Certificates of Deposit (CDs) work similarly to online savings accounts or money market accounts in terms of offering great returns with zero risk. The difference is, CDs “lock your money up” for a specified period of time. To access your funds before the term ends, you’ll have to pay a penalty.
Although CDs offer less liquidity than a regular checking account or savings account, you might get a higher rate of return with this financial product. This is especially true if you open a CD account with a longer timeline; for example, a 60-month CD instead of a 12-month CD.
According to the Federal Deposit Insurance Corporation (FDIC), national average CD rates range from 0.15% to 1.21% depending on the CD term, as of writing.
However, quite a few banks offer vastly superior CD rates to consumers who do their research. We compared dozens of banks and financial institutions to find the best CD rates today. If you’re on the hunt for a high-yield CD, start your search here.
Important Factors for Certificate of Deposit Accounts
- CDs are for long-term savings. Since CDs lock your funds into the account for a specific term (usually 12 to 60 months), they aren’t ideal for money you might need to access in the short term.
- CDs offer security for your funds. CD accounts are a secure place to stash your money and earn interest, thanks to FDIC insurance.
- Check for CD fees. Most CDs charge fees if you need to access your money early. Make sure you understand these fees before opening this deposit account.
- Online banks might offer better rates. Although brick and mortar banks offer their own CDs, you might find better rates through online banks. Compare legacy banks and online institutions to find the best CD rates.
If your goal is securing a superior short-term investment, the best CD rates are worth exploring. To help in your search, we compared many of the top financial institutions and online banks to find options with the most attractive rates and terms. The banks below made our ranking due to the interest rates they offer and other features.
Best Certificate of Deposit Accounts – Reviews
There are a few factors to consider when choosing where to open a certificate of deposit. These include whether you want to open your CD in person or online, the rates and terms that apply, and the fees required to access your money early.
The following reviews explain the CD rates for each of the top banks we profile and other details you should know.
PNC Bank offers a variety of popular banking products, including certificates of deposit. Its CDs don’t require any monthly maintenance fees, and you can monitor your account at any time online or with the BBVA mobile banking app.
CD terms range from 1 month to up to 10 years, and CDs with longer timelines pay higher CD rates. Note that penalties apply if you access your money early.
If you cash out your CD early, with a term of one year or less, you’ll pay $25 plus 1% of the amount withdrawn. If you cash out a CD with a longer-term early, you’ll pay $25 plus 3% of the amount you cash out.
CD Rates: Online CDs with terms from 11 months to 36 months currently pay up to 4.04% APY.
CIT Bank is known for its popular high-yield savings account, known as Savings Builder, but it also offers an array of CDs with excellent terms. Its 11-month, no-penalty CD stands out since it offers an excellent return rate. There are also no penalties if you need to access your money early.
CIT Bank also offers term CDs with various other lengths, as well as jumbo CDs for deposits of $100,000 or more. None of its CDs come with account opening fees or account maintenance fees.
CD Rates: CIT Bank currently pays from 0.30% to 4.65% APY on their CDs, depending on the term you choose. Top rates are offered on their 18 month CDs, which pay out 4.60% APY, respectively. Additionally, they have an excellent 11-month No-Penalty CD at 4.10% APY as of the time of this writing (02/3/23.)
With Discover, you can open a CD that lasts anywhere from three months to 120 months. There are no fees to open a CD, including account opening fees or maintenance fees, although their minimum opening deposit is $2,500.
Discover also stands out due to the reasonable penalties it charges if you need to access your money early. CDs with a term of less than one year, incur a penalty at three months of simple interest. For a CD that lasts one to four years, the penalty for cashing out early is just six months of simple interest.
CD Rates: The 120-month (10-year) CD is most rewarding, currently offering 4.10% APY, but that’s a long time to wait. If you’re willing to part ways with your funds for just 12 months, you can earn a rate of 4.75%.
Marcus by Goldman Sachs
Marcus by Goldman Sachs is a popular online bank for personal loans and high-yield savings accounts, yet it also offers rewarding CDs. Terms for its CDs range from seven months to six years, with a minimum $500 deposit to get started.
Marcus by Goldman Sachs even offers a 10-day guarantee that says you can move your rate up if the advertised rates on the CD you purchased increase within 10 days.
CD Rates: Some of the best CD rates from Marcus by Goldman Sachs are for its five-year or six-year CDs, which currently pay 2.60% APY. Marcus by Goldman Sachs also offers limited-time CD rate promotions, like 0.65% on a nine-month CD.
What Holds It Back: Marcus by Goldman Sachs is an online bank only, so you don’t have the option to open your CD in person.
We chose Synchrony Bank for our ranking because it doesn’t impose a minimum balance requirement, yet has competitive CD rates. It offers a 15-day guarantee, which lets you raise your rate if the advertised rate increases within 15 days of your CD purchase.
Terms are available from three months to 60 months. Early withdrawal fees for their CDs are also reasonable. For example, early cash-outs on CDs with terms of 12 months or less charge 90 days of simple interest at the current rate.
CD Rates: Five-year (60-month) CDs currently pay 2.60% APY, and four-year (48-month) CDs pay 2.30% APY.
What Holds It Back: Synchrony Bank CDs are meant to be opened and maintained online, so you consider a different bank if you’re hoping for a personalized experience or you prefer to bank in person.
How We Found the Best CD Rates
Finding the best CD rates is important if you want to maximize returns on your savings, yet there are other factors to consider before opening an account. We considered the following factors when compiling this list of banks with the best CD rates of 2023:
Rates and Terms
Although we gave preference to banks that apply the best rates to various CD terms, we focused on banks that offer at least one CD with an APY that is at least double the average CD rate nationwide. BBVA didn’t score well in this category, yet we included them due to their lack of account fees and a strong reputation among major U.S. financial institutions.
We only considered banks that don’t charge fees to open a CD account. We also chose banks that don’t charge any monthly account maintenance fees.
Early Withdrawal Penalties
Most banks charge an early withdrawal fee if you cash out your CD early, so we looked for banks with reasonable penalties. We also gave preference to accounts or CD options that don’t charge any penalty for early withdrawals.
Finally, we only included institutions in our ranking that offer FDIC insurance. This insurance secures up to $250,000 of CD funds per account holder.
What You Need to Know About Certificates of Deposit
If you have never opened a certificate of deposit before, you might wonder how they work and why people choose this option. Here are some important factors when considering a CD account.
- CDs offer superior rates compared to other deposit products. According to recent figures from the FDIC, the average national CD rate for a 60-month term is about four times greater than the average national savings account rate.
- Longer CDs offer better yields. Committing your money to a longer timeline can lead to considerably higher returns. FDIC data shows that the average APR for a one-month CD is only .02% — not much better than a basic savings account.
- CD rates can go up or down over time. CD rates are determined based on the current interest rate environment, including benchmark interest rates. This means that you might get a better CD rate any time benchmark interest rates go up.
- CD rates can be higher on larger amounts. If you have $100,000 or more to deposit, you might qualify for a “jumbo CD”. This type of CD requires a high minimum deposit, but banks are willing to pay higher APYs to lock in more funds.
Summary: Best CD Account Rates of 2023
|Best For||Available CD Terms||Best Rate Offered|
|PNC||Long-term CD options||1 month to 10 years||Up to 0.04% APY|
|CIT Bank||11-month, no-penalty CD option||1 month to 5 years||4.65% APY|
|Discover||Reasonable penalties for early withdrawals||Three months to 10 years||4.30% APY|
|Marcus by Goldman Sachs||Low minimum deposit requirement||Seven months to six years||2.60% APY|
|Synchrony Bank||15-day rate guarantee||Three months to five years||2.60% APY|
The Bottom Line – Locking in the Highest CD Rates
Investing in a certificate of deposit (CD) is one of the safest ways to grow your money. CDs are low-risk investments with guaranteed returns, so they can be an excellent choice for those looking to diversify their portfolios and lock in higher interest rates.
When choosing a CD, it’s important to compare APYs (annual percentage yields) and terms between different banks and credit unions in order to get the best rate possible. Shop around for promotional offers or talk to financial advisors if you need help selecting the right CD for your needs.
With careful research and comparison, you’ll be able to find the CD that gives you the highest rate – and peace of mind – in the long run.
FAQs on the Finding the Best CD Rates
Some of the key factors you should consider when searching for the best CD rates include the length of the term, any penalties for early withdrawal, and minimum deposit requirements. You’ll also want to compare the annual percentage yields (APYs) of different products to ensure you’re getting a good return on your investment.
How often do CD rates change?
Certificate of deposit (CD) rates may fluctuate throughout the year as interest rates change. It’s important to keep an eye on current market conditions in order to maximize your earning potential by investing in CDs with higher rates.
Yes, it is possible to get a higher APY than what is advertised by banks and credit unions – especially if you are willing to negotiate or shop around at online banks that offer competitive CD rates. Additionally, certain banks may offer promotional offers or discounts that can result in even better returns on your investment.
Cathy Mott-Morales says
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