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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 October 10, 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 Oct. 10, 2024. Best CD Rates of October 2024 Best CD Rates of October 2024 Frequently Asked Questions Based in Midland, Michigan, Dow Credit Union was founded in 1937 and has more than 74,000 members and $2.1 billion in assets. Membership is available to employees of Dow Chemical, Dow Corning, and their affiliates, as well as to members of the Midland Country Club and Great Lakes Loons Founders Club. Additionally, employees of more than 100 other businesses and organizations are eligible. In addition to CDs, the credit union provides options for checking, savings, and multiple lending options. 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. Spectra Credit Union was founded in 1946 as Naval Research Lab Federal Credit Union to serve scientists at the laboratory. It changed its name to Spectra in 2021 to reflect its broader customer base. Headquartered in Alexandria, Virginia, Spectra also has branches in Maryland and Washington, D.C. As well, it is part of the CO-OP network of shared branches and ATMs. Customers also can manage their accounts online or through an app for Android and Apple devices. Membership is available to anyone who joins the American Consumer Council at a cost of $8. FedChoice Federal Credit Union was founded in 1935 by a group of IRS agents. It has since grown to have over 25,000 members and over $425 million in assets. FedChoice offers a variety of banking products like checking and savings accounts; high-yield CDs; credit cards; and various loans. You can join FedChoice online with a $5 opening deposit. EFCU Financial was established in Baton Rouge, Louisiana, in the 1930s as the 13th federal credit union in the U.S. It began with 178 members and $941.70. After several name and affiliation changes since its beginnings, it took its current name in 2015. The credit union has eight branches in the Baton Rouge area, but membership is available nationwide with online and mobile banking and access to shared branches through the CO-OP Shared Branch Network and ATMs through the Allpoint network. Started in 1949 by members of the scientific community, NASA Federal Credit Union serves over 200,000 members nationwide. Anyone can join the credit union by becoming a member of the National Space Society. You can join via the NASA Federal Credit Union application page, and your first year of membership is complimentary. Members are also required to sign up for a primary savings account with a minimum deposit of $5. BMO Harris Bank is the eighth largest bank in North America and 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. The bank’s certificate of deposit terms range from three months to five years, and rates may vary by location. 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. 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 Dow Credit Union. "About," Click "Our History." Dow Credit Union. "Join." NASA Federal Credit Union. "About Us." NASA Federal Credit Union. "Associations." NASA Federal Credit Union. "Savings." Newsletter Sign Up Newsletter Sign Up By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Best CD Rates of October 2024
Best 3-Month CDs (2–4 months included) APY Minimum Deposit Early Withdrawal Penalty Dow Credit Union 5.00% $500 3 months of interest TotalBank 5.00% $25,000 1 month of interest Digital Federal Credit Union 5.00% $25,000 2 months of interest Best 6-Month CDs(5–9 months included) APY Minimum Deposit Early Withdrawal Penalty Nuvision Federal Credit Union (8 months) 5.50% $1,000 3 months of interest Newtek Bank 5.05% $25,000 3 months of interest Digital Federal Credit Union (5 months) 5.00% $25,000 2 months of interest Best 1-Year CDs(10–14 months included) APY Minimum Deposit Early Withdrawal Penalty Spectra Credit Union (14 months) 5.05% $10,000 3 months of interest Abound Credit Union (10 months) 5.00% $500 3 months of interest Apple Federal Credit Union 5.00% $500 All earned interest; 6 months maximum Best 18-Month CDs(15–20 months included) APY Minimum Deposit Early Withdrawal Penalty FedChoice Federal Credit Union (15 months) 4.65% $500 4 months of interest Apple Federal Credit Union (15 months) 4.65% $500 All earned interest; 6 months maximum EFCU Financial 4.55% $500 6 months of interest Best 2-Year CDs(21–29 months included) APY Minimum Deposit Early Withdrawal Penalty EFCU Financial 4.55% $500 6 months of interest Connexus Credit Union 4.53% $5,000 6 months of interest Vibrant Credit Union (23 months) 4.50% $500 All earned interest Best 3-Year CDs(30–41 months included) APY Minimum Deposit Early Withdrawal Penalty EFCU Financial (30 months) 4.55% $500 6 months of interest Seattle Bank 4.15% $1,000 6 months of interest Connexus Credit Union 4.11% $5,000 6 months of interest Best 4-Year CDs(42–53 months included) APY Minimum Deposit Early Withdrawal Penalty NASA Federal Credit Union (49 months) 4.09% $10,000 All interest up to 180 days Seattle Bank 4.05% $1,000 6 months of interest All In Credit Union 4.02% $1,000 3 months of interest Best 5-Year CDs(54–66 months included) APY Minimum Deposit Early Withdrawal Penalty BMO (59 months) 4.00% $1,000 545 days of interest Synchrony Bank 4.00% $0 12 months of interest EFCU Financial 4.00% $500 6 months of interest Best 10-Year CDs (114–120 months included) APY Minimum Deposit Early Withdrawal Penalty Credit Human 3.85% $500 Greater of $50 or 1,095 days of interest Apple Federal Credit Union 3.81% $500 All earned interest; 36 months maximum First National Bank of America 3.76% $1,000 18 months of interest Best 3-Month CD : Dow Credit Union
Best 6-Month CD : Nuvision Federal Credit Union
Best 1-Year CD : Spectra Credit Union
Best 18-Month CD : FedChoice Federal Credit Union
Best 2-Year and 3-Year CDs : EFCU Financial
Best 4-Year CD : NASA Federal Credit Union
Best 5-Year CD : BMO Harris Bank
Best 10-Year CD : Credit Human
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?