Certificates of Deposits offer a safe way to save money. Whether for an emergency fund, to buy a home or liquidity during retirement, term CDs can also offer higher yields than savings accounts (although not always). Here we cover the best CD rates available nationwide.
May 2020 CD Rate Update
The big news, of course, is COVID-19. It has affected every area of our lives, and that even includes certificates of deposit. The Fed lowered rates to near zero and confirmed that rates would stay this low for the foreseeable future. This policy affects CD rates in two ways:
- It keeps rates low. The highest yielding 12-month CD available today is below 2% APY.
- It keeps rates of longer-term CDs lower than short-term CDs. While this is a reverse of what we normally expect, the uncertainty of future inflation and rates keeps banks from committing to long-term high rates.
Generally, CD rates remained unchanged last month. There was some movement, although minor. For example, The Federal Savings Bank increased the rate on its 5-year CD by 5 bps to 2.05% APY. By and large, however, rates were flat.
Best 1 Year CD Rates
The 1-year CD terms is one of the most popular for savers. Here are some of the best rates available for 12-month terms.
|Bank||APY||Minimum Deposit||Early Withdrawl Penalty|
|Comenity Direct||1.70||$1,500||180 days interest|
|Marcus||1.60||$500||270 days interest|
|Live Oak Bank||1.50||$2,500||120 days interest|
|Synchrony Bank||1.35||$2,000||90 days interest|
Best CD Rates Overall
Many have never heard of CFG Bank. Headquartered outside of Baltimore, MD, the bank was founded in 1997 as AmericasBank (FDIC # 34294). CFG is a community bank, meaning it’s locally owned and operated.
|13-Month No-Penalty CD||1.55%||$500||$250,000|
CIT Bank is one of our favorites. It tends to offer some of the best rates on deposit accounts, including CDs. In addition to the high-yield CDs below, it also offers Ramp Up CDs, Jumbo CDs, and a no-penalty CD.
BMO Harris Bank
BMO offers competitive yields on CDs. That said, its rates have come down sharply along with other banks over the last month. We’ve also seen a flattening of rates, with terms ranging from 6 to 18 months offering the same rates, and two to four years also offering the same rates.
Ally offers several types of certificates of deposit: high-yield CDs, Raise Your Rate CDs, and a no-penalty CD. There are no monthly maintenance fees and no minimum deposit requirement. However, the amount of your deposit can affect the interest rate you’ll receive (see rates below)
High-Yield CD Rates
Raise Your Rate CD Rates
|2-Year Raise Your Rate CD||1.50%||–||–|
|4-Year Raise Your Rate CD||1.50%||–||–|
You can increase your rate once over the 2-year term or twice over the 4-year term if the rate on these products goes up during that time.
No Penalty CD Rates
|11-Month No Penalty CD||1.40%||$0||$5,000|
|11-Month No Penalty CD||1.45%||$5,000||$24,999|
|11-Month No Penalty CD||1.50%||$25,000||–|
Marcus by Goldman Sachs
Marcus by Goldman Sachs offers some of the highest yields on CDs available today. In addition to high-yield certificates of deposit, the bank offers a no-penalty CD.
|7-Month No-Penalty CD||1.55%||$500||$1,000,000|
Comenity Direct is one bank many have never heard of. A brand of Comenity Capital Bank headquartered in Draper, UT, it was established in 2003 as World Financial Capital Bank. It’s FDIC-insured (Certificate # 57570) and offers some of the best CD yields available in the country.