Comparing the best CD rates—the annual percentage yield, or APY—is an excellent place to start when shopping for a certificate of deposit. But the best CDs are those that most closely align with your savings goals. Often, this means finding a CD with a high APY relative to the national average, a low minimum deposit requirement and a term that matches when you’ll need to access your cash.
In This Post
- Best CD Rates
- Quontic Bank: Best Overall Bank for CDs
- CommunityWide Federal Credit Union: Best Overall Credit Union for CDs
- Connexus Credit Union: Best Credit Union for Long-Term CDs
- TAB Bank: Best for CD Ladders
- First National Bank of America: Best Bank for Long-Term CDs
- Comenity Direct: Best for High Balances
- My eBanc: Best for Money Management Tools
- Limelight Bank: Best for Environmentally Conscious Banking
- Marcus by Goldman Sachs: Best for Withdrawing Interest
- Ally Bank: Best for Minimum Deposit Requirement
- The Best CD Rates by Term
- The Best 3-Month CD Rates
- The Best 6-Month CD Rates
- The Best 1-Year CD Rates
- The Best 18-Month CD Rates
- The Best 2-Year CD Rates
- The Best 3-Year CD Rates
- The Best 4-Year CD Rates
- The Best 5-Year CD Rates
- How to Choose a CD
- Laddering CDs
- Summary of Best CD Rates 2021
- Methodology
- Frequently Asked Questions (FAQs)
- Next Up In Banking
Best CD Rates
We’ve compared 100 CD accounts at 70 nationally available banks and credit unions to find some of the best accounts available. Click on the individual View Details button for each featured account to learn more about why we picked it, the pros and cons and to access individual bank reviews.
On this list, you’ll first find the best banks and credit unions for CD rates overall. Then you’ll see the best banks and credit unions by CD term length.
Annual percentage yields (APYs) and account details are accurate as of January 4, 2021.
Quontic Bank: Best Overall Bank for CDs
Quontic Bank Certificate of Deposit
0.60% to 0.75%
$500
Daily
6 Months to 3 Years
CommunityWide Federal Credit Union: Best Overall Credit Union for CDs
CW Certificate Account
0.75% to 1.00%
$1,000
Monthly
6 Months to 5 Years
Connexus Credit Union: Best Credit Union for Long-Term CDs
Connexus Credit Union Share Certificate
0.71% to 1.01%
$5,000
Quarterly
12 Months to 5 Years
TAB Bank: Best for CD Ladders
TAB Bank Certificate of Deposit
0.50% to 0.85%
$1,000
Daily
6 Months to 5 Years
First National Bank of America: Best Bank for Long-Term CDs
First National Bank of America Certificate of Deposit
0.55% to 1.10%
$1,000
Quarterly
12 Months to 7 Years
Comenity Direct: Best for High Balances
Comenity Direct Certificate of Deposit
0.60% to 0.90%
$1,500
Daily
12 Months to 5 Years
My eBanc: Best for Money Management Tools
My eBanc Online Time Deposit
0.40% to 0.65%
$5,000
Daily
6 Months to 3 Years
Limelight Bank: Best for Environmentally Conscious Banking
Limelight Bank CD
0.50% to 0.75%
$1,000
Daily
6 Months to 3 Years
Marcus by Goldman Sachs: Best for Withdrawing Interest
Marcus by Goldman Sachs High-Yield Certificate of Deposit
0.15% to 0.60%
$500
Daily
6 Months to 6 Years
Ally Bank: Best for Minimum Deposit Requirement
Ally Bank High Yield Certificate of Deposit
0.20% to 0.85%
$0
Daily
3 Months to 5 Years
The Best CD Rates by Term
If you’re shopping for a particular CD term, check out the best CD rates by term below. Although APY is the main factor here, the banks here also rank well in other categories, such as minimum requirements, compounding interest frequency, customer experience and digital banking options.
The Best 3-Month CD Rates
| Bank/Credit Union | APY | Minimum |
|---|---|---|
| BrioDirect | 0.50% | $500 |
| TotalDirectBank | 0.50% | $25,000 |
| Northpointe Bank | 0.30% | $1,000 |
The Best 6-Month CD Rates
| Bank/Credit Union | APY | Minimum |
|---|---|---|
| CommunityWide FCU | 0.75% | $1,000 |
| Quontic Bank | 0.60% | $500 |
| iGObanking | 0.60% | $1,000 |
The Best 1-Year CD Rates
| Bank/Credit Union | APY | Minimum |
|---|---|---|
| CommunityWide FCU | 0.80% | $1,000 |
| Connexus Credit Union | 0.71% | $5,000 |
| Quontic Bank | 0.65% | $500 |
The Best 18-Month CD Rates
| Bank/Credit Union | APY | Minimum |
|---|---|---|
| CommunityWide FCU | 0.85% | $1,000 |
| iGObanking | 0.70% | $1,000 |
| Limelight Bank | 0.65% | $1,000 |
The Best 2-Year CD Rates
| Bank/Credit Union | APY | Minimum |
|---|---|---|
| CommunityWide FCU | 0.90% | $1,000 |
| Connexus Credit Union | 0.81% | $5,000 |
| Quontic Bank | 0.70% | $500 |
The Best 3-Year CD Rates
| Bank/Credit Union | APY | Minimum |
|---|---|---|
| CommunityWide FCU | 0.90% | $1,000 |
| Connexus Credit Union | 0.90% | $5,000 |
| Comenity Direct | 0.85% | $1,500 |
The Best 4-Year CD Rates
| Bank/Credit Union | APY | Minimum |
|---|---|---|
| Connexus Credit Union | 0.96% | $5,000 |
| CommunityWide FCU | 0.95% | $1,000 |
| First Internet Bank | 0.86% | $1,000 |
The Best 5-Year CD Rates
| Bank/Credit Union | APY | Minimum |
|---|---|---|
| Connexus Credit Union | 1.01% | $5,000 |
| CommunityWide FCU | 1.00% | $1,000 |
| First National Bank of America | 1.00% | $1,000 |
How to Choose a CD
Banks and credit unions offer CDs in a wide range of terms and types. While APY may be the main factor in play when shopping for a CD, there are other factors to consider as well. Here’s what to keep in mind when choosing a CD:
- APY. The best CDs offer yields that keep your money safely growing while meeting your savings goals.
- Compounding schedule. The faster your interest compounds, the more money you earn. Look for a CD that compounds daily.
- Minimum deposit. Requirements for minimum deposits vary by bank and credit union. Decide what you can realistically deposit before opening an account.
- Term. Your time horizon is a significant factor in the CD account you choose. CDs are time-deposit accounts. Align the CD’s term with when you’ll need access to your money. If you’re interested in using a CD laddering strategy (see below), look for a bank or credit union that carries terms that can help you reach that goal.
- Early withdrawal penalty. You’ll generally have to pay an early withdrawal penalty if you need access to the money in your CD before its maturity date. These penalties vary by institution and term, but they can often be costly—eating up interest earned and occasionally some of your principal investment.
- Customer experience. Should a question or problem arise, the institution’s customer service department should be reachable, helpful and responsive.
- Digital banking. Because online institutions tend to offer the best CD rates, it’s important to find banks and credit unions that offer innovative online and mobile banking services.
- Safety. Look for the Federal Deposit Insurance Corporation (FDIC) to insure your account at a bank. In the event of a bank failure, it protects up to $250,000 per depositor, per bank, for each account ownership category. At federal credit unions, and the majority of state-chartered credit unions, the National Credit Union Administration (NCUA) insures your account for the same amount.
Perhaps most importantly, consider your goals. CDs generally work best for short-term financial goals, like saving up for a down payment on a car. The CD you choose should closely match the financial goal you’re trying to meet. For example, if you plan on purchasing a vehicle in a year, consider investing in a one-year CD with a high yield. This allows you to access your money when you need it, and it’s also an excellent way to keep you from dipping into your savings prematurely.
Traditional CDs aren’t your only option. There are a number of different types of CDs available, all of which are beneficial in different ways. If you need more liquidity out of a CD, for example, you may benefit from a no-penalty CD.
Laddering CDs
Longer-term CDs tend to pay higher yields. They also require you to lock up your money for an extended period, unless you’re willing to incur an early withdrawal penalty. One way to get the best of both worlds is to engage in a CD ladder strategy. This occurs when savers spread their money out across different CDs with varying terms. A portion of the money goes toward short-term CDs, while another portion of the funds is allocated to longer-term CDs.
As one of the CDs matures, the money, for example, may be reinvested in a new five-year CD. Eventually, you would have a five-year CD maturing each year. This will enable you to have some access to your money and, at the same time, keep it in a higher-yielding savings vehicle.
CDs aren’t going to give you a double-digit return, but you can get a higher rate if you are willing to shop around. Thanks to the increased competition in the marketplace, consumers have many options from traditional banks and their online brethren.
Banks of all kinds want your business and will pay for it with attractive returns, making comparison shopping nonnegotiable when purchasing a CD.
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Summary of Best CD Rates 2021
| Bank/Credit Union | Best For |
|---|---|
| Quontic Bank | Best Overall Bank for CDs |
| CommunityWide Federal Credit Union | Best Overall Credit Union for CDs |
| Connexus Credit Union | Best Credit Union for Long-Term CDs |
| TAB Bank | Best for CD Ladders |
| First National Bank of America | Best Bank for Long-Term CDs |
| Comenity Direct | Best for High Balances |
| My eBanc | Best for Money Management Tools |
| Limelight Bank | Best for Environmentally Conscious Banking |
| Marcus by Goldman Sachs | Best for Withdrawing Interest |
| Ally Bank | Best for Minimum Deposit Requirement |
Methodology
To create this list, Forbes Advisor analyzed 100 CD accounts across 70 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. For the star rating, we ranked each institution on 10 data points within the categories of APY, minimums, compound interest schedule, customer experience, digital experience, available terms and overall availability. We also analyzed and ranked each institution by individual term.
The following is the weighting assigned to each category:
- APY: 50%
- Minimums: 12.5%
- Compound Interest Schedule: 7.5%
- Customer and Digital Experience: 20%
- Availability: 5%
- Available Terms: 5%
CD accounts with the highest APYs rose to the top of the list. Minimum deposit requirements of $10,000 or higher affected scores negatively. Accounts with daily compounding interest schedules were scored higher than those with monthly or quarterly schedules. To appear on this list, the account must be nationally available.
Frequently Asked Questions (FAQs)
What is a CD?
CDs are time deposit accounts. They pay a fixed rate of interest on the money you invest for a fixed period of time. Unlike a savings account, CDs generally don’t allow you to withdraw the principal at any time during the term. If you withdraw money before the maturity date, you’ll often have to pay an early withdrawal penalty.
How does a CD work?
CDs lock up your money for a set period. In exchange, the bank or credit union pays an interest rate that’s generally higher than that found on a savings account. Banks and credit unions offer CDs in a variety of terms.
Typically, the longer the term, the higher the interest rate. However, the Covid-driven uncertainty in the U.S. economy has caused some banks to price CDs differently in 2020, such as paying the same rate for all terms, or paying a higher APY for a shorter term.
What are the pros and cons of CDs?
The pros of CDs include a guaranteed, fixed rate of return, higher APYs than those of many savings accounts and a wide selection of terms and types of CDs. CDs can be especially useful for meeting your short-term savings goals and are typically considered safe investments.
The cons of CD include higher minimum deposit requirements, early withdrawal penalties and the lack of liquidity, since your money is committed for a fixed period of time. In the current economy, CD APYs also may be lower than those offered by some high-yield savings accounts.
Are CDs safe?
Are there different types of CDs?
Regular or traditional CDs are the most common type of certificate of deposit. Banks and credit unions may also offer bump-up CDs, step-up CDs, no-penalty CDs or add-on CDs, to name a few variations.
Next Up In Banking
