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Best of, Earning Interest

The Best IRA CD Rates – December 2019

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

Perhaps you’ve decided to build a CD ladder within your IRA, or maybe you’re looking for a safe way to store your retirement cash for a specific period of time. Whatever the reason, you’re interested in getting an IRA CD and, understandably, want to know what products will give you the best rate of return.

You can get an IRA CD with terms ranging from three months to more than six years, with interest rates generally increasing with the term length. There are lots of options, so we’ve rounded up the top IRA CD rates that are available right now for a variety of terms. You’ll select your IRA CD terms based on your CD-ladder master plan or whenever you’ll need access to your money.

Every month, we choose the best IRA CD rates using data from another LendingTree company DepositAccounts.com, a database of offerings at more than 17,100 banks and credit unions. We sorted the products by APY, then eliminated institutions with a health rating below a B. We then eliminated products that are not available nationwide. From there, we chose the IRA CD with the highest APY among products with a minimum deposit no greater than $5,000. Here are the best options.

The best IRA rates in December 2019

Term

Institution

APY

Minimum Deposit Amount

3 months

BethPage FCU

1.60%

$50

6 months

CommunityWide Federal Credit Union

2.20%

$2,000

12 months

State Department Federal Credit Union

2.32%

$500

18 months

Market USA Federal Credit Union

2.36%

$500

2 years

MAC Federal Credit Union

2.80%

$1,000

3 years

Wheelhouse Credit Union

2.86%

$1,000

4 years

American 1 Credit Union

2.78%

$50

5 years

American 1 Credit Union

3.03%

$50

6+ years

Evansville Teachers FCU

2.40%

$1,000

 

Best 3-month IRA CD – BethPage Federal Credit Union (Traditional, Roth)

3 Month IRA from Bethpage Federal Credit Union
The BethPage Federal Credit Union features the most competitive 3-month IRA CD that’s currently available, with an APY of 1.60% and a minimum deposit of just $50.

LEARN MORE 

NCUA Insured

Best 6-month IRA CD — CommunityWide Federal Credit Union (Traditional, Roth)

6 Month IRA from Communitywide Federal Credit Union
CommunityWide Federal Credit Union is offering the highest rate available on 6-month IRA CDs at 2.20% APY for deposits of $1,000 and over. That translates into earnings of $10.94 if you were only to deposit the minimum amount.

LEARN MORE Secured

on Communitywide Federal Credit Union’s secure website

NCUA Insured

Best 1-year IRA CD — State Department Federal Credit Union (Traditional, Roth)

12 Month IRA Certificate from State Department Federal Credit UnionThis one-year term share certificate earns an APY of 2.32% and only requires a minimum deposit of $500. This is a significantly higher rate than the credit union’s traditional one-year share certificate, which earns an APY of 2.12%.

LEARN MORE Secured

on State Department Federal Credit Union’s secure website

NCUA Insured

Best 18-month IRA CD — Market USA Federal Credit Union IRA CD (Traditional, Roth, CESA)

18 Month Preferred CD from Market USA Federal Credit UnionMarket USA FCU’s 18-month IRA CD earns a competitive rate of 2.36% APY, with a $500 minimum deposit to open. Dividends are compounded daily and credited monthly. With a $1,000 deposit, you stand to earn $35.61 in dividends over the term of the certificate.

LEARN MORE Secured

on Market USA Federal Credit Union’s secure website

NCUA Insured

Best 2-year IRA CD – MAC Federal Credit Union (Traditional, Roth, CESA)

24 Month IRA from MAC Federal Credit UnionAlthough it’s headquartered in Alaska, MAC Federal Credit Union is open to anyone who joins the Polar Bear Chapter of the Association of the United States Army, which costs $40 for a two-year membership. MAC Federal Credit Union’s 24-month IRA / Roth IRA Share Certificate currently offers the best APY for a 2-year CD – 2.80%.

LEARN MORE Secured

on MAC Federal Credit Union’s secure website

NCUA Insured

Best 3-year IRA CD – Wheelhouse Credit Union

33 Month IRA Certificate Special - New Money from Wheelhouse Credit UnionWheelhouse Credit Union is an expansive credit union open to anyone who joins the Zoological Society. Currently, Wheelhouse Credit Union is offering a promotional rate on its 33-month certificates and IRAs. With a minimum opening deposit of $1,000 in new money – which can be combined with funds already on deposit at Wheelhouse – the 33-month IRA features an APY of 2.86%. Meanwhile, a minimum deposit of just $500 on the 33-month IRA will garner an APY of 2.60%.

LEARN MORE Secured

on Wheelhouse Credit Union’s secure website

NCUA Insured

Best 4-year IRA CD – American 1 Credit Union (Traditional, Roth, CESA)

4 Year IRA from American 1 Credit UnionThe American 1 Credit Union takes the cake for the best 4-year IRA CD. This CD has a minimum of just $50 and an APY of 2.78%, several percentage points above its competitors. Membership to this credit union is open to anyone through membership of the Community 1 Cooperative, which has just a $3 fee.

LEARN MORE Secured

on American 1 Credit Union’s secure website

NCUA Insured

Best 5-year IRA CD – American 1 Credit Union (Traditional, Roth, CESA)

5 Year IRA from American 1 Credit UnionThe American 1 Credit Union also ranks on our list for the best 5-year IRA CD. This CD has a minimum of just $50 and an APY of 3.03%. Membership to this credit union is open to anyone through membership of the Community 1 Cooperative, which has just a $3 fee.

LEARN MORE Secured

on American 1 Credit Union’s secure website

NCUA Insured

Best 6-year IRA CD — Evansville Teachers FCU (Traditional, Roth, CESSA)

6 Year IRA from Evansville Teachers Federal Credit UnionTo join this credit union, you may make a $5 donation to the Mater Dei Friends & Alumni Association. You may want to strongly consider doing so, as the 6-year IRA CD rate offered by Evansville FCU is the best on the market in terms of APY. Plus, it only requires a minimum balance of $1,000.

LEARN MORE Secured

on Evansville Teachers Federal Credit Union’s secure website

NCUA Insured

3 questions to consider before opening an IRA CD

Opening an IRA CD generally requires filling out a form or talking to a banker. You’ll have to have a way to fund your IRA CD, whether that’s rolling over an existing retirement account into an IRA CD or depositing cash into the product. The same limits that apply to IRA contributions apply to IRA CDs: $5,500 per year ($6,500 if you’re over age 50) of your own money across all your IRA accounts each year, and you can do a rollover once per year.

Unless you’ve invested in a bump-up IRA CD, you won’t be able to take advantage of a higher rate until your CD matures. Withdrawing funds from an IRA CD before they mature will result in a stiff penalty. Bump-up IRA CDs give you a chance to increase your interest rate to a higher level if it’s available, but you’re generally only allowed to do this once or twice during the life of the CD.

You can either use the direct-transfer method or the indirect-transfer method. The direct transfer method requires setting up your new IRA account filling out a form authorizing the bank or credit union to transfer money from the old account into the new account. The indirect transfer method involves you asking for a check from your old IRA account. You have up to 60 days to deposit that check into your IRA CD to avoid incurring a penalty.

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.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Earning Interest

Top Jumbo CD Rates for December 2019

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

Conservative savers generally consider certificates of deposits (CDs) as sanctuaries where their money is kept safe and they enjoy a decent yield without stomaching the risk of investing in the stock market.

You agree to deposit your money in a bank or credit union for a fixed amount of time (which can be as short as a few months or as long as several years) and get the satisfaction of knowing your money is likely earning a higher annual percentage yield (APY) than it would in a checking or savings account.

Jumbo CDs, which in most cases require a minimum deposit of $100,000, have traditionally promised even higher APYs for customers than regular CDs. But a combination of unsettled interest rates and fierce competition among banks — both online and traditional — for the deposits of customers have given rise to many normal CDs that offer a better return than jumbo CDs.

It’s not entirely clear why banks haven’t been similarly aggressive in offering higher-yield jumbo CDs, but one possibility is that they are interested in attracting more customers rather than big money deposits. In other words, banks would rather have the business of 100 customers each depositing $5,000 CDs than 10 customers depositing $500,000 jumbo CDs.

Regular 1-Year CD vs 1-Year Jumbo CD

Institution

Capital One

My eBanc

CD Term

1 year

1 year

APY

2.10%

2.05%

Minimum Deposit Amount

$0

$100,000

LEARN MORE Secured

on Capital One’s secure website

Member FDIC

Learn More

Regular 3-Year CD vs 3-Year Jumbo CD

Institution

MAC Federal Credit Union

Veridian Credit Union

CD Term

3 year

3 year

APY

2.50%

1.40%

Minimum Deposit Amount

$1,000

$100,000

LEARN MORE Secured

on MAC Federal Credit Union’s secure website

NCUA Insured

Learn more

Regular 5-Year CD vs 5-Year Jumbo CD

Institution

Goldman Sachs Bank USA

KS StateBank

CD Term

5 year

5 year

APY

2.15%

1.75%

Minimum Deposit Amount

$500

$100,000

LEARN MORE Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

Learn more

That said, if you feel the need to go big when it comes to your CD, then you likely won’t find better rates than the ones listed below.

The top jumbo CD rates of December 2019

To determine the best CDs for your jumbo-sized deposit, we turned to the database found on DepositAccounts.com, a website that like MagnifyMoney is also owned by LendingTree. For each common CD term, we assumed the customer was planning to deposit $100,000 in the account so as to include traditional jumbo CDs which typically have a higher minimum deposit needed to open. All the accounts included are also available nationwide.

You’ll notice as you read through the list of CDs we’ve selected, that some of them have minimum deposits of far less than $100,000. That’s because we’re focused on informing you of the best CD accounts for your money, and there are plenty of large minimum deposit CDs that still offer a great APY. You can rest assured we aren’t leaving out any good deals just because a financial institution’s marketing team decided not to call a CD “jumbo.”

Institution

CD Term

APY

Minimum Deposit Amount

Total Direct Bank3 months1.75%$25,000
Consumers Credit Union (IL)8 months2.15%$100,000
Partner Colorado Credit Union12 months2.05%$25,000
Advancial18 months2.20%$50,000
Dover FCU24 months2.45%$100,000
Dover FCU36 months2.60%$100,000
Dover FCU48 months2.76%$100,000
Dover FCU60 months2.90%$100,000

As of December 6, 2019

Banks that offer the best jumbo CD rates

Total Direct Bank — 3-month CD, 1.75% APY

TotalDirectBank

Total Direct Bank is an internet bank that lacks any physical branches and offers its high-yielding deposit products throughout the United States. Note that Total Direct is a division of City National Bank of Florida, which holds your deposits and provides FDIC insurance. All of Total Direct Bank’s CD products require a sizable minimum deposit of $25,000, including the 3-month. It’s worth noting as well that the maximum deposit amount allowed per client with Total Direct is $500,000.

CD maturities renew automatically, with a ten-day grace period following maturity to withdraw your funds without being charged a penalty. Interest is paid at maturity, either by check or bank transfer to another account, or it can be rolled over into a new certificate with the original principal.

LEARN MORE Secured

on TotalDirectBank’s secure website

Member FDIC

Consumers Credit Union (IL) – 8-month CD, 2.15% APY

Consumers Credit Union (IL)
The Consumers Credit Union is an online credit union with a number of physical branches in Illinois. Membership to the Consumers Credit Union is open to anyone who pays a one-time, $5 fee to the Consumers Cooperative Association. The credit union features a number of competitive financial products, but its jumbo 8-month CD is especially noteworthy.

The Consumers Credit Union 8-month CD boasts a 2.15% APY . With a minimum required deposit amount of $100,000. Rates are guaranteed for the term of your certificate, but an early withdrawal penalty may be applied if you withdraw your funds before the maturity date.

LEARN MORE Secured

on Consumers Credit Union (IL)’s secure website

NCUA Insured

Partner Colorado Credit Union – 12-month CD, 2.05% APY

Partner Colorado Credit Union
Despite its name, Partner Colorado Credit Union extends its membership to anyone who makes a $5 donation to the Partner Colorado Foundation. It offers an array of financial products and services, including regular, baby jumbo and jumbo certificates of deposit with varying term lengths.

Partner Colorado Credit Union features a 12-month baby jumbo certificate with a generous 2.05% APY. This product requires a minimum balance of $25,000 to open an account and to earn interest. If you withdraw your funds from this CD before the maturity date, you will face a penalty fee equal to 90 days of interest.

LEARN MORE Secured

on Partner Colorado Credit Union’s secure website

NCUA Insured

Advancial – 18-month CD, 2.20% APY

Advancial

Headquartered in Dallas, Advancial is a credit union that has roots dating back to 1937. While this credit union only has a handful of locations in Alaska, Texas, Oklahoma and Louisiana, membership is still open to anyone who joins Connex and pays a $5 fee.

Advancial offers a slew of CDs, including regular, IRA, business and jumbo iterations. Its 18-month jumbo CD is worth highlighting, as it touts a generous APY of 2.20% and a minimum deposit of $50,000.

LEARN MORE Secured

on Advancial’s secure website

NCUA Insured

Dover FCU – 24-month Term Share, 2.45% APY, 36-month Term Share, 2.60%, 48-month Term Share, 2.76% APY, 60-month Term Share 2.90% APY

Dover Federal Credit Union
Dover Federal Credit Union is an online credit union, headquartered in Delaware. Its 2-year, 3-year, 4-year and 5-year Share Certificates of $100,000 or higher currently have has the highest rates for a 2-year, 3-year, 4-year and 5-year CD, with APYs of 2.45%, 2.60%, 2.76% and 2.90% respectively. Dividends are paid monthly on Dover’s Share Certificates. If a withdrawal is made within one year of maturity or less, Dover will charge a penalty equal to 90 days dividends.

Membership to Dover FCU is open to anyone who joins the Friends of Bombay Hook. Membership is also open to military personnel of the U.S. government with duty location in Delaware, employees of Dover Air Force Base, Bayhealth, Dover Downs and over 400 of its business partners.

LEARN MORE Secured

on Dover Federal Credit Union’s secure website

NCUA Insured

 

Go jumbo or stick to regular CDs?

To be considered “jumbo,” a CD needs to require a large minimum deposit, usually $100,000, as opposed to a normal CD which may not even require a minimum deposit. The deal banks made with well-off depositors boiled down to ‘if you leave lots of your money with us in this jumbo CD, we’ll give you a higher yield than if you deposited it in a normal CD.’

It’s important to note the differences between a jumbo CD and regular CD aren’t set in stone and have more to do with how the bank or credit union markets their savings products than any hard and fast rule, says Ken Tumin, founder of DepositAccounts.com, another LendingTree-owned site.

“I’ve seen banks and credit unions with jumbo CD minimums as low as $10,000 and as high as $250,000,” Tumin told MagnifyMoney. “Even if a bank doesn’t offer jumbo CDs with high minimums, someone could still deposit a large balance into a regular CD. They just wouldn’t be earning any higher interest than someone depositing a small balance.”

As the difference in earnings from a jumbo CD and traditional CD has diminished (or disappeared completely), the drawbacks of parking so much money in a CD become more apparent. For example, the jumbo CDs with the highest APY usually require a longer period of time to mature, which means you have at least $100,000 exposed to inflation—which means you possibly end up earning less than you expected.

Withdrawal penalties on jumbo CDs

According to a recent survey, the penalties for withdrawing your money from your CD early could be serious. Some banks will even take part of your principal as a penalty.

Below are the most common penalties, according to the survey:

  • 3 month CD: Three months of interest
  • 6 month CD: Three months of interest
  • 1 year CD: Six months of interest
  • 2 year CD: Six months of interest
  • 5 year CD: A year’s worth of interest

So, it’s important to be confident that you want to put your money in a CD. When you do this, you’re making an agreement with the bank to leave it there for a set period of time. If you’re unsure if you want to tie up your money for a long period of time, consider a high-yield savings account instead.

How jumbo CDs are taxed

It’s important to know that the interest you earn on your jumbo CD will be taxed as interest income, not as capital gains income.

This means that your bank or credit union will send you a 1099-INT form at the end of the year to show how much interest you earned in your jumbo CD and you will be taxed on that.

Are jumbo CDs safe?

According to the U.S. Securities and Exchange Commission: “Certificates of deposit are considered to be one of the safest savings options. A CD bought through a federally insured bank is insured up to $250,000.”

Some people prefer investing in the stock market over CDs because you can often get higher rates of returns; however, the stock market is a riskier bet, and returns are not guaranteed like those associated with CDs.

CDs are not affected by the whims of the stock market. The interest rate you agree on with your bank is the rate you will get. That interest rate, however, may not outpace inflation, meaning you may not really earn much, if anything, over time.

Final thoughts

If you have over $100,000 and want to invest it in a jumbo CD, you have several options. Like the chart above shows, you can choose many different terms and durations for your jumbo CD. Just be sure to research the bank you invest with so you know you’re putting your money with a top-rated institution. Also, be sure that you’re comfortable with putting your money in a CD long-term because there are often penalties for withdrawing your money early.

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.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here

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Best of, Earning Interest

The Top 6 Month CD Rates for December 2019

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

The 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. We excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.878%, 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
TAB Bank2.24%$1,000
BrioDirect2.00%$500
ConnectOne Bank2.00%$500
HSBC Direct2.00%$1,000
BankUnitedDirect1.90%$1,000

TAB Bank — 2.24% APY, $1,000 minimum deposit

6 Month CD from TAB BankTAB Bank requires a minimum deposit of $1,000 to get started with its CDs like its 6 Month CD. Just watch out for an early withdrawal, as you’ll lose 90 days interest on the amount withdrawn subject to penalty.

TAB Bank was founded in 1998.

LEARN MORE Secured

on TAB Bank’s secure website

Member FDIC

BrioDirect — 2.00% 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.

LEARN MORE Secured

on BrioDirect’s secure website

FDIC Insured

 

ConnectOne Bank — 2.00% APY, $500 minimum deposit

5 Month CD from ConnectOne BankOpen a ConnectOne Bank 5 Month Time Deposit with at least $500 to start earning interest at its APY. interest compounds daily and posts to the account monthly. The early withdrawal penalty imposed will equal 90 days of interest on your account, deducted from the interest earned.

Founded in 2005, ConnectOne Bank is based in Englewood Cliffs, N.J. and serves the New Jersey and New York community with its physical branches

LEARN MORE Secured

on ConnectOne Bank’s secure website

Member FDIC

HSBC Direct — 2.00% APY, $1,000 minimum deposit

6 Month Direct CD from HSBC DirectHSBC Direct offers a true high-yield 6 Month CD, earning 2.00% 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.

LEARN MORE Secured

on HSBC Direct’s secure website

Member FDIC

BankUnitedDirect — 1.90% APY, $1,000 minimum deposit

6 Month CD from BankUnitedDirectBoost your rate (and maturity wait time) a bit with BankUniredDirect’s 9-Month Online CD. It earns 1.90% APY and requires a $1,000 minimum deposit to get started. Interest is compounded and paid monthly. The early withdrawal penalty for the 9-Month Online CD would be an amount equal to 30 days simple interest on the amount withdrawn.

BankUnitedDirect is the online banking division of BankUnited, N.A., which itself is a subsidiary of BankUnited, Inc. BankUnited was founded in 2009.

LEARN MORE Secured

on BankUnitedDirect’s secure website

Member FDIC

Credit unions with the best 6-month CD rates

Credit UnionAPYMinimum deposit amount
NASA Federal Credit Union2.35%$10,000
Communitywide Federal Credit Union2.20%$2,000
Elements Financial 2.10%$1,000
Consumers Credit Union2.05%$250
Andrews Federal Credit Union2.05%$1,000

NASA Federal Credit Union — 2.35% APY, $10,000 minimum deposit

9 Month Share Certificate Special - New Money from NASA Federal Credit UnionIf you have $10,000 in new money to deposit and are willing to wait a bit longer for your CD to mature, open a 9 Month Share Certificate Special from NASA Federal Credit Union. Withdrawal of funds before maturity will result in the loss of 182 days of dividends on the amount withdrawn. When this Special matures, it will renew into a 6 Month Share Certificate.
You don’t need to be a NASA employee to join the credit union. You can also join if you’re an employee or member of partner companies or associations or relative or household member of a current member. Even if these don’t apply to you, NASA Federal will provide a complimentary one-year affiliated membership to the National Space Society (NSS), which gains you credit union membership as well.

LEARN MORE Secured

on NASA Federal Credit Union’s secure website

NCUA Insured

Communitywide Federal Credit Union — 2.20% APY, $2,000 minimum deposit

6 Month Share Certificate from Communitywide Federal Credit UnionWith at least $2,000, 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.

LEARN MORE Secured

on Communitywide Federal Credit Union’s secure website

NCUA Insured

Elements Financial — 2.10% 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.

LEARN MORE Secured

on Elements Financial’s secure website

NCUA Insured

Consumers Credit Union — 2.05% APY, $250 minimum deposit

8 Month CD from Consumers Credit Union (IL)To get a little extra boost on a short-term CD, consider the 8 Months CD from Consumers Credit Union instead of its 6 Months account. You’ll earn more interest, still with the low starting amount of $250. Just don’t make an early withdrawal from the account, as it will result in a loss of 60 days of dividends.

Founded in 1930 and headquartered in Lake County, Ill., Consumers Credit Union is easy to join. You have to become a Member of the Consumers Cooperative Association, which merely requires a one-time payment of the $5 Membership fee.

LEARN MORE Secured

on Consumers Credit Union (IL)’s secure website

NCUA Insured

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.

LEARN MORE Secured

on Andrews Federal Credit Union’s secure website

NCUA Insured

Pros and cons of using 6 month CDs

Pros:

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

Cons:

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

Using a 6 month CD for laddering

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

Where can you open a CD account?

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

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

Gabby Hyman
Gabby Hyman |

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