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Best CD Rates

CD Rates for Both Short- and Long-Term Savings Goals

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We review more than 150 banks and credit unions each weekday to find the best certificates of deposit (CD) rates available nationwide. The top picks have the highest rates for a particular term based on annual percentage yield (APY) and are available to the public.

We also look at certificates of deposit with slightly shorter and longer terms than each category we’ve named to determine the overall best CD rate within a range. For example, for the best 3-month CDs we considered products with terms of two to four months.

When multiple banks or credit unions offer the same rate, we favor those with the lowest minimum deposit and friendly early-withdrawal policies. We track APYs daily but re-evaluate the list weekly, and all accounts that make our list are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Administration.

Scroll down for the top CD rates available as of Jan. 13, 2023.

Best CD Rates of January 2023

Best CD Rates

Best 3-Month CDs (2–4 months included) APY Minimum Deposit Early Withdrawal Penalty
Popular Direct 4.05% $10,000 3 months of interest
Luana Savings Bank 3.41% $1,000 3 months of interest
United Texas Bank 3.40% $1,000 3 months of interest
For more, see our best 3-month CD rankings
Best 6-Month CDs (5–9 months included) APY Minimum Deposit Early Withdrawal Penalty
Magnifi Financial (7 months) 5.00% $25,000 3 months of interest
NASA Federal Credit Union (9 months) 4.60% $10,000 All interest earned (182 days maximum)
Popular Direct 4.50% $10,000 4 months of interest
For more, see our best 6-month CD rankings
Best 1-Year CDs (10–14 months included) APY Minimum Deposit Early Withdrawal Penalty
Merchants Bank of Indiana 4.86% $1,000 3 months of interest
INSBANK Online 4.85% $2,500 6 months of interest
North American Savings Bank (13 months) 4.76% $5,000 3 months of interest minimum (complex formula; exercise caution)
For more, see our best 1-year CD rankings
Best 18-Month CDs (15–20 months included) APY Minimum Deposit Early Withdrawal Penalty
Pen Air Federal Credit Union 5.02% $500 6 months of interest
UNIFY Financial Credit Union (15 months) 5.00% $500 3 months of interest
Pasadena Federal Credit Union (15 months) 5.00% $1,000 180 days of dividends
Best 2-Year CDs (21–29 months included) APY Minimum Deposit Early Withdrawal Penalty
Merchants Bank of Indiana 4.86% $1,000 6 months of interest
Dover Federal Credit Union 4.80% $500 6 months of interest
Mountain America Credit Union 4.75% $500 6 months of interest
For more, see our best 2-year CD rankings
Best 3-Year CDs (30–41 months included) APY Minimum Deposit Early Withdrawal Penalty
Merchants Bank of Indiana 4.86% $1,000 6 months of interest
Crescent Bank 4.65% $1,000 6 months of interest
CFG Bank 4.60% $500 6 months of interest
For more, see our best 3-year CD rankings
Best 4-Year CDs (42–53 months included) APY Minimum Deposit Early Withdrawal Penalty
NASA Federal Credit Union (49 months) 4.75% $10,000 All interest earned (12 months maximum)
Lafayette Federal Credit Union 4.58% $500 16 months of interest
BMO Harris (45 months) 4.50% $5,000 545 days of interest
Best 5-Year CDs (54–66 months included) APY Minimum Deposit Early Withdrawal Penalty
Lafayette Federal Credit Union 4.63% $500 20 months of interest
CFG Bank 4.60% $500 6 months of interest
Popular Direct 4.55% $10,000 24 months of interest
For more, see our best 5-year CD rankings
Best 10-Year CDs (114–120 months included) APY Minimum Deposit Early Withdrawal Penalty
Discover Bank 4.40% $2,500 24 months of interest
Apple Federal Credit Union 4.00% $500 All dividends earned (1,095 days maximum)
Credit Human 3.15% $500 1,095 days of interest ($50 minimum)
For more, see our best 10-year CD rankings

Best 3-Month CD : Popular Direct

As a digital branch of Popular Bank, a full-service bank in the U.S., Puerto Rico, and the Caribbean, Popular Direct has more than 120 years of history. It is a subsidiary of Popular Inc. Popular Direct is focused on savings and CD accounts with CD terms ranging from three months to five years, and you can rest easy knowing your deposits are FDIC-insured.

Customers can manage accounts online or through an app available for both Android and Apple devices.

For more information on the banks and credit unions offering the best 3-month and 6-month rates, see our lists of the best 3-month CD rates and the best 6-month CD rates.

Best 6-Month CD : Magnifi Financial

Magnifi Financial is a credit union founded in 1939 and headquartered in Melrose, Minnesota. While it is a state-chartered credit union, it is federally insured by the National Credit Union Administration. Membership is available to anyone who makes a $10 donation to the Magnifi Foundation, which supports community causes in the communities Magnifi serves.

Accounts can be managed online or through an app for Android and Apple devices, and Magnifi also is part of the MoneyPass network of ATMs. The credit union has more than 20 branches in Minnesota.

Best 1-Year, 2-Year, and 3-Year CDs : Merchants Bank of Indiana

Founded in 1923 as Greensfork Township State Bank, Merchants Bank has six locations in central and eastern Indiana. It acquired Symphony Bank in 2009 and took its current name a few months later. The bank is a subsidiary of Merchants Bancorp, headquartered in Carmel, Indiana, which also includes Merchants Capital Corp., Farmers-Merchants Bank of Illinois, and Merchants Capital Servicing LLC.

In addition to CDs, Merchants Bank offers an array of personal and business banking products. It offers home loans through its Merchants Mortgage division. Those who don’t live near one of its branches can open and manage accounts online or via an app available for Android and Apple devices.

For more information on the banks and credit unions offering the best 1-year, 2-year, and 3-year rates, see our lists of the best 1-year CD rates, the best 2-year CD rates, and the best 3-year CD rates.

Best 18-Month CD : Pen Air Federal Credit Union

Founded in 1936, Pen Air Federal Credit Union is the largest and oldest local credit union in Pensacola, Florida. Though there are only 15 locations in Northwest Florida and Southeast Alabama, there are more than 114,000 members nationwide.

In addition to CDs ranging in terms from three months to five years, Pen Air also offers personal and business savings and checking accounts, along with various other types of accounts and lending products.

It may be easier to join Pen Air Federal than some of the other credit unions on this list, as all you need is to join the Friends of Navy Marine Corps Relief Society if you don’t have the other affiliations listed on the Pen Air website. There’s no fee to join because Pen Air will make a $1 donation to the organization for you. You’ll also need to make a $25 deposit in a savings account to join.

Best 4-Year CD : NASA Federal Credit Union

Started in 1949 by members of the scientific community, NASA Federal Credit Union serves over 177,000 members nationwide. Anyone can join the credit union by becoming a member of the National Space Society. You can join via the NASA Federal Credit Union application page, and your first year of membership is complimentary. Members are also required to sign up for a primary savings account with a minimum deposit of $5.

Best 5-Year CD : Lafayette Federal Credit Union

Lafayette Federal Credit Union is based out of Rockville, Maryland, and it operates just eight branches scattered around the Washington D.C. area. It’s a full-service credit union, and you can choose from variable-rate and fixed-rate certificates depending on what tickles your fancy.

If you don’t qualify for membership through other means (such as living in the area or working for certain employers), you also can become a member by first joining the Homeownership Financial Literacy Council for $10. You also must keep a $50 balance in a savings account.

Best 10-Year CD : Discover Bank

With a popular credit card that dates back to 1985, Discover Bank is practically a household name in personal finance. The card issuer purchased Greenwood Trust Company, founded in 1911, and renamed it Discover Bank in 2000. Discover Bank’s only branch is still in Greenwood, Delaware, but customers have access to over 60,000 fee-free ATMs.

Discover Bank customers have access to a broad lineup of services, including online CDs, checking, savings, and money market accounts. Discover Bank also offers loans and credit cards.

For more information on the banks and credit unions offering the best 10-year rates, see our list of the best 10-year CD rates.

Frequently Asked Questions

What Is a CD?

A CD is a “time deposit” that pays a fixed interest rate for a specific length of time. For most people, a CD is an account that you use at a bank or credit union, but you can also purchase CDs through brokerage accounts. Either way, you select a length of time to invest in the CD, and you earn interest during that time.

How Do CDs Work?

A CD holds your money for a specified length of time (such as six months or two years), and your bank or credit union pays you interest based on the amount of your deposit and the length of the term.

When you use a CD, you typically commit to leaving your money in the account. In return for that commitment, banks usually pay higher interest rates than they do in more liquid savings accounts. But if you need your money before the term ends, you may have to pay an early withdrawal penalty.

How Do Early Withdrawal Penalties Work?

Banks and credit unions often penalize you for withdrawing funds from a CD before the term is up. In many cases, they calculate the penalty as a certain number of months’ worth of interest. For example, Discover Bank charges six months’ worth of interest if you pull out of a 1-year CD early. That penalty increases to 18 months’ worth of interest on 5-year CDs.

Paying a penalty is never fun, and it can be particularly problematic when you cash out early in the term. Depending on how long your money stays in a CD, you might even receive less back than you originally deposited.

What Are the Pros and Cons of CDs?

CDs often pay higher interest rates than you can earn in a savings account. Banks and credit unions tend to pay more when you agree to lock up your money for a specific length of time. Plus, if interest rates fall and the bank pays new customers lower rates, you keep earning the same higher APY throughout the term of your CD.

To earn a higher rate, however, you need to commit to leaving your money with the bank. Pulling out early may result in early-withdrawal penalties, which can wipe out your earnings. Also, if interest rates rise, you may be stuck with a comparatively low rate until your CD matures.

  • Higher interest rates than savings accounts

  • Earnings won’t change if interest rates drop

  • Must lock up your money

  • Potential early withdrawal penalties

  • Might get stuck with a low rate while other interest rates rise

How Can You Manage Risks?

To help reduce your risk, some banks offer liquid CDs that allow you to withdraw funds early or request a rate increase. But there’s no such thing as a free lunch. Those products might start with lower rates than standard CDs, which is only fair, considering you can get out easily. More on that in the No-Penalty CD section below. You can also use a laddering strategy to manage some of the challenges that come with investing in CDs.

What Is a CD Ladder?

A CD ladder is a set of multiple CDs you purchase with different maturity dates, which helps you avoid locking up all of your money at once. With that approach, you might purchase a series of CDs with maturities in six-month increments. As a result, you periodically have cash available for planned (and unplanned) needs, or you can buy a new CD at the going rate. For example, if you have $10,000 to put into CDs, you might invest the following:

  • 6-month CD: $2,500
  • 12-month CD $2,500
  • 18-month CD $2,500
  • 24-month CD: $2,500

Ideally, every time one of these CDs matures, you would buy a new 24-month CD with the proceeds to begin the cycle again.

Rates might be higher or lower when you reinvest into a new CD, but constantly cycling your money could still have benefits. You maintain flexibility and avoid putting all of your money into long-term CDs at a bad time.

Is Money Safe in a CD?

When your funds are federally insured, they’re safe from bank and credit union failures. There may be a brief delay in receiving your money (or no delay at all) immediately following a bank failure, but when you’re using CDs, you’re probably weren’t planning to use the funds immediately anyway. To verify that your cash is protected, look for the following types of coverage:

  • FDIC insurance at banks
  • NCUA coverage at federally-insured credit unions

Both of these programs insure your money up to $250,000 per depositor, per institution, so it’s critical to keep your balances below the insured limits. You might be able to have more than $250,000 insured at one place, depending on how your accounts are titled.

What Influences CD Rates?

Several factors affect how much you earn from a CD. For starters, banks decide how competitive they want to be. If they have an appetite for new customers, they may nudge rates higher. Economic factors also influence CD rates. As rates rise or fall in financial markets, savings and CD rates tend to move in synchrony, although they might not react immediately (especially when it’s time to pay you more).

The length of your CD is critical. In general, you might expect longer-term CDs to pay more because you’re taking more risk—you’re committing to more months or years of unknowns. But the relationship is not always as direct as you might think. For example, if banks think rates might fall in the next several years, long-term CDs might pay rates that are similar to (or lower than) 1-year and 2-year CDs.

As a rule of thumb, long-term CDs have higher rates than short-term CDs. Still, it’s worth comparing rates from several banks for any terms you’re interested in.

What Should You Look for in a CD?

As you shop among banks, find a CD that’s the best fit for your finances. Pay careful attention to the features below.

  • Interest rate: The higher the rate, the faster your money grows. The easiest way to compare rates is to use the annual percentage yield (APY), which banks typically provide for you. That quote takes compounding frequency into account and helps you make an apples-to-apples comparison.
  • Minimum deposit: How much do you need to invest to use a CD? Some banks do not set any minimum, while others might require more than $1,000 to get started.
  • Fees: Monthly fees in CD accounts are rare, but it's smart to verify that you won't pay additional charges to use a CD. Anything you pay will reduce your earnings.
  • Joining fees: All of the credit unions we include on our best CD lists are available nationwide, but sometimes you’re required to make a donation to an organization in order to join the credit union. This fee is usually small, but it’s one more hoop you have to jump through to get the CD.
  • Penalties: Examine the early-withdrawal penalties, and evaluate how likely it is that you’ll need to cash out early. Weigh the pros and cons of liquid CDs.

Calculate how much extra you can earn by getting the highest rate available, and decide if that’s what you really need. If you have a relatively small account balance, a difference of a few tenths of a percent may not make much difference and there may be other factors that are more important to you.

As you compare banks, you may notice language about compounding frequency (daily or monthly compounding, for example). All other things being equal, more frequent compounding is best. But you can ignore those details by simply comparing each bank’s APY, which includes compounding.

What Is a No-Penalty CD?

Some CDs allow you to withdraw money before maturity. These “no-penalty” or “liquid” CDs can provide flexibility for unexpected expenses and other situations. For example, you might be allowed to withdraw 100% of the money you deposit after six days, but the account pays a guaranteed rate of interest for 11 months.

What’s the catch? In many cases, no-penalty CDs start at a lower rate than standard, inflexible CDs. You enjoy the benefit of flexibility, and the bank has less certainty about how long it can use your money. As a result, you earn slightly less.

Do You Have to Pay Taxes on Interest From CDs?

You typically have to pay tax on the interest you earn from CDs in taxable accounts, including joint accounts, individual accounts, and other types of accounts. If you use CDs in a retirement account, such as an IRA, you generally would not pay taxes on the earnings each year—but you might owe taxes when you take distributions from that account.

What Are Some Alternatives to CDs?

CDs are excellent tools for growing your money, but other products from banks and credit unions might also do the job.

Savings accounts provide more flexibility when you need money, but they don’t have fixed rates. That can work in your favor when rates rise. But if rates fall or remain stagnant, you might be better off in a CD.

Money market accounts are similar to savings accounts, but they may make it easier to spend money from your account. Some money market accounts provide a debit card or checkbook for spending, while others may require you to move your savings to a checking account before you spend.

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Article Sources
  1. Discover Bank. "Certificate of Deposit."

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