Thursday, July 25, 2024

Want a risk-free investment that earns you more than 5% a year? Try these CDs.

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With interest rates at a record-high, some of the best CDs offer rates that top 5%. By signing up for a certificate of deposit (CD) or share certificate,  you can earn extra cash without extra risk. As long as your financial institution is covered by FDIC or NCUA insurance, your money is safe up to $250,000 per depositor. 

With a CD, you tie up your savings for a fixed term, and in exchange, you get a rate that beats what a traditional savings account offers. However, beware the early withdrawal penalty: If you tap your cash before the CD matures, you’ll be on the hook for a penalty typically worth a few months’ of interest.

If you’re ready to part with your cash and earn more, the Fortune Recommends™ editorial team has rated and ranked the best CDs.

The best CD rates: our top picks*

Institution Term length APY* Minimum opening deposit See details
Alliant Credit Union 12 months 5.15% $1,000 View offer
First Internet Bank 12 months 5.31% $1,000 View offer
EverBank 9 months 5.05% $1,000 Read review
Synchrony 6 months 4.90% $0 View offer
Marcus by Goldman Sachs 12 months 4.90% $500 View offer
MYSB Direct 12 months 5.20% $500 View offer
TAB Bank 12 months 5.27% $1,000 View offer
Capital One 360 12 months 4.80% $0 View offer
Discover 12 months 4.70% $2,500 Read review
Prime Alliance Bank 12 months 5.30% $500 View offer
Alliant Credit Union View offer
Term length 12 months
APY* 5.15%
Minimum opening deposit $1,000
First Internet Bank View offer
Term length 12 months
APY* 5.31%
Minimum opening deposit $1,000
EverBank Read review
Term length 9 months
APY* 5.05%
Minimum opening deposit $1,000
Synchrony View offer
Term length 6 months
APY* 4.90%
Minimum opening deposit $0
Marcus by Goldman Sachs View offer
Term length 12 months
APY* 4.90%
Minimum opening deposit $500
MYSB Direct View offer
Term length 12 months
APY* 5.20%
Minimum opening deposit $500
TAB Bank View offer
Term length 12 months
APY* 5.27%
Minimum opening deposit $1,000
Capital One 360 View offer
Term length 12 months
APY* 4.80%
Minimum opening deposit $0
Discover Read review
Term length 12 months
APY* 4.70%
Minimum opening deposit $2,500
Prime Alliance Bank View offer
Term length 12 months
APY* 5.30%
Minimum opening deposit $500

*Above rates are current as of April 24, 2024. Check out our complete methodology here.

Find the best CD for you

Use the widget below to find the CDs with the best rates in your area.

The 10 best CD rates overall

Here’s our rundown of the top 10 CDs according to our research, including the key figures you should know before you open an account. 

Note: APYs are updated daily, but are subject to change. Please refer to the website of each provider for the most up-to-date information.

Alliant Credit Union

Minimum opening deposit: $1,000

Term length APY
1-year certificate 5.15%
3-year certificate 4.20%
5-year certificate 4.00%

Founded in 1935, Alliant Credit Union is a not-for-profit credit union offering accounts—such as savings accounts and share certificates—and lending products like auto loans and mortgages. Membership eligibility is extended to current or former employees of Alliant’s partner organizations, or residents or workers in a Chicago-area community. You can also become a member by becoming an Alliant Credit Union Foundation digital inclusion advocate.

Learn More

Why we picked it

Alliant made our list because of its solid APYs and variety of customer support options. It offers the highest APY on a 1-year CD on our list, coming in at 5.15%.

However, you must be a member to start investing and need at least $1,000 to start.

If you choose Alliant as your financial home, it’s a digital credit union, so you won’t have access to physical branch locations. You will, however, be able to contact customer service via email, chat, or phone.

First Internet Bank

Minimum opening deposit: $1,000

Term length APY
1-year CD 5.31%
3-year CD 4.66%
5-year CD 4.55%

Why we picked it

First Internet has APYs that top 4% on all of the CDs we evaluated. Though you’ll need at least $1,000 to take advantage of these high APYs

Plus, if you ever need to contact customer service, First Internet Bank has stellar customer service even though it’s a digital bank with no physical locations: You can access customer service via email, chat, or phone.


Minimum opening deposit: $1,000

Term length APY
1-year CD 4.85%
3-year CD 4.20%
5-year CD 4.00%

Founded in 1998, EverBank, formerly known as TIAA Bank, is a Jacksonville-based bank offering CDs, high-yield savings accounts, checking accounts, and more.

  Read review

Why we picked it

Everbank stood out because of the wide range of term lengths and solid APYs it offers on its CDs. Customers can get an interest rate of close to 4% or higher on all of its CDs. But you’ll need to have a bit of a nest egg saved up to invest: the minimum opening deposit is $1,000.


Minimum opening deposit: $0

Term length APY
1-year CD 4.80%
3-year CD 4.15%
5-year CD 4.00%

Synchrony, once a part of General Electric Company, is now an independent bank offering a host of products like savings accounts, credit cards, and more.

  Learn more

Why we picked it

Regardless of what type of CD you’re looking for, Synchrony Bank has you covered—you’ll have a choice between traditional CDs, a bump-up CD, and a no-penalty CD. To get the most bang for your buck, opt for the 6-month CD, which offers a 5.15% APY. 

To get in touch with customer service, you can do so via phone call, live chat, or email.

Marcus by Goldman Sachs

Minimum opening deposit: $500

Term length APY
1-year CD 4.90%
3-year CD 4.15%
5-year CD 4.00%

Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and Goldman Sachs & Co. LLC (“GS&Co.”), which are subsidiaries of The Goldman Sachs Group, Inc. That means you get all the conveniences of a digital bank, backed by 150+ years of expertise.

  Learn more

Why we picked it

With a Marcus CD, you’ll get an APY of 4% or higher, regardless of which term length you choose. Currently, you’ll get the highest rate on their 14-month or 1-year CDs, but opting for a CD with a longer term means you can keep the interest flowing for months or even years to come. 

Before you invest, you’ll need at least $500. Make sure to note when your CD matures because it’ll automatically be renewed if you don’t withdraw your money.

MYSB Direct

Minimum opening deposit: $500

Term Length APY
1-year CD 5.20%
3-year CD 4.46%
5-year CD 4.31%

MYSB Direct, a.k.a. M.Y. Safra Bank, is headquartered in New York City and operates a single branch there. Its products include personal checking and savings accounts, lending services, and more.


*Note: the minimum deposit for the 13-month no-penalty CD is $5,000

Learn More

Why we picked it

MYSB Direct offers top-notch rates on CDs that come in a variety of term lengths, allowing you to select a maturity that aligns with your financial goals. Note that MYSB has one of the heftiest early withdrawal penalties, so be prepared to keep your hands off your money or pay up. 

MYSB Direct has one physical location in New York City, but you can reach customer service via email or phone.

TAB Bank

Minimum opening deposit: $1,000

Term length APY
1-year CD 5.27%
3-year CD 4.25%
5-year CD 4.00%

Established in 1998, Transportation Alliance Bank, Inc. (TAB Bank) is a tech-driven online bank that offers products and services designed to serve the needs of the underserved. Today, it provides a wide variety of services to individuals, families, and businesses.

  Learn more

Why we picked it

While you’ll need $1,000 to invest in one of TAB Bank’s CDs you can receive a whopping 5.27% APY on its 1-year CD. And if you choose a longer-term CD, you’ll still get an APY above 4%.

When it comes to customer service, you can reach out via phone call (6 a.m. to 7 p.m. MT Monday through Friday and 9 a.m. to 3 p.m. on Saturday) or a secure form on their site.

Capital One 360

Minimum opening deposit: $0

Term length APY
1-year CD 4.80%
3-year CD 4.00%
5-year CD 3.90%

Capital One is one of the largest banks in the country, headquartered in Virginia with a strong online presence as well as some physical branches across the country. Their online banking division is known as Capital One 360 and offers a host of products like checking accounts, CDs, and high-yield savings accounts.

  Learn more

Why we picked it

Whether you’re looking for a place to park your money for a few months or years, Capital One has you covered. The bank offers CDs with durations ranging from 6 to 60 months, and there’s no minimum opening deposit. Plus, if you really need your cash before the CD’s term is up, there’s a modest early withdrawal penalty.


Minimum opening deposit: $2,500

Term length APY
1-year CD 4.70%
3-year CD 3.75%
5-year CD 3.75%

Discover Bank is part of the Discover Financial Services company, which is primarily known for its credit card products. Discover Bank, however, offers a range of other financial services beyond just credit cards, including online deposit account options.

  Learn more

Why we picked it

Although Discover had the largest minimum opening deposit at $2,500, the company offers a broad range of CDs, with durations of up to 10 years. If you plan to invest in a Discover CD, go for a short-term CD: their 9-month, 12-month, and 18-month CDs all provide rates above 4%.

Prime Alliance Bank

Minimum opening deposit: $500

Term length APY
1-year CD 5.30%
3-year CD 4.25%
5-year CD 4.00%

Founded in 2004, Prime Alliance Bank is a Utah-based bank offering products like checking and savings accounts, CDs, and IRA CDs.

Learn More

Why we picked it

Currently, you can get a 5.30% APY on a 6-month CD. That means if you invested just $5,000 in a 12-month CD, you would earn roughly $265 in a year.

If you ever have trouble with your account, you can contact customer service via phone call or message form on the website.

Highest CD rates by term length

In most cases, financial institutions will vary the APY of a CD depending on the length of time you’re willing to deposit the money. While this doesn’t always mean you’ll earn a higher rate over a longer term, comparing products by term length is worth it to ensure you’re getting the most bang for your buck.

The tables in the collapsible drawers below show examples of top rates by term length. Information in the Notes columns will describe basic information about qualifications for these accounts, however, you should always refer to the institution itself for the most accurate information. Rates are updated weekly on Wednesdays.

Highest 1-month CD rates

Highest 3-month CD rates

Highest 6-month CD rates

Review our full list of the best 6-month CD rates.

Highest 9-month CD rates

Highest 1-year CD rates

Review our full list of the best 1-year CD rates.

Highest 18-month CD rates

Highest 2-year CD rates

Highest 3-year CD rates

Review our full list of the best 3-year CD rates.

Highest 4-year CD rates

Highest 5-year CD rates

Review our full list of the best 5-year CD rates.

Highest 10-year CD rates

Complete guide to CDs

There are several terms and strategies you should familiarize yourself with in order to develop a CD strategy that works well for you. Here are some of the basics:

What is a certificate of deposit?

With CDs, or certificates of deposit, customers receive a fixed interest rate in exchange for tying up their money for a fixed period. Interest is typically paid on a regular basis, either daily, monthly, or quarterly.

After a CD reaches maturity—or the end of its term—you can withdraw the money you deposited initially, plus any earned interest. If you tap your money before the CD’s term is up, most CDs charge an early withdrawal penalty which is usually worth a few days or months of interest.

Typically, upon maturity, your CD is automatically renewed. If you don’t want to roll over your money into a new CD, you’ll usually be given a grace period during which you can choose to withdraw your funds.

Types of CDs

There are various types of CDs you can choose from depending on how much money you’d like to deposit into your CD, whether you’d prefer to have access to your money before maturity, and more. A few of the most common types of CDs include: 

Brokered CDs

Brokered CDs are purchased and sold through a brokerage account, rather than through a bank or credit union. 

These CDs are usually issued by banks and then sold to brokerages, which then offer them to customers at higher APYs than traditional CDs. 

You’ll also get greater flexibility with a brokered CD: Rather than pay an early withdrawal penalty, you can access your cash early by selling your brokered CD on a secondary market. However, in doing so you open yourself to interest rate risk. 

If you sell your brokered CD after interest rates have risen, your CD, with a lower rate, will be less valuable to investors, and you may lose money when you sell it.

Some brokered CDs may have a call feature, too.

Callable CDs

Callable CDs have a call feature that allows the financial institution that issued them to terminate the CD before it reaches maturity. When this happens, the investor keeps the principal and any interest they accrued up to that point. 

Typically, a financial institution calls a CD when interest rates drop because it can offer lower interest rates on newly issued CDs. After your CD is called, you’ll have to reinvest your funds at a lower rate—this is known as reinvestment risk. Due to this risk, callable CDs usually offer higher APYs than CDs without a call feature.

Bump-up CDs

With a bump-up CD, you can request an APY on your CD if interest rates rise after you’ve opened your account. Typically, you’ll be eligible to increase the rate on your CD once or twice during the term.

No-penalty CDs

This type of CD does not charge a penalty for withdrawing funds before your CD reaches maturity. This type of CD is less common than other CD types and may also offer lower APYs than traditional CDs.

Compare: No-penalty CDs vs. savings accounts

Jumbo CDs

Jumbo CDs typically require a minimum opening deposit of at least $100,000 but usually offer higher APYs than traditional CDs. 

Variable-rate CDs

With a variable-rate CD, the APY fluctuates based on the interest rate. These CDs are riskier than traditional CDs because if interest rates drop before the CD reaches maturity, you’ll can receive a lower interest rate.

How are CD rates determined?

CD rates are set by your individual bank or financial institution. Although, there are several factors that can influence these rates.

This includes the length of your CD term (longer-term CDs usually offer higher rates than shorter-term ones) and type of CD, the amount of your initial deposit (some CDs offer tiered interest rates), benchmark interest rates set by the Federal Reserve, and temporary promotional offers offered by your financial institution. 

What is the APY on a CD?

APY stands for “annual percentage yield.” It’s a way to calculate the total amount of interest that you can earn on an investment such as a CD in one year, taking into account the effect of compounding interest.

The APY of a CD will depend on the interest rate offered by the bank or financial institution, the frequency of compounding (daily, monthly, annually, etc.), and the length of the term of the CD. As of early 2024, the best CD rates are over 5% but may fall over the course of the year as the Federal Reserve makes adjustments.

What are CD ladders and how do they work?

For savers who are on the fence about locking away their funds in a CD for an extended amount of time, you’re not alone. While some CDs offer terms that are just a few months long, other CDs take years to mature—usually, you earn a higher rate with these CDs, but you’ll have to part with your money for longer. 

One way to score the benefits of both short and long-term CDs is to set up a CD ladder. This is a savings strategy where you split your savings between several CDs of varying maturities. 

Here’s how a CD ladder works: If you want to invest $3,000, you would invest $1,000 each in three CDs of staggering maturities—let’s say 1-year, 2-year, and 3-year. When each CD matures, you reinvest that money in a 3-year CD. That way you have access to cash every year.  

Do I have to pay taxes on CD interest?

If you opt for a CD as your primary savings vehicle, you should be aware that interest earned on the funds you deposit are considered taxable interest by the IRS. The interest you earn is subject to federal and state income tax. 

Your financial institution will typically send you a 1099-INT statement for any interest earned over $10, and the amount you owe will depend on how much interest you’ve earned and your tax bracket.

If you withdraw funds from your CD early, you can also expect to see those penalties on your 1099-INT form.

Is a certificate of deposit considered a safe investment?

Certificates of deposit are considered safe investments so long as they are helped by FDIC- or NCUA-insured financial institutions which insure your deposits up to $250,000 per depositor, per bank, for each account ownership category or up to $250,000 per share owner, per insured credit union, for each account ownership category. 

How to choose the best CD 

Every CD is a little different, so you’ll want to pay close attention to the account features and fine print before deciding where to put your savings. You’ll want to consider a few factors when choosing a CD

  • Term length: Your CD’s term length tells you how long it takes to mature. CD term lengths can be as short as one week or as long as 10 years. Choose a term length that meets your needs and aligns with your financial goals. 
  • APY: The annual percentage yield on your account significantly affects how much your money will grow. The higher the rate, the more you can expect to earn in interest. Typically, the best CD rates are applied to longer term lengths.
  • Minimum deposit: Most, but not all, banks and credit unions require that you invest a minimum amount of money to open a CD. The minimum opening deposit can range from a few dollars to thousands. Most CDs require depositing a lump sum and don’t allow additional contributions. Make sure you can meet the minimum opening deposit requirement. 
  • Penalties: Not all CDs carry early withdrawal penalties, but if yours does, you could lose out on your earned interest and some of your principal balance. You may not be able to plan for an early withdrawal, but it’s good to know the penalty if you need to touch your money early. 
  • Deposit insurance: FDIC and NCUA insurance provides depositors with insurance coverage if their bank or credit union fails—up to $250,000 per depositor or share owner. Double-check that your account is insured to protect your money if there’s a bank failure

How to calculate CD earnings potential

To calculate your earnings from a CD, you’ll need to use the following formula: A = P(1+R/N)(NT). Where ‘A’ represents the value of your CD, including interest. ‘P’ is equal to your principal balance or initial deposit. ‘R’ represents your yearly interest rate, in this case it would be your APY. ‘N’ represents the compound frequency of your CD in a given year, and ‘T’ represents the number of years until your CD’s maturity date.

Pros and cons of CDs

While CDs can be attractive for their high interest rates, they aren’t a perfect fit for everyone. Let’s review some of the pros and cons.

Advantages of certificates of deposit

CDs offer many advantages for savers, including higher APYs and fixed rates, which may offer greater returns over time. Additionally, CDs are offered in a variety of terms, making it a viable option for savers with short- and long-term goals.

Disadvantages of certificates of deposit

CDs don’t offer the same liquidity as other savings accounts. Should you need to access your funds, you’ll likely be charged a penalty for doing so. Additionally, your overall returns upon your CD’s maturity date could be impacted if the inflation rate increases at a faster pace than your interest earnings.

Alternatives to CDs

CDs differ from other savings accounts in a few key ways. This type of account not only functions differently, but it may be better suited for a certain type of consumer who is saving for a goal with a specific timeline. 

  • Access to your savings: CDs don’t offer the same level of access to your savings that a traditional savings account or money market account would. Once you agree to your CD term, your money will sit, untouched, and accrue interest for the duration of your term until your CD hits maturity. Making a withdrawal early would result in an early withdrawal penalty
  • CDs usually offer higher APYs at a fixed rate: One of the major selling points for a CD account is that, typically, CDs offer a fixed APY at a higher rate than other types of savings vehicles. That means that you’ll be able to take advantage of a higher rate for an extended period of time, and you’ll have the peace of mind knowing that once you’ve locked in your rate, your APY won’t fluctuate during your term in response to external factors like federal funds rate increases.

CDs vs. high-yield savings accounts

High-yield savings accounts work in the same way as traditional savings accounts. It’s a deposit account at a credit union or bank that you can use for saving and earning interest on your money—usually at a higher rate. This type of savings account differs from CDs in that they offer greater access to your funds, rather than requiring you to lock away your funds for a set amount of time. As such, there’s no penalty for making withdrawals.

CDs vs. money market accounts

Money market accounts function as a hybrid between savings accounts and checking accounts. Similar to CDs, these accounts typically offer much higher APYs than checking accounts, but may still offer some of the same features including check writing, debit card access, and the ability to make withdrawals and deposits via ATM. Like a CD, this type of account may also be of interest to savers who have the ability to make a larger opening deposit. 

Read more: Compare CDs vs. money market accounts

CD rates by state

While many banks are available nationwide, there are also hundreds of smaller institutions that may only serve customers in a more localized region. Here are the banks in each U.S. state with the highest CD rates.

View CD rates in:

Our methodology

The Fortune RecommendsTM team compared certificates of deposit (CDs) from more than 45 major banks, credit unions, and online-only banks that offered one-, three-, and five-year CD terms. Our top picks are available to customers across the U.S. no matter where you’re located, subject to the terms of each CD. 

For our best overall CD rates, we ranked the best overall CDs in the following categories and weighted each category as outlined in the percentages below:

  • Number of terms offered (15%): When you opt for a bank or credit union that offers a wide array of CD terms, you have a greater chance of finding a CD that aligns with your investment horizon. We evaluated financial institutions based on the number of CD terms they provide. Banks with more CD terms ranked higher. 
  • Number of terms with above-average rates (60%): To determine which banks had the best rates, we looked at whether they offered above-average APYs on a wide range of term lengths.
  • Minimum deposit requirement (20%): To open a CD at any financial institution, the institution will require that you deposit a minimum dollar amount. We thought a lower minimum was preferable and rated banks with lower minimum deposit requirements higher. 
  • Customer service (5%): Top picks offer customers three ways to get in contact: chat support, by phone, or email. Among the three options, we gave phone support the most weight.

We think the best CDs offer APYs at least twice the national average for one-year, three-year, and five-year terms. We didn’t include brokered CDs on our list, which are riskier because they are sold on the secondary market through brokerages. 

CD rates, fees, and minimum deposit requirements may be limited-time offers, and APYs are subject to change. The FDIC or NCUA insures all the banks and credit unions on this list. Terminating your CD before it matures may incur a penalty fee, which varies by bank and credit union.

Frequently asked questions

In which situation would a certificate of deposit (CD) be the best banking choice?

A CD may be the best banking choice for you if you are saving for a long-term goal with a specific timeline in mind. To avoid early withdrawal penalties or potentially forfeiting any interest earned on the funds in your CD, you want to be sure that you won’t need access to your money before your CD’s maturity date.

What is the minimum balance for a certificate of deposit?

The minimum balance for a CD depends on your financial institution. The minimum may range from zero to thousands of dollars. 

Is it better to get a CD at a bank or at a credit union?

As long as you meet the membership requirements needed to join a credit union and verify that the financial institutions you’re considering are FDIC or NCUA members, both banks and credit unions offer similar products, including CDs. Rates will vary across the board.

Can you add money to a CD?

When you invest in a CD, you typically deposit one lump sum and then leave it alone until the account reaches maturity. However, some financial institutions offer special types of “add-on” CDs that allow you to deposit additional funds after the initial deposit. The amount and frequency of deposits you’re allowed to make depend on the particular account.

Are CDs good during inflation?

CDs can be a good investment when inflation is high, but since interest rates tend to rise and fall with the inflation rate, you might be breaking even when you account for taxes, too. 

For example, when inflation is high, the Federal Reserve will raise interest rates to curb demand and reduce inflation. While you’ll score a higher APY on a CD, the high inflation rate could wipe out most of the returns you get from the CD. 

Note that since CDs usually offer higher interest rates than checking accounts and traditional savings accounts, CDs can help you better outpace inflation than other deposit accounts. Plus, you can lock in rates with CDs.

Are short-term or long-term CD rates better?

Generally speaking, long-term CDs offer higher interest rates than short-term CDs—think of it as a reward for committing your money for a longer period. However, this is not always the case. When the yield curve inverts, short-term CDs boast higher rates than long-term CDs. 

Overall, whether it’s better to choose a short-term or long-term CD depends on your goals and the current interest rate environment. Learn more about how to invest in CDs in our guide.

What is considered a good CD rate?

A “good” CD rate can be somewhat subjective. That’s because you need to strike a balance between the best rate available and the longest amount of time you can afford to keep your money tied up. For example, if you find a CD offering 5% APY, but it requires you to keep your money on deposit for five years, the interest rate may not be worth it. You might need your money sooner, or rates could go higher while you’re stuck earning a lower return.

Generally, a CD rate that’s above the national average is a solid choice. Before deciding if a CD is worth it, compare accounts from multiple banks and see which one offers the highest rate for the term length you want.

Is now a good time to lock in a CD?

CD rates are the highest they’ve been in years. So yes, it’s a good time to put your money in a CD.  Fed officials have indicated they’re done raising rates with plans to start cutting rates later this year. It’s likely that CD rates have reached their peak, so you’ll want to lock in rates while they last.

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