $20. There is a limit to the amount of money that you can withdraw. If you’re withdrawing from an ATM, the bank sets a daily limit of $500. The daily point-of-sale limit is $1,500. If you’re transferring money online or via ACH, the daily limit is $5,000 and the monthly limit is $10,000. If you need to transfer more than the preset limits, you’re able to call the bank and request that they increase the limit. The bank allows you to maintain the account online and through their mobile banking app.

SEE DETAILS Secured

on First Foundation Bank’s secure website

Member FDIC

15. High Rate: Prime Alliance Bank – 1.96% APY, $10,000 minimum balance amount

Personal Savings Account from Prime Alliance BankPrime Alliance Bank was established in 2004 to provide financial assistance to local businesses and residents. However, through its online banking platform, it’s now able to reach more customers while keeping that local bank service. Today, it’s grown to acquire over $455 million in assets.

While the bank’s Personal Savings Account doesn’t require a minimum amount to open the account, you will need to have at least $10,000 in the account to earn the high APY of 1.96%. If your balance is below the amount, you’ll earn 1.86% APY. This account doesn’t have a monthly service fee. You’re able to request an ATM card and withdraw as much as you need from an ATM, but the account is limited to six certain withdrawals and transfers due to federal regulations. You’re able to maintain the account online or through the bank’s mobile app.

SEE DETAILS Secured

on Prime Alliance Bank’s secure website

Member FDIC

16. High Rates on two savings accounts: CommunityWide FCU – 2.00% APY or 1.90% APY, $1 minimum to open

High Rate - quarterly withdrawals only from Communitywide Federal Credit UnionCommunityWide Federal Credit Union was established in 1967. Anyone can become a member of this credit union by joining Habitat for Humanity Helpers, Marine Corps. League of St. Joseph Valley, or Michiana Goodwill Boosters. You may also qualify through your employer or a relative who’s an existing member.

Once you become a member of CommunityWide FCU, you’ll be able to open one of two unique savings accounts: High Rate Account and Funds Account. These accounts act like a hybrid between a savings account and a CD since the credit union only allows you to withdraw from these accounts during a specific time period.

The High Rate Account currently earns 2.00% APY. You only need $1 to open the account and earn the APY. While you can deposit money into the account anytime, you’ll only be able to withdraw from the account within the first five (5) days of each quarter. If you withdraw money outside of this window, you’ll incur a withdrawal penalty that is equal to 30 days dividends.

If withdrawing money once a quarter isn’t feasible for you, you can open the Funds Account instead. This account allows you to withdraw money within the first five (5) days of each month. The minimum to open and earn the APY is still $1, but the APY drops to 1.90%. If you withdraw money from this account early, you’ll incur a penalty that is equal to 7 days dividends. These accounts are unique as they really help you save money while still giving you flexibility to withdraw within a certain timeframe.

SEE DETAILS Secured

on Communitywide Federal Credit Union’s secure website

NCUA Insured

17. High Rate: SFGI Direct – 1.71% APY, $500 to open

SFGI Direct Savings Account from SFGI DirectSFGI Direct is Summit Community Bank’s online division. They currently have more than $2 billion of assets and is privately owned by Summit Financial Group, Inc. SFGI is FDIC insured through Summit Community Bank, so deposits are protected up to the legal limit. They are currently offering a good rate of 1.71% on balances of $1 or greater. You’ll have to deposit a minimum of $500 in order to open the account, but you can’t make an initial deposit greater than $25,000. After you make your initial deposit, you’re able to add as much money as you’d like to the account. While they do offer a good rate on an online savings account, their online experience is lacking. Their website feels dated and they don’t appear to have a mobile banking app.

SEE DETAILS 

Member FDIC

18. High Rate: HSBC Direct – 1.70% 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 1.70% 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.

SEE DETAILS Secured

on HSBC Direct’s secure website

Member FDIC

19. High Rate: Popular Direct – 1.70% 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 1.70% 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.

SEE DETAILS Secured

on Popular Direct’s secure website

Member FDIC

20. 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.

SEE DETAILS 

NCUA Insured

MagnifyMoney’s Best Savings Accounts for March 2020

To recap, here are our top picks of the Best Savings Accounts for March 2020.

The Best Savings Accounts in March 2020 Overall

Institution

APY

Bank Review

American Express National Bank Personal Savings


1.70% APY

American Express Review

Goldman Sachs Bank USA High Yield Online Savings

1.70% APY

Goldman Sachs Bank USA Review

Barclays Bank Online Savings Account

1.60% APY

Barclays Bank Review

Ally Bank Online Savings Account

1.50% APY

Ally Bank Review

Capital One 360 Performance Savings

1.50% APY

Capital One 360 Review

Discover Bank Online Savings




1.50% APY




Discover Bank Review

The Best Online Savings Accounts in March 2020

Institution

APY

Bank Review

Vio Bank High Yield Online Savings Account

1.75% APY




Vio Bank Review

Live Oak Bank Savings Account

1.75% APY

Live Oak Bank Review

CIT Bank Savings Builder

1.75% APY

CIT Bank Review

Citizens Access Online Savings Account

1.70% APY

Citizens Access Review

Synchrony High Yield Savings

1.50%APY

Synchrony Review

CIBC Bank USA Agility Savings

1.45%APY

CIBC Bank USA Review

The Best High-Yield Savings Accounts and Rates in March 2020

Institution

APY

Bank Review

Fitness Bank Savings

2.10% APY

Fitness Bank Review

First Foundation Bank Online Savings Account

1.75% APY

First Foundation Bank Review

Prime Alliance Bank Personal Savings Account

1.96% APY

Prime Alliance Bank Review

CommunityWide FCU High Rate and Funds Accounts

2.00% APY and 1.90% APY

CommunityWide FCU Review

SFGI Direct Savings Account

1.71%APY

SFGI Direct Review

HSBC Direct Savings

1.70% APY

HSBC Direct Review

Popular Direct Ultimate Savings Account

1.70% APY

Popular Direct Review

What should I know about savings accounts?

What is a savings account?

The definition of a savings account is a deposit account that earns interest and allows six “convenient” withdrawals per statement cycle. This limit applies to telephonic transfers, preauthorized and automatic transfers and withdrawals and transfers made by check, debit card or another similar method. Savings accounts are offered by traditional brick-and-mortar banks, online banks, credit unions and other financial institutions.

Deposits held in savings accounts at banks are typically insured by the Federal Deposit Insurance Corporation (FDIC), while credit union deposits are insured by the National Credit Union Administration (NCUA). When looking for the best savings account, always choose an institution insured by either the FDIC or the NCUA. This protects your savings account with the backing of the U.S. Federal Government in the event that your bank fails.

How do savings accounts work?

Savings accounts are interest-bearing deposit accounts that hold your money safely and securely with a financial institution. They are liquid, meaning you can withdraw your money at any time you choose. However, due to the limitations of the Federal Reserve’s Regulation D, savings accounts only allow six convenient transfers and withdrawals per statement cycle. Exceeding this limit will typically result in a fee for each additional transaction.

While almost all savings accounts earn interest, the earnings may vary depending on what type of bank you choose. Historically, we’ve seen online savings accounts out-yield traditional brick-and-mortar banks.

When should I use a savings account?

Savings accounts are most often used for general savings, and they’re a much better choice than keeping all of your money in a checking account. A high-yield savings account lets your money grow by earning a strong interest rate. Still, it’s always best to keep a financial cushion in your checking account, to cover expenses and avoid overdrafts.

You can use a savings account to house your emergency fund as well as any cash you don’t need to cover your monthly spending habits. Savings accounts are highly liquid and easy to access when you need them — certificates of deposit (CDs) and investment accounts are much less liquid — but still earns more interest than regular checking accounts.
Separate savings accounts are a great way to meet multiple financial goals. For example, you could save funds for future college tuition costs in one high-yield savings account, and money for your next vacation in a separate online savings account.

How to find the right savings account for you

Compare offers to get the best savings rate. 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.

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 options beyond banks. It’s easy to keep a savings account with the bank your family has banked with for generations. But you could be missing out on incredible savings by ignoring online banks and even credit unions. Online banks traditionally offer substantially higher savings account rates than brick-and-mortar banks. They’re easier on fees, too. For their part, credit unions can also be competitive rate leaders, especially for CDs.

What are the different types of savings accounts?

Financial institutions offer a few different varieties of savings accounts. For instance, a money market account is technically a type of savings account under Regulation D, but it’s often marketed under its own name.

Certain labels are applied to savings accounts to differentiate features or ownership types. For example, an online savings account is just a standard savings account that’s available online. Likewise, a high-yield savings account is simply a standard savings account that earns a high interest rate.

Differences in account ownership do not change the way savings accounts function — withdrawal limits and interest rates remain the same. That said, there are a few details worth highlighting when it comes to savings account ownership types:

  • Individual savings account: This is a savings account for one person. No one else can access funds saved in the account unless the savings account holder authorizes it.
  • Joint savings account: With a joint savings account, two or more people share equal access to funds saved in the account.
  • Custodial account: These accounts let a designated custodian manage funds for the benefit of a minor, who then assumes ownership of the account when they turn 18 or 21 years old, depending on the state. Common custodial accounts are associated with UGMA (Uniform Gift to Minors Act) and UTMA (Uniform Transfer to Minors Act) agreements.
  • Payable on Death (POD) account: This type lets the account owner choose beneficiaries who inherit the funds saved in the account after the owner passes away.

Determining which is the best savings account for you can be a difficult decision and will depend on your individual needs. However, there’s no real limit to the number of savings accounts that you can open; take some time to shop around to find a savings account that combines the highest rates, greatest convenience and still fits your unique needs.

Should I get an online savings account?

An online savings account is your best bet for obtaining the highest interest rate available. Online banks lack the costs associated with maintaining brick-and-mortar branches, and they generally pass the savings onto you in the form of better interest payouts. And like we’ve said, if your money is going to sit in an account, you might as well make it worth your while by growing it at a competitive rate.

Online savings accounts generally feature superior accessibility. Online banks are laser focused on offering the best possible and most user-friendly app experiences. There’s often 24/7 customer service, and they tend to provide very good ATM access. When shopping for the best savings account to suit your needs, make sure you include a good mix of online banks offering high yields, brick-and-mortar banks and credit unions in your search.

Can savings accounts lose money?

If your account balance remains below the FDIC or NCUA deposit insurance threshold, there is virtually no way to lose money kept in a savings account. Federal deposit insurance guarantees that you will not lose money — up to the legal limit — in the event of bank or credit union failure. If your bank or credit union were to fail, federal deposit insurance guarantees that you get your money back, either in the form of a check or a new account at another insured bank.

You can, however, lose money to fees if you’re not careful. Many savings accounts, especially at traditional brick-and-mortar banks, charge a monthly fee that can dent your savings just for owning the account. For those looking to avoid fees, we’ve found that many online savings accounts have reduced or eliminated their fees entirely.

Do savings account interest rates change?

Savings account interest rates are variable, meaning they can change at the discretion of the institution offering them. This is in contrast to fixed-rate savings vehicles, like CDs, which have set rates for predetermined periods of time.

Institutions tend to reserve the right to change their rates at any time, without warning. Luckily, there are institutions that notify you of upcoming changes, especially if it’s a substantial rate change. Each institution’s level of transparency and communication is something to consider when shopping around for the best savings account.

What impacts savings rates?

Institutions typically alter their rates in response to changes in market interest rates, which are in turn driven by the federal funds rate set by the Federal Reserve. The federal funds rate influences the rates banks lend money to each other. When the Fed increases the federal funds rate, financial institutions respond by increasing the interest rates they offer on deposit accounts. When the federal funds rate falls, interest rates decrease.

If you’re not keen on tracking the federal funds rate, changes to the APY on your savings account may come as a surprise. Luckily, 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. Online savings accounts outperform most brick-and-mortar rates any day.

What are the typical fees associated with savings accounts?

The main fee you should look out for when shopping for any bank account is the pesky monthly service fee. These fees are charged for simply owning an account, and can range from as little as $5 to as much as $25, depending on the institution and the account. Luckily, the industry-leading best online savings accounts are free of monthly service fees.

Another common fee associated with savings accounts is the excessive transaction fee. This fee is charged each time you go over the legal limit of six transfers per statement cycle, and usually runs around $10. Some institutions, like Synchrony, do not charge an excessive transaction fee; however, they will close the account if an account holder makes excessive transactions more than occasionally.

You should also watch out for a paper statement fee. Technically this is not a monthly service fee, but many institutions charge you on a monthly basis if you choose to receive paper statements in addition to electronic statements. Some online savings accounts have done away with paper statements altogether; check with your bank to confirm their terms and conditions.

Should I have a savings account at the same bank as my checking account?

You certainly could choose to keep your savings account at the same bank as your checking account for convenience’s sake, but that doesn’t mean you should. Your savings deserve the best interest rate available, which earns you the highest possible return. If you keep your checking account with a traditional brick-and-mortar bank, you’re not likely to find the best savings account rates at the same institution.

To get the best return on your savings possible, open a high-yield savings account. These accounts are most often found at online banks, but a handful of brick-and-mortar institutions have started offering high-yield online savings accounts that outearn their regular savings accounts by a mile.
It’s not that there aren’t any advantages to keeping a savings account at the same institution as your checking account — you do get slightly quicker transfers between the accounts, and you can see both accounts in a single app dashboard. If these benefits are important to you, check out Ally Bank, Discover Bank or Capital One 360. They offer competitive rates on both savings and checking, and Capital One 360 also has the benefit of branches in select states.

What other high-yield savings options do I have?

  • Money market account: A money market account features the same transaction limitations as a savings account, thanks to Regulation D. Money market accounts generally come with a debit card and checks, unlike most standard savings accounts. Money market accounts also tend to require higher minimum deposits and balances, and are more likely to charge a monthly fee than a savings account.
  • Checking account: A checking account is a highly liquid deposit account designed for handling your everyday expenses. They don’t typically earn any interest — when they do, they feature lower rates than savings accounts. Unlike savings accounts, there are no transaction limitations on checking accounts.
  • Certificates of deposit:CDs are a fixed-rate, fixed-term savings account. Each CD has a set term, typically between three and 60 months. Once you make your opening deposit, you cannot withdraw your money until the CD term ends. Should you make what is known as an early withdrawal, you’ll face a penalty — typically a portion of the interest earned on the account. The interest rate remains the same for the length of the term, unlike savings account rates, which are variable.
  • Mutual funds: A mutual fund is an investment vehicle, not a deposit account. Mutual funds invest in stocks, bonds or other assets, and allow you to diversify your investment portfolio.
magnifying glass

Important savings account definitions

A savings deposit is defined by the Federal Reserve’s Regulation D as having two distinct features: a reservation of right clause and a monthly limit on the number of “convenient” transfers or withdrawals.

Of these two features, the monthly limit on “convenient” transfers is most strictly observed. You are limited to six preauthorized and automatic transfers, telephone transfers and withdrawals and transfers made by check, debit card or a similar method. Going over this limit results in a fee per transaction.

Transfers and withdrawals that are not limited include those made in person at the bank, by mail, by using an ATM or over the phone when the withdrawal is disbursed via check mailed to the you.

Interest

Interest is the yield you earn on your savings deposit, otherwise known as the principal balance. It’s the profit given to you by the bank in exchange for your savings deposit, unlike the interest you owe on a loan.

Rate of interest

The rate of interest is the percentage your money earns in a savings account in one year. This is also referred to as the simple interest rate. Simple interest is different from annual percentage yield (APY), which is explained below.

Compound interest

Compound interest refers to the process by which interest earnings are added back into the principal balance in a savings account, which “compounds” the growth rate of your money. Interest can be compounded — or added back into the principal balance — daily, monthly, quarterly, semiannually or annually.

This process lets your interest earn interest. For example, daily compounding means your principal balance earns interest today, the interest is then added to the principal and that new higher balance earns slightly more interest tomorrow, and so on.

Annual percentage yield (APY)

Savings accounts are typically marketed by referencing their annual percentage yield rather than their simple interest rate. Annual percentage yield takes into account the extra impact of compounding interest over the course of one year. An account’s APY is always higher than the simple interest rate.

Yield rate

The yield rate is how much your savings balance will increase over a given period of time. Unlike simple interest, yield rate operates according to a specified time period. Unlike APY, yield rate is not tied to an annual calculation, so it can represent returns over a number of months or years, for example.

Minimum balance requirement

Many savings accounts have minimum balance requirements, or the amount of money you must keep in your account. Minimum balance thresholds are often required to earn interest or waive a monthly fee.

 

Savings Account FAQs

Your money is safe in a savings account as long as you bank with a reputable, insured institution. Your money is protected in case of bank failure by the FDIC for bank deposits or by the NCUA for credit union deposits.Your money should also be protected by safety measures taken by each institution, like firewalls, encryption, antivirus and anti-fraud detection and more. If you want to know more about the systems your bank has in place, you can typically find the information on their website or by giving them a call. It’s a good idea to take safety and privacy into account when shopping for the best savings account.

Deposit accounts aren’t listed on your credit report and they’re not subject to hard credit pulls, unlike when you apply for and use loans or credit cards. The activity in your savings account won’t affect your credit score, nor will the number of times you open a savings account.That doesn’t mean your deposit accounts go unmonitored. ChexSystems is a reporting system that tracks your banking activity. Most banks use ChexSystems to check your banking history for any previous overdrafts, negative balances, account closures and the like. If you do have a rocky banking history, this could make it more difficult for you to open future bank accounts. Still, opening multiple accounts won’t count against you.

You usually can open two or more savings accounts at the same bank, depending on the bank’s own policies. Each account will have its own account number. This tactic can be good for separating different savings goals.Oftentimes, banks can offer more than one type of account which can fit different needs. However, this doesn’t mean that you’ll get the best rates at the same bank. It’s still a good idea to shop across multiple banks to find the best savings account that suits your needs.

You can make ACH transfers and wire transfers from a savings account. If your account includes a debit/ATM card or checks, you can also make payments via those methods.Still, don’t forget that savings accounts are limited to six transfers and withdrawals per statement cycle. If you exceed these limits, you run the risk of incurring excessive withdrawal fees or having your savings account closed altogether.

Most savings accounts don’t include a debit or ATM card, which limits your ability to make in-person purchases. However, you can set up an ACH or wire transfer with your savings account number and bank routing number to send money for a purchase.

The federally imposed six-transaction limit on savings accounts applies to what are considered “convenient” transfers. These include preauthorized and automatic transfers, transfers made over the phone and withdrawals and transfers made by check or by debit or ATM card.You can withdraw money from your savings account an unlimited number of times when made at the bank in person, at an ATM or over the phone if the withdrawal is sent to you via check.

The choice between bank and credit union is largely based on personal preference.
Credit unions tend to be more community-focused than banks. You’re a member of a credit union, not a customer, so credit union members often have a say in credit union governance matters and elections. Plus, credit unions are often based around a specific geographic area, so you can build relationships with employees and fellow members.If it’s high-interest savings accounts you’re after, an online bank is probably your best bet over a traditional bank or credit union. Online savings accounts typically offer the highest rates around and their digital presence makes it easy to access your funds at any time during the day.If you’re still looking for high-interest rates, and aren’t afraid to lock away your cash for long periods of time, take a look at our recommended selection of the best credit unions which tend to offer some of the most competitive CD rates across the board.

You have to pay taxes on your savings account (and other deposit accounts) if you earned $10 or more in interest per year.Your bank will send you (and the IRS) a copy of Form 1099-INT if you meet or exceed this interest earnings threshold. If you don’t receive a 1099-INT from your bank, but earned $10 or more in interest, you’ll still need to report the earnings on your tax return.

Interest earnings are considered regular income for tax purposes. If you earned more than $1,500 in interest, you’ll need to detail the sources of that income on Schedule B of Form 1040.

Online banks don’t incur the costs of maintaining brick-and-mortar branches. These costs include rent, building maintenance, staff salaries and the cost of keeping physical cash safe. Without these expenses weighing them down, online banks reap big savings — savings they then pass on to their customers in the form of high interest rates

You may wish to open multiple savings accounts if you’re an individual with over $250,000 in savings. The FDIC and NCUA insurance only cover your bank accounts at the institution level. If you have an amount that exceeds the $250,000 insurance limit, you should spread your money out between multiple banks.This means that even if you have multiple savings accounts at the same bank, they would all be subject to the same $250,000 insurance limit. However, if you were to open multiple savings accounts across different institutions, you would be guaranteed up to $250,000 at each bank. This would allow all your money to be FDIC- or NCUA-insured.

Technically, there’s nothing stopping you from opening as many savings accounts as you want. However, this can get pretty cluttered and you can lose track of all your finances easily if you’re not careful. Make sure you’re getting the best savings rates for each account you open by shopping around.

Online savings index February 2020

Our online savings index tracks the monthly performance of a basket of online savings rates relative to a basket of savings rates from brick-and-mortar institutions.

  • Despite four Fed rate increases in 2018, savings yields at brick-and-mortar banks were pinned at less than 0.1%. Meanwhile, average yields at online banks soared, peaking above 2% in early 2019.
  • The spread between rates at online banks and brick-and-mortar banks widened considerably in the period between August 2017 and June 2019, then compressed somewhat in late 2019.

March 2020 savings index

In the midst of the coronavirus (COVID-19) pandemic, we surveyed 1,520 American consumers about their savings habits in the month of March. Here’s what we found:

  • Overall, 31% of Americans added or plan to add money to their savings account this month. That’s the lowest number we’ve seen in the six months we’ve conducted this survey.

  • Our survey also found that a similar number of consumers didn’t take money out of their savings at all. Savings habits remain unchanged for 35% of respondents who neither added nor withdrew funds from their account.

  • The number of Americans saving for emergencies increased sharply. Nearly one-third (32%) indicated they’re working on an emergency savings fund, which is a 45% increase from last month’s numbers. Of course, consumers may not all be adding to their emergency fund, but it’s definitely a start.
  • About 1 in 6 Americans (16%) don’t have any savings, leaving their finances in a precarious state during the global health pandemic.
  • More millennials (ages 24 to 39) and Gen Z (ages 18 to 23) saved money this month compared to their older counterparts. Nearly 4 in 10 (38%) of millennials and Gen Z, respectively, added money to their savings, compared to 31% of Gen X and 23% of baby boomers.

“The importance of having an emergency savings fund has become especially clear as the global health emergency has started to cause massive job losses,” said Ken Tumin, founder of DepositAccounts.com. “However, it’s concerning that 1 in 6 Americans don’t have any savings, making them especially vulnerable during this time of economic uncertainty. It’s never too late to start saving, and consumers who have the ability [to], should strongly consider stashing any amount they can in an FDIC-insured online savings account during this unprecedented pandemic.”

Survey Methodology

MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,520 Americans, with the sample base proportioned to represent the overall population. The survey was fielded March 18-19, 2020.

We defined generations as the following ages in 2020:

  • Gen Z are ages 18 to 23
  • Millennials are ages 24 to 39
  • Gen X are ages 40 to 54
  • Baby boomers are ages 55 to 74
  • Silent Generation are ages 75 and older

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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.

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Earning Interest

The Best CD Rates – March 2020

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.

Start saving today with these high-yield bank accounts

Updated March 23, 2020

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:

Institution

APY

Minimum Deposit Amount

Goldman Sachs Bank

0.60% APY – 1.90%APY

$500

Barclays Bank

1.85% APY – 1.85% APY

No minimum deposit

Discover Bank

0.35% APY – 1.80% APY

$2,500

Ally Bank

0.50% APY – 1.60% APY

No minimum deposit

Citizens Access

1.50% APY – 1.65% APY

$5,000

Live Oak Bank

1.40% APY – 1.50%APY

$2,500

Synchrony Bank

0.25% APY – 1.65% APY

$2,000

Rising Bank

1.55% APY – 1.20% APY

$1,000

BrioDirect

0.05% APY – 1.25% APY

$500

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

Goldman Sachs Bank USA

SEE DETAILS Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

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

CD TermAPY
6-months0.60%
9-months0.70%
12-months1.85%
18-months1.85%
2-year1.85%
3-year1.85%
5-year1.90%
6-year1.90%
1 year – 5 years: Barclays Bank – 1.85% – 1.85% APY, no minimum deposit to open

Barclays

SEE DETAILS 

Member FDIC

Barclays is one of the oldest banks in the world. Although they’re based in London, they do have a U.S. presence and offer competitive rates on their CDs and savings account. Currently, they’re offering some of the highest CD rates in the market, and they have an edge over the rest of the institutions on this list: they don’t require a minimum balance to earn the APY or open an account. Deposit as little or as much as you’d like into a term of your choice and you can start earning interest as long as the account is funded within 14 days of opening the CD. Additionally, your funds are insured through the FDIC.

CD TermAPY
1-year1.85%
2-year1.85%
3-year1.85%
4-year1.85%
5-year1.85%
3 months – 10 years: Discover Bank – 0.35% APY – 1.80% APY, $2,500 minimum deposit to open

Discover Bank

SEE DETAILS 

Discover Bank's website is secure

Member FDIC

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

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

CD TermAPY
3-months0.35%
6-months0.65%
9-months0.70%
12-months1.75%
18-months1.75%
2-year1.75%
30-months1.75%
3-year1.80%
4-year1.80%
5-year1.80%
7-year1.80%
10-year1.80%
3 months – 5 years: Ally Bank – 0.50% APY – 1.60% APY; $0 minimum deposit to open (higher APY with higher deposit)

Ally Bank

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

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

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

Citizens Access

SEE DETAILS Secured

on Citizens Access’s secure website

Member FDIC

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

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

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

CD TermAPY
6 months1.60%
12 months1.50%
18 months2.10%
2 years1.50%
3 years1.55%
4 years1.60%
5 years1.65%
6 months – 5 years: Live Oak Bank – 1.40% APY – 1.50% APY; $2,500 minimum deposit to open

Live Oak Bank

SEE DETAILS 

Member FDIC

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

Live Oak Bank offers competitive CD rates across the board, starting with its high-yield 6-month CD. Its 1 Year CD is among the most competitive as well, with its 2.15% APY. Live Oak Bank requires a minimum CD deposit of $2,500. You’ll lost 90 days of simple interest if you make an early withdrawal from a Live Oak CD less than 24 months and 180 days of simple interest on terms longer than that.

CD TermAPY

6-month CD

1.40%

1-year CD

1.90%

18-month CD

1.90%

2-year CD

1.50%

3-year CD

1.50%

4-year CD

1.50%

5-year CD

1.50%

3 months – 5 years: Synchrony Bank – 0.25% APY – 1.65% APY; $2,000 minimum deposit to open

Synchrony Bank

SEE DETAILS 

Member FDIC

Synchrony used to be a part of GE, and now has an online bank that pays competitive rates. The online deposits are used to fund their store credit card portfolio – and the company is publicly traded. If you have $2,000 or more to deposit into a CD, Synchrony will offer you some of the best CD rates. However, if you have less than $2,000, you’re better off going with one of the other online banks above. Your deposit will be insured up to the FDIC limit. In a rising rate environment, this is a great way to get a high interest rate without locking yourself into a long term.

CD TermAPY
3-months0.25%
6-months0.50%
9-months0.75%
12-months1.50%
15-months1.50%
18-months1.50%
24-months1.50%
36-months1.55%
48-months1.60%
60-months1.65%
1 Year – 3 Years: Rising Bank – 1.55% APY – 1.20% APY; $1,000 minimum deposit to open

Rising Bank

SEE DETAILS Secured

on Rising Bank’s secure website

Member FDIC

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

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

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

CD TermAPY
1-year1.55%
2-year1.20%
3-year1.20%
30 days – 5 years: BrioDirect – 0.05% APY – 1.25% APY; $500 minimum deposit to open

BrioDirect

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on BrioDirect’s secure website

FDIC Insured

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

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

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:

Institution

APY

Minimum Deposit Amount

Goldman Sachs Bank

1.70% APY – 1.50% APY

$500

Ally Bank

1.40% APY – 1.55% APY

$25,000

Investors eAccess

1.15% APY

$500

Purepoint Financial

1.01% APY – 0.95% APY

$10,000

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

Goldman Sachs Bank USA

SEE DETAILS Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

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

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

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

Ally Bank

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on Ally Bank’s secure website

Member FDIC

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

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

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

Investors eAccess

SEE DETAILS Secured

on Investors EAccess’s secure website

Member FDIC

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

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

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

PurePoint Financial

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on PurePoint Financial’s secure website

Member FDIC

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

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

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

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.

Time Period

Institution

APY

1 Year

Inova Federal Credit Union

2.25% APY

1 Year

Banesco USA

1.75% APY

2 Year

MAC Federal Credit Union

2.25% APY

2 Year

Synchrony Bank

1.50% APY

3 Year

Keesler Federal Credit Union

2.57% APY

3 Year

Primary Bank

2.00% APY

4 Year

Credit Union of the Rockies

2.60% APY

4 Year

Primary Bank

2.00% APY

5 Year

Hiway Federal Credit Union

2.10% APY

5 Year

Home Loan Investment Bank, F.S.B.

2.00% APY

Best 1-year CD rates

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

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

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


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on INOVA Federal Credit Union’s secure website

NCUA Insured

Best 1-year CD rate from a National Bank: Banesco USA – 1.75% APY, $1,500 minimum deposit

12 Month CD from Banesco USA
Look out for Banesco USA’s BaneSmart Certificates of Deposit and their competitive interest rates. For one, its 12-Month CD earns 1.75% APY on all balances under $250,000. You need at least $1,500 to open a new BaneSmart CD.

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


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Member FDIC

Best 2-year CD rates

Best 2-year CD rate from a Credit Union: MAC Federal Credit Union – 2.25% APY, $1,000 minimum deposit

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

You can become a member a number of ways including residence, employment, and relation to an existing member. You can also become a member if you are part of, or choose to be part of, the Polar Bear Chapter of the Association of the United States Army. Once you’re a member, you can open the 24 Month CD with a minimum deposit of $1,000 and start earning the 2.25% 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

NCUA Insured

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

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

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


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Member FDIC

Best 3-year CD rates

Best 3-year CD rate from a Credit Union: Keesler Federal Credit Union – 2.57% APY, $1,000 minimum deposit

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

Keesler Federal’s 30 Month Step Certificate requires only $1,000 to open. It earns a 1.50% APR for the first 10 months, a 2.50% APR for the next 10 months and a 3.50% APR for the final 10 months, resulting in a blended 2.57% APY.

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


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NCUA Insured

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

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


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on Primary Bank’s secure website

Member FDIC

Best 4-year CD rates

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

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

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


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NCUA Insured

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

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


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on Primary Bank’s secure website

Member FDIC

Best 5-year CD rates

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

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

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


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on Hiway Federal Credit Union’s secure website

NCUA Insured

Best 5-year CD rate from a National Bank: Home Loan Investment Bank, F.S.B. – 2.00% APY, $2,500 minimum deposit

5 Year e-CD from Home Loan Investment Bank, F.S.B.
Home Loan Investment Bank, F.S.B. is offering a high APY of 2.00% on a 5 Year e-CD. You’ll need $2,500 to open the account. The early withdrawal penalty is six months’ interest on the amount withdrawn. This penalty applies to all CD terms from this bank.

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


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Member FDIC

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

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

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

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

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

Questions to ask before you open a CD

1. How are CDs different from savings accounts?

With a CD, the saver and the bank make stronger commitments. The saver promises to keep the funds in the account for a specified period of time. In exchange, the bank guarantees the interest rate during the term of the CD. The longer the term, the higher the rate – and the higher the penalty for closing the CD early. With a savings account, you’re limited to six withdrawals or transfers per month. Otherwise, you can empty the account at any time without paying a penalty. You can’t lock in the interest rate on a savings account, though, since the bank can change the interest rate at any time.

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

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

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

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

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

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

3. What CD term length should I select?

The early withdrawal penalties on CDs can be significant. On a 1-year CD, 90 days’ worth of interest is a typical penalty, although it can reach as high as 180 days. On 2- and 3-year CDs, a 6-month penalty is about average. The impact of the penalty on your return can be significant: if you opened a one-year CD with a 2.65% APY and closed it after six months, you would forfeit half of the interest and earn only 1.32%. You would have been better off with a savings account paying 2.25%.

The worst case scenario is with the longest CDs. 5-year CDs usually have a one-year penalty for taking out funds early. If you open a 5-year CD and close it quickly, you could actually end up losing money.

Given the risk of early withdrawal penalties, it’s important that you’re completely confident that you will not need to withdraw the money early. Check that you already have enough savings in a flexible emergency fund to cover you for the next few years in the event of an accident or surprise trip to urgent care. Ask yourself whether your deposit would be put to better use paying off any debts. If you’re not completely convinced you can sock away that much money for such a commitment, go for a shorter CD term or a savings account.

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

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

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

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

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

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

The interest rates shown in this article are all from credit unions and online banks that offer products nationally. However, our product database includes traditional banks, community banks and credit unions.

If traditional banks offered better rates, they would have been featured in this article. Internet-only banks have dramatically better interest rates. That should not be surprising — because internet-only banks do not have branches, they are able to pass along their cost savings to you in the form of higher interest rates and lower fees.

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

How to find the best CD for you

If you don’t find an account that meets your needs in this article, you can use the MagnifyMoney CD tool to find the best rate for your individual needs. Input your zip code, deposit amount and term. The tool will then provide you with CD options, from the highest APY to the lowest.

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

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Best of, Earning Interest

The Best 6-Month CD Rates in 2020

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 top 6-month CD rates

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. The national average APY on 6 month CDs (among banks and credit unions) is 0.853%, 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

BankAPYMinimum deposit amount
HSBC Direct0.75%$1,000
BrioDirect1.20%$500
WebBank0.65%$2,500
My eBanc1.00%$5,000
Nationwide by Axos Bank0.40%$500

HSBC Direct — 0.75% APY, $1,000 minimum deposit

6 Month Direct CD from HSBC DirectHSBC Direct offers a true high-yield 6 Month CD, earning 0.75% APY on all balances starting at $1,000. You must fund an HSBC Direct CD with new money. Making an early withdrawal will trigger a penalty of 30 days simple interest.HSBC Direct is an online banking arm of HSBC which spans 65 countries and territories around the world. HSBC is headquartered in Tysons, Va.

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on HSBC Direct’s secure website

Member FDIC

BrioDirect — 1.20% APY, $500 minimum deposit

High-Rate 9 Month CD from BrioDirect If you’re willing to wait a little longer for your CD to mature, you can open BrioDirect’s High-Rate 9-Month CD with at least $500. You’ll still snag one of the best short-term CD rates out there. BrioDirect will assess a penalty of 90 days interest whether earned or not on any early withdrawals.

BrioDirect is the online brand of Sterling National Bank, which was founded in 1888.

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FDIC Insured

WebBank — 0.65% APY, $2,500 minimum deposit

6 Month CD from WebBankWebBank offers only five CD terms, the shortest of which is its 6 Month CD which still earns at a top rate. There are no WebBank branches, so you’ll need to open the account online with at least $2,500. The early withdrawal penalty on this account equals three months’ interest.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.

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Member FDIC

My eBanc — 1.00% APY, $5,000 minimum deposit

6 Month Online Time Deposit from My eBancA high-yield 6-month Online Time Deposit at My eBanc requires an opening deposit of at least $5,000. You can easily open the account online. The account doesn’t charge any maintenance fees. However, making an early withdrawal from the 6-month CD will trigger a penalty equal to 90 days’ worth of interest.

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.

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Member FDIC

Nationwide by Axos Bank — 0.40% APY, $500 minimum deposit

6 Month CD from Nationwide by Axos BankSnag this competitive 6 Month CD rate from Nationwide by Axos Bank, a rate better than its longer 9-month-term counterpart. It requires at least $500 to open.
Nationwide has partnered with Axos Bank to provide Nationwide customers with a wider financial package. An entirely digital bank, Axos Bank was founded in 2000 and is headquartered in San Diego, Ca.

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on Nationwide By Axos Bank’s secure website

FDIC Insured

Credit unions with the best 6-month CD rates

Credit UnionAPYMinimum deposit amount
Andrews Federal Credit Union2.05%$1,000
Keesler Federal Credit Union2.00%$1,000
Elements Financial1.85%$1,000
Partner Colorado Credit Union1.15%$25,000
Communitywide Federal Credit Union1.45%$1,000

Andrews Federal Credit Union — 2.05% APY, $1,000 minimum deposit

8 Month Certificate Special from Andrews Federal Credit Union To earn the top credit union rate, head to Andrews Federal Credit Union for its slightly longer 8-Month Share Certificate. It earns at a rate comparable to longer-term CDs and higher than the top 6-month CD rate from a bank/ You’ll need at least $1,000 to open the account either online or at an Andrews FCU branch. The early withdrawal penalty equals 90 days of dividends.

Andrews Federal Credit Union was founded in 1948 and is headquartered in Suitland, Md. It currently serves over 120,000 members worldwide. 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.

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on Andrews Federal Credit Union’s secure website

NCUA Insured

Keesler Federal Credit Union — 2.00% APY, $1,000 minimum deposit

9 Month CD Special - New Money from Keesler Federal Credit UnionCash in on this 9-month-CD special with Keesler’s second highest APY. The only deposit that will net you a higher rate is their 5-year CD. To take advantage of this promotional APY, you’ll need to fund the CD with new money.Keesler Federal is the largest credit union in Mississippi and one of the largest credit unions in the Southeast. Membership is available to employees of their 300+ select groups and their family members; military with Keesler Air Force Base or Royal Air Force Bases in the UK; as well as people who live, work, attend school or worship in specific counties/parishes in Mississippi, Louisiana and Alabama.

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on Keesler Federal Credit Union’s secure website

NCUA Insured

Elements Financial — 1.85% APY, $1,000 minimum deposit

8 Month CD Special from Elements FinancialElements Financial offers this more competitive rate on its 8 Month Term Certificate Special. Like its regular certificates, it requires $1,000 to open. Upon maturity, this certificate will renew as a 6 Month Term Certificate. Careful to not make an early withdrawal from this account as you’ll lose 60 days’ dividends.Headquartered in Indianapolis, Ind., Elements Financial was established in 1930 by the management of Eli Lilly and Company. Today, membership is open to employees of over 135 partner organizations in the country.

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on Elements Financial’s secure website

NCUA Insured

Partner Colorado Credit Union — 1.15% APY, $25,000 minimum deposit

6 Month Baby Jumbo CD from Partner Colorado Credit UnionPartner Colorado Credit Union’s 6 Month Baby Jumbo CD yields a higher rate for larger investment. You’ll need to deposit a minimum of $25,000 to earn interest higher than the credit union’s typical CDs.Partner Colorado caters to residents and employees in the Denver area but can be joined nationwide with a simple $5 donation to the Partner Colorado Foundation.

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on Partner Colorado Credit Union’s secure website

NCUA Insured

Communitywide Federal Credit Union — 1.45% APY, $1,000 minimum deposit

6 Month Share Certificate from Communitywide Federal Credit UnionWith at least $1,000, you can open a high-yield 6-month CW Certificate Account online. The early withdrawal penalty from this account is equal to the amount withdrawn multiplied by the remaining days left in the term.

Founded as a credit union to provide quality financial services to individuals in South Bend, Ind., Communitywide Federal Credit Union has grown to offer their services to various communities within Indiana as well as the digital world.

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.

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on Communitywide Federal Credit Union’s secure website

NCUA Insured

Pros and cons of using 6 month CDs

Pros:

  • The CD rates offered by banks and credit unions are generally higher than those on savings accounts.
  • The rates are fixed and guaranteed for the length of their term.
  • The discipline of keeping the funds in the CD means the money will be available upon maturity. (Note: Most banks offer a seven-day grace period to reinvest or withdraw the investment, after which the funds will roll over into a new CD. However, you are not guaranteed the same rate.)

Cons:

  • Six-month CD rates are lower than those offered on longer CD investment terms.
  • To tap into the CD funds — even for emergencies — consumers must accept a loss through penalties, which can include a percentage of the funds, a percentage of the earned interest, or a combination of both. A typical penalty on a short-term CD is between 30 and 90 days’ worth of interest earnings.
  • If you’re not confident you can do without access to the funds for six months, you may be better off putting your money in a traditional savings account, which is likely to earn less interest than a CD.
  • Since CD rollovers may reset at a different percentage rate, consumers must speak with the bank before the grace period ends to ensure they are getting the best deal.

Using a 6 month CD for laddering

A CD ladder comprises small-amount CDs with varying terms and respective interest rates that contribute to a long-term investment strategy. After the 6 month CD matures, investors can withdraw the funds for a predetermined expense. Or, they can reinvest the money into a longer-term CD with a better rate. By staggering the maturity dates on short-term CDs, consumers have access to their cash on a regular, predictable basis.

Where can you open a CD account?

Consumers can open 6 month CD accounts (or longer) from banks and credit unions. Bank and credit union CD rates are based on Federal Reserve rates, and there may be strategic times to pursue these short-term instruments following a rate increase.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.