While we often see splashy rates on CDs — some touting well over 5% (see some of the highest-paying CDs here) — those rates are often only available to a select group of people or only for a small amount of money. No thanks. Plus, the average APY as of Oct. 16 was just 1.79% APY for 12-month CDs, according to government data. Again, no thanks.
That’s why we’ve analyzed CD reviews and rankings from 10 of the most trusted financial sites in America — Money, Bankrate, Business Insider, NerdWallet, Fortune, Time, CNET, Kiplinger, SmartAsset and WalletHub — to determine which certificate of deposit providers were recommended the most. Our ranking, which we will update each month, will include the CDs with the best rates, most competitive offers and least hurdles to gain access.
Winner: 5 best-of awards
Annual percentage yield (APY): 4.50%-5.50%
Terms/annual percentage yield (APY): 6 months to 5 years
Minimum deposit required: $0, however depositors must fund the account within 10 calendar days or it will automatically close
Maximum deposit required: None
Early withdrawal penalty: 11 months or less results in 90 days interest charge, while those closed after 12 months are charged 180 days interest
Pros
- No minimum deposit required
- Up to 5-year terms available
Cons
- No physical branch locations
- Limited customer service options, but reachable by phone
Winner: 5 best-of awards
Annual percentage yield (APY): 4.65%-5.60%
Terms: 1-5 years
Minimum deposit required: $1,500
Maximum deposit required: $1 million per account and $10 million limit per customer
Early withdrawal penalty: Terms less than one year face a penalty of 90 days simple interest; terms from 12 months to three years face 180 days simple interest penalty and terms four years and above face a 365-day simple interest penalty
Pros
- Long-term CDs available
- CD laddering option available
Cons
- High $1,500 minimum deposit requirement
- Fees for paper statement requests, wire transfers and checks
Winner: 4 best-of awards
Annual percentage yield (APY): 4.65%-5.67%
Terms: 3 months to 5 years
Minimum deposit required: $10,000
Maximum deposit required: None
Early withdrawal penalty: Terms less than 91 days face a fee of 89 days simple interest; terms equal or greater than 91 days or less than 12 months fae a 120-day simple interest fee; terms equal or greater than 36 months but less than 60 months face a 365-day simple interest fee; and terms equal or greater than 60 months face a 730-day simple interest fee.
Pros
- 24/7 access from desktop and mobile
- Automatic renewal maintains original terms and at market rate
Cons
- High opening $10,000 opening deposit requirement
- No physical locations
Winner: 3 best-of awards
Annual percentage yield (APY): 4.30%-5.30%
Terms: 3 months to 5 years
Minimum deposit required: $1,000, and $75,000 for jumbo CDs
Maximum deposit required: None
Early withdrawal penalty: 17 months or less face a penalty of up to 90 days dividends, 18-24 months face a penalty of up to 120 days of dividends, and 24-48 or 60-months face a penalty of 180 days of dividends.
Pros
- IRA products are also available
- Jumbo CDs come with relatively low $75,000 minimum
- Alliant makes $5 donation to Foster Care to Success on your behalf
Cons
Winner: 3 best-of awards
Terms/annual percentage yield (APY): 4.30%-5.05%
Terms: 6 months to 5 years
Minimum deposit required: $500
Maximum deposit required: None
Early withdrawal penalty: 12 month terms or less lose all interest; 12-24 month terms face 1-year of interest; and 24 months or more face a 24 month interest penalty.
Pros
- Relatively low opening deposit requirement
- Bitcoin, checking, rewards checking and high-interest checking account options available
- No monthly fees
Cons
- High early withdrawal penalties
Winner: 3 best-of awards
Annual percentage yield (APY): 3.00%-5.15%
Terms: 3 months to 5 years
Minimum deposit required: None
Maximum deposit required: None
Early withdrawal penalty: Terms less than 24 months face a 60 days interest penalty, 25-36 months face a 90 day interest penalty, 37-48 months face a 120 interest penalty. 49 months or more face a 150 day interest penalty and 11-month term is a no-penalty CD after the first 6 days from funding. All CD terms renewed prior to Dec. 7, 2013 face a 60 day interest penalty.
Pros
- No opening deposit requirements
- No maximum deposit limit
- 0.05% loyalty reward for renewing
Cons
- No penalty CD available only comes with 11-month term
Winner: 2 best-of awards
Annual percentage yield (APY): 3.00%-5.15%
Terms: 3 months to 5 years
Minimum deposit required: None
Maximum deposit required: None
Early withdrawal penalty: Terms of 12 months or less face a 90 days simple interest penalty; terms from 12-48 months face a 180 days simple interest penalty; while those with terms that exceed 48 months face a 365 day simple interest penalty for an early withdrawal.
Pros
- Additional deposits can be made within a 10-day grace period
- High APY
- No minimum or maximum balance restrictions
Cons
Winner: 3 best-of awards
Annual percentage yield (APY): 4.40%-5.50%
Terms: 1-5 years
Minimum deposit required: $500
Maximum deposit required: $500,000
Early withdrawal penalty: No withdrawals can be made within the first 30 days.
Pros
- Relatively low $500 opening balance requirement
- ACH and Plaid Funding available
Cons
- $500,000 maximum deposit limit
Winner: 2 best-of awards
Annual percentage yield (APY): 3.25%-6.00%
Terms: 3 months to 10 years
Minimum deposit required: $500
Maximum deposit required: None
Early withdrawal penalty: 90 days of interest for 3-month terms; 180 days of interest for 6-month terms; 270 days of interest for 12-month terms; 365 days of interest for 36-month terms; 730 days of interest for 60-month terms; 1,095 days of interest for 84 or 120 month terms.
Pros
- High APY available
- Low minimum deposit requirement
Cons
- Must become a member
- High early withdrawal penalties
Winner: 2 best-of awards
Annual percentage yield (APY): 3.91%-5.76%
Terms: 1-5 years
Minimum deposit required: $5,000 for regular certificates and $100,000 for jumbo certificates
Maximum deposit required: None
Early withdrawal penalty: Terms of 12 months or less face a 90 day dividend penalty; those with terms from one to five years face a penalty of 180 days worth of dividends, while those with terms greater than five years may impose a penalty of 365 days of dividends.
Pros
- No checking account required
- High rates
- Bump-up CD option allows depositors to add to the principal balance and increase APY during the term
Cons
- High $5,000 minimum deposit requirement
- Dividends are credited quarterly
- Must become a member to join.
Methodology for choosing CD accounts
Every month, our team scours the internet in search of certificate of deposit recommendations from some of the leading financial sites in America, including Money, Bankrate, NerdWallet, Business Insider, Fortune, Time, CNET, Kiplinger, SmartAsset and WalletHub.
We read reviews on each site, and then rank these accounts based on the total number of recommendations. Winners are determined by the number of times they appear on any of these lists. Simply put, banks that appear the most will be deemed the winner. In the event of a tie, we select our choice for the account with the best deal.
Frequently asked questions (FAQs):
What is a certificate of deposit?
A certificate of deposit, or CD, is a savings product offered by banks and credit unions that typically pays a predetermined interest rate on a depositor’s set amount of cash over a specified period of time, or term. Terms end on what’s referred to as a CD’s maturity date, which can range from as little as 30 days to five years, or more, depending on the offer.
How much can I earn with a certificate of deposit?
Let’s say the CD you’ve chosen to deposit your money into for a 12-month term pays 5% APY. Savers here who invest $10,000 would stand to earn $500 at the end of the term. Those that pay just 1% would earn $100 for the period.
How do certificates of deposit stack up against other similar products?
High-yield savings accounts vs. CDs
Interest rates on many of the highest-paying high-yield savings accounts are upwards of 4% as of October 2023. See some of the highest rates you can get on a high-yield savings account here. The leading CDs meanwhile can come with comparable, if not higher rates.
However, unlike CDs, savings accounts do not have fixed term requirements to earn this relatively high rate. That said, interest rates can fluctuate, so if depositors were to open a savings account and rates start to decline, their earning potential would then diminish in the process. CDs, on the other hand, would guarantee the promised rate for those who remain invested during the full term.
Money-market accounts vs. CDs
Money-market accounts generally come with larger minimum balances than typical savings or high-yield accounts. Unlike CDs, however, these accounts are more liquid and often allow a certain number of withdrawals and transfers per statement cycle. Another key difference from CDs is that money-market accounts allow customers the ability to write checks and access their cash throughout the life of the account.
Index funds
When it comes to holding cash for a short-term period or a near-term horizon, CDs offer a set and predictable rate of return based on their predetermined interest rate. If you’re planning on holding your money for a longer-term period, like say for five years or more, you may want to also consider investing your money in an index fund.
These are essentially baskets of securities designed to follow a benchmark index, such as the S&P 500 or Nasdaq 100, and can deliver sizable long-term gains. While funds like the SPDR® S&P 500 ETF Trust, or SPY, had a loss last year of 18.17%, it has delivered a 5-year gain of 11.02% and 10-year return of 12.43%, as of Sept. 8, 2023, according to Morningstar.
Are certificates of deposit safe?
As long as you open an account that is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Association (NCUA), then your money is protected, up to certain limits. The government agencies insure up to $250,000 per depositor, per insured bank, for each account ownership category. In some cases, such as robo advisers for instance, these accounts may offer an even higher rate of protection. Just be sure to read the fine print to ensure your money is safe.
How do I choose the best certificate of deposit?
Deciding which CD is best for your financial plan can be challenging; however, researching various financial institutions offering them on news sites and rankings can help provide some clear options that may or may not fit with your needs.
Be sure to read all of the fine print to ensure you qualify for either the CD or the financial institution’s membership requirements, if needed. Ensure you are prepared to stay invested throughout the full term that aligns with the rate you are hoping to achieve; this will help you avoid early withdrawal fees. Weighing all of these various factors will help determine the best CD for you.
How often do certificate of deposit rates change?
One factor you should be aware of before opening a certificate of deposit is that interest rates are typically fixed. That means that although CD earnings rates do not change during the length of the term, rates are set at the time of starting your first account, or when you renew. These rates are often determined by the federal funds rate, which is set by the Federal Open Market Committee (FOMC), the government agency responsible for setting monetary policy for the Federal Reserve.
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