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- Certificates of Deposit
CD Rates for Both Short- and Long-Term Savings Goals
By
The Balance Editors
The Balance Editors
We’re a team of writers and editors with decades of experience researching and answering questions about personal finances. We believe everyone should feel confident when making money decisions, and that passion drives us to make The Balance the best place to learn about finances.
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Updated on June 27, 2024
Reviewed by
Michael J Boyle
Reviewed byMichael J Boyle
Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.
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Fact checked by
Hans Jasperson
Fact checked byHans Jasperson
Hans Jasperson has over a decade of experience in public policy research, with an emphasis on workforce development, education, and economic justice. His research has been shared with members of the U.S. Congress, federal agencies, and policymakers in several states.
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We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more. 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 June 27, 2024. Best CD Rates of June 2024 Best CD Rates of June 2024 Frequently Asked Questions TotalDirectBank is a division of City National Bank of Florida, which originally was established as North Shore Bank in 1946. TotalDirectBank keeps the product lineup simple, with money market accounts and CDs with terms of up to five years. Anyone in the U.S. (except those in Florida, Puerto Rico, American Samoa, Guam, Northern Mariana Islands, and U.S. Virgin Islands) can open a money market or CD account. INOVA Federal, headquartered in Elkhart, Indiana, has six branches in Indiana and one in Berkeley, California. It also is part of the CO-OP network of shared branches and ATMs. The credit union was established in 1942 for the employees of Miles Laboratories. If you’re not eligible for membership through your employer, you can join by joining the Tru Direction Financial Literacy Program with a $5 donation. You also must keep $5 on deposit at the credit union. INOVA Federal offers personal and business accounts, loans, credit cards, insurance products, and CDs with terms from 30 days to six years. In operation for nearly a century, Nuvision Federal Credit Union is based in southern California and was originally the credit union of Douglas Aircraft. It offers loans and credit cards along with checking, savings, and money market accounts, IRAs, and CDs with 3-month to 5-year terms. You can join the credit union if someone in your household is a member, you’re an employee of Boeing or another employer in the Select Employer Group, or you’re willing to join the American Consumer Council for as little as $8. DR Bank was founded in 2006 in Connecticut, where it still operates two branches. The bank offers all standard banking products. Accounts are available nationally through digital banking. Credit Human was formed in San Antonio, Texas, in 1935 to serve members of the National Federation of Federal Employees Local #28 union. It took the name Credit Human in 2016. The credit union has several branches throughout Texas, but members nationwide can access their accounts through online banking, a mobile app, or through CO-OP's shared branching network. Credit Human is not part of a fee-free ATM network. Membership is available nationwide to anyone who joins the American Consumer Council, and Credit Human agrees to pay the fee to join the ACC. Vibrant Credit Union is based in Moline, Illinois, and was started in 1935 by eight people as Deere Harvester Credit Union. It has branches in Illinois, Iowa, and Indiana, but membership is available to anyone nationwide who opens a savings account with a minimum $5 deposit. Online banking is available, and the credit union also has a mobile app compatible with both Android and Apple devices. Account holders also can manage their accounts at shared branches that are part of the CO-OP network. Wellby Financial was founded in Houston, Texas, in 1961 to support employees of the Johnson Space Center and its mission to the moon. Since then, it has grown to have 125,000 members and hold $2.49 billion in assets. Anyone is eligible to join the credit union through membership in the American Consumer Council. BMO Alto is an online-only division of BMO Harris, which is a U.S. subsidiary of Bank of Montreal, the eighth-largest bank in North America. BMO has been around for over 200 years. It offers a full line of personal and business banking products and services, including checking, savings, retirement accounts, mortgages, credit cards, lines of credit, and more. 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. 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. 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. 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. Pros Higher interest rates than savings accounts Earnings won’t change if interest rates drop Cons Must lock up your money Potential early withdrawal penalties Might get stuck with a low rate while other interest rates rise 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. 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: 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. 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: 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. 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. As you shop among banks, find a CD that’s the best fit for your finances. Pay careful attention to the features below. 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. 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. 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. 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. Article Sources City National Bank. "History." TotalDirectBank. "Leverage Our Financial Strength and Stability." TotalDirectBank. "FAQs." Discover Bank. "Certificate of Deposit." Internal Revenue Service. "Topic No. 403, Interest Received." Internal Revenue Service. "Topic No. 451, Individual Retirement Arrangements (IRAs)." Newsletter Sign Up Newsletter Sign Up We and our 100 partners store and/or access information on a device, such as unique IDs in cookies to process personal data. You may accept or manage your choices by clicking below, including your right to object where legitimate interest is used, or at any time in the privacy policy page. These choices will be signaled to our partners and will not affect browsing data. Store and/or access information on a device. Use limited data to select advertising. Create profiles for personalised advertising. Use profiles to select personalised advertising. Create profiles to personalise content. Use profiles to select personalised content. Measure advertising performance. Measure content performance. Understand audiences through statistics or combinations of data from different sources. Develop and improve services. Use limited data to select content. Best CD Rates of June 2024
Best 3-Month CDs (2–4 months included) APY Minimum Deposit Early Withdrawal Penalty TotalDirectBank 5.51% $25,000 1 month of interest Merrick Bank 5.40% $25,000 3 months of interest Bask Bank 5.35% $1,000 3 months of interest Best 6-Month CDs(5–9 months included) APY Minimum Deposit Early Withdrawal Penalty INOVA Federal Credit Union 5.55% $200 90 days of dividends TotalDirectBank 5.51% $25,000 1 month of interest My Banking Direct (5 months) 5.50% $2,500 1 month of interest Best 1-Year CDs(10–14 months included) APY Minimum Deposit Early Withdrawal Penalty Nuvision Federal Credit Union (10 months) 6.00% $1,000 3 months of interest Paramount Bank (11 months) 5.55% $1,000 3 months of interest NexBank 5.40% $25,000 6 months of interest Best 18-Month CDs(15–20 months included) APY Minimum Deposit Early Withdrawal Penalty DR Bank (15 months) 5.25% $500 180 days of interest NASA Federal Credit Union (15 months) 5.25% $10,000 All interest up to 182 days State Department Federal Credit Union (15 months) 5.20% $500 All interest up to 180 days Best 2-Year CDs(21–29 months included) APY Minimum Deposit Early Withdrawal Penalty Credit Human 5.10% $500 Greater of $50 or 270 days of interest Heartland Credit Union 5.00% $500 180 days of dividends West Town Bank & Trust 5.00% $10,000 3 months of interest Best 3-Year CDs(30–41 months included) APY Minimum Deposit Early Withdrawal Penalty Vibrant Credit Union 5.00% $5 All interest earned DollarSavingsDirect 5.00% $1,000 6 months of interest Transportation Federal Credit Union 5.00% $1,000 6 months of interest Best 4-Year CDs(42–53 months included) APY Minimum Deposit Early Withdrawal Penalty Wellby Financial 4.86% $1,000 12 months of interest BMO Alto 4.70% $0 180 days of interest Credit Human 4.65% $500 Greater of $50 or 365 days interest Best 5-Year CDs(54–66 months included) APY Minimum Deposit Early Withdrawal Penalty BMO Alto 4.80% $0 180 days of interest Grow Financial Federal Credit Union 4.75% $500 6 months of interest Credit Human 4.65% $500 Greater of $50 or 365 days interest Best 10-Year CDs (114–120 months included) APY Minimum Deposit Early Withdrawal Penalty Credit Human 4.05% $500 Greater of $50 or 1,095 days of interest First National Bank of America 4.00% $1,000 18 months of interest Apple Federal Credit Union 3.81% $500 All earned interest; 36 months maximum Best 3-Month CD : TotalDirectBank
Best 6-Month CD : INOVA Federal Credit Union
Best 1-Year CD : Nuvision Federal Credit Union
Best 18-Month CD : DR Bank
Best 2-Year and 10-Year CDs : Credit Human
Best 3-Year CD : Vibrant Credit Union
Best 4-Year CD : Wellby Financial
Best 5-Year CD : BMO Alto
Frequently Asked Questions
What Is a CD?
How Do CDs Work?
How Do Early Withdrawal Penalties Work?
What Are the Pros and Cons of CDs?
How Can You Manage Risks?
What Is a CD Ladder?
Is Money Safe in a CD?
What Influences CD Rates?
What Should You Look for in a CD?
What Is a No-Penalty CD?
Do You Have to Pay Taxes on Interest From CDs?
What Are Some Alternatives to CDs?
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