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No one knows how high (or low) Certificate of Deposit, or CD, rates will go this year. Still, they remain a popular choice for almost anyone diversifying their portfolio. CDs can be a great choice for beginner investors, too, since you know the annual percentage yield (APY) up front and have a defined due date.
A CD is like stashing your cash in a secret vault that grows over time. You agree to let the bank hold onto your money for a fixed period, and in return, the bank pays interest. But with traditional CDs, it's not a quick-money scheme — patience is the game's name here as you wait for the CD to reach maturity before you cash it out or re-invest it. Otherwise, if you withdraw your money before the term, you could be hit with high maintenance fees and lessen your earnings.
So where can you find the best CD bank rates right now? Let’s take a closer look.
In this article
Overview of the best CD bank rates
Bank | Best for |
Ally Bank | Flexible term-length options |
Bank of America | Wide variety of term length options |
Barclays | No minimum balance required |
Capital One | Easy online account management |
Chase | Current Chase account holders |
CIT Bank | Wide range of APYs |
Marcus by Goldman Sachs | High yield APY with low minimum balance |
Quontic | Quick online setup |
Synchrony | Term length options and no minimum balance |
U.S. Bank | In-person service |
Best CD bank rates
These banks offer multiple CD options and some of the best CD bank rates we could find.
Ally Bank
Ally Bank offers multiple CD options and rewards those who lock in their term for a longer time period. With Ally Bank, investors choose between three different types of CDs:
- High-yield: Offers a variety of term lengths from three months to five years, with the highest APY Ally Bank currently offers, but early withdrawal penalties apply.
- Raise Your Rate: Ally Bank offers two term lengths with this CD, a 2- and 4-year option. You can increase the rate over the term, but early withdrawal penalties apply.
- No Penalty: As the name suggests, you can withdraw your money at any time with this CD six days after opening an account and not receive a penalty. However, the rate is slightly lower than the high-yield CD option, which is currently at 4.50% APY.
Bank of America
Bank of America offers three different CD options, all of which require a minimum opening deposit of $1,000.
- Featured: This CD option offers a fixed-rate return, ranging from 7-month terms, up to 37 months. An early withdrawal penalty does apply.
- Fixed Term: This CD option offers a greater range of term lengths, from 28 days upwards to 10 years. Like the Featured CD, it’s subject to early withdrawal penalties. Interest rates range from 0.03-4.00%.
- Flexible: A Flexible CD account offers a 12-month term only but waives the early withdrawal penalty. The current APY for a 12-month term is 4.25%.
Barclays
Barclays offers a simpler approach to CDs, with a fixed-rate APY option available in 12-, 18-, 24-, 36-, 48-, and 60-month terms. The other advantage of a Barclay’s CD is there are no monthly fees or minimum balances, which is ideal for beginners. They offer easy fund transfers to open or close the CD, but early withdrawal penalties apply. The current APY % ranges from 3.75 to 5.10%, depending on the term length.
Capital One
CDs from Capital One feature total online account management, from funding to withdrawals, and only takes about five minutes to open. With no initial deposit required and a wide range of term length options from 6 months to 5 years and APYs ranging from 3.90% to 5.00%, Capital One makes it easy to get started. You should know that early withdrawal penalties apply, and you can’t make a partial withdrawal either.
Chase
Chase offers various CD terms, ranging from three months to four years. Standard CDs require a minimum $1,000 deposit amount. You also earn more if you have a relationship with Chase, such as an active checking account or a traditional savings account. Chase also offers a unique CD option called a CD ladder for Chase Private Clients. The CD ladder requires you to open four CDs simultaneously, with 3-, 6-, 9-, and 12-month terms. Each CD automatically renews for 12 months, giving you more flexibility to access your money if needed.
CIT Bank
CIT Bank now a part of the First Citizens Bank is another option for those who prefer online-only account management. CIT Bank offers multiple term CD options, ranging from 6 months to 5 years, with APYs ranging from 0.30% up to 3.50% for the 13-month CD. CIT Bank offers other unique CD choices, such as the 11-month no-penalty CD so that you can withdraw your money anytime.
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Marcus by Goldman Sachs
Marcus has an incredible selection of CD products, including many terms. You can find CDs ranging from 6 months to 6 years, which is harder to find with most financial institutions. Marcus offers high-yield CDs and no-penalty CDs, allowing you to withdraw your funds seven days after opening the account.
CD rates vary between 3.90% and 5.15%, depending on length of term. No matter which CD product you choose from Marcus, you only need a $500 minimum to get started.
Quontic
Quontic Bank offers a low minimum deposit requirement of only $500, plus five different CD term options — a 6-month and a 1-, 2-, 3-, or 5-year CD, with the one-year CD option offering a higher 4.50% APY. Quontic also advertises you can open a CD in three minutes or less. They have online resources and offer human customer service and live chat, so you can quickly get your questions answered and your account set up.
Synchrony
Synchrony is another banking option for CDs and includes the bonus of no minimum deposit required. Synchrony's 1-year CDs provide 4.80% APY. Plus, you can access nine different term options. CD terms begin with a 3-month CD at 0.25% and end with a 5-year CD at 4.00%.
U.S. Bank
U.S. Bank offers a huge assortment of CD options, including standard CDs. It also features the CD Special, which offers four CD term options, a 7-, 11-, 15-, and 19-month term, with highly competitive rates compared to other banks. U.S. Bank also offers the TradeUp CD option, which lets you trade up your CD into a higher rate option, but this is currently only available on a 30- or 60-month term. Plus, you can set your account up online or visit a local branch.
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Best CD rates comparison
Here are the best CD rates (APY) for some of the most popular rate terms as of August, 2024.
Bank | 3-mo | 6-mo | 7-month | 9-mo | 11-mo | 12-mo | 13-mo | 18-mo | 24-mo | 36-mo | 48-mo | 60-mo |
Ally Bank | 3.0% | 4.75% | 4.85% | 4.5% | 4.25% | 3.75% | 4.0% | 3.75% | 3.90% | |||
Bank of America | 4.89% | 0.05% (10-month) | 4.79% | 2.96% (25-month) | 0.05% (37-month) | |||||||
Barclays | 4.85%
| 5.10%
| 4.85% | 4.5% | 4.0% | 3.50% | 3.50% | 3.75% | ||||
Capital One | 4.25% | 4.25% | 5.00% | 4.45% | 4.00% | 4.00% | 3.95% | 3.90% | ||||
Chase | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | .01% | |||
CIT Bank | 3.00% | 0.30% | 3.00% | 0.40% | 0.40% | 0.50% | 0.50% | |||||
Marcus by Goldman Sachs | 5.10% | 5.00% | 5.15% | 4.70% | 4.40% | 4.15% | 4.05% | 4.00% | ||||
Quontic | 5.10% | 4.50% | 4.50% | 4.40% | 4.30% | |||||||
Synchrony | 0.25% | 4.80% | 4.90% | 4.80% | 4.50% | 4.20% | 4.15% | 4.00% | 4.00% | |||
U.S. Bank | 4.50% | 4.00% | 3.75% (15-mo) |
Types of CDs
Traditional CD
A traditional Certificate of Deposit (CD) is the most common type. It offers a fixed interest rate and a fixed term length, typically ranging from a few months to several years. The interest rate on a traditional CD is usually higher than that of a regular savings account, making it an attractive option for those looking to earn more on their savings. However, if you withdraw your money before the maturity date, you will likely face an early withdrawal penalty, which can reduce your overall earnings.
Jumbo CD
A Jumbo CD is designed for those who can invest a larger sum of money, often requiring a minimum deposit of $100,000 or more. Due to the higher deposit requirement, Jumbo CDs generally offer higher interest rates compared to traditional CDs. The term lengths for Jumbo CDs are similar to those of traditional CDs, ranging from a few months to several years. Like traditional CDs, early withdrawal from a Jumbo CD typically incurs a penalty.
No-Penalty CD
A No-Penalty CD provides the flexibility to withdraw your money before the maturity date without incurring an early withdrawal penalty. This type of CD is beneficial for those who want the security of a CD but might need access to their funds sooner than anticipated. No-Penalty CDs usually have shorter terms, often up to 12 months, and tend to offer lower interest rates compared to traditional CDs due to the added flexibility.
Bump-Up CD
A Bump-Up CD allows you to take advantage of rising interest rates during the term of your CD. With this type of CD, you have the option to increase your interest rate once during the term if market rates go up. This feature makes Bump-Up CDs attractive in a rising interest rate environment. Typically, Bump-Up CDs have term lengths ranging from 2 to 4 years. While the initial interest rate might be slightly lower than that of a traditional CD, the potential to increase the rate can make it a valuable option for some savers.
Pros & Cons of investing in CDs
Pros
- Safety and security. CDs are generally considered very safe investments. They are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per insured bank, providing a high level of security for your investment.
- Predictable returns. CDs offer fixed interest rates, so you know exactly how much you will earn over the term of the CD. This predictability makes them an attractive option for conservative investors looking for stable, guaranteed returns.
- Higher interest rates. Compared to regular high yield savings accounts, CDs typically offer higher interest rates. Due to compound interest, this makes them a better option for those looking to earn more interest on their savings without taking on much risk.
- Variety of terms. CDs come with a variety of term lengths, ranging from a short-term to several years, allowing you to choose the duration that best suits your financial goals and needs.
Cons
- Limited liquidity. One of the main drawbacks of CDs is that your money is locked up for the term length of the CD. Withdrawing your money before the maturity date typically results in early withdrawal penalties, which can significantly reduce your earnings.
- Inflation risk. The fixed interest rate on a CD might not keep pace with inflation, especially during periods of high rate environment. This means that your purchasing power could decrease over time if inflation outpaces your CD's interest rate.
- Interest rate risk. If interest rates rise after you purchase a CD, you could be stuck with a lower rate until your CD matures. This is particularly relevant for longer-term CDs, where the opportunity cost of locking in a lower rate can be significant.
- Minimum deposit requirements. Some CDs, especially Jumbo CDs, require a substantial minimum deposit. This can limit accessibility for investors who do not have a large sum of money to invest upfront.
FAQ
Are certificates of deposit FDIC-insured?
Yes, certificates of deposit, or CDs, are one of the financial products the FDIC guarantees up to $250,000 per depositor, but only if the bank or financial institution where the CD is held is a member of the FDIC insurance agency.
Is there a risk of losing money with a CD?
There is very little risk with a CD because it’s not tied to the stock market. The biggest risk of losing money with a CD is if you make an early withdrawal of the funds and you’re charged a penalty fee.
How much interest would a $10,000 CD make?
If someone deposited $10,000 into a 12-month CD with the national average rate of 1.85% APY, the total balance at the end of the 12-month term would equal $10,185. Compare all the options to choose the highest CD rates.
The bottom line
If you’re interested in amping up your savings with a CD, it pays you to shop around and compare rates from multiple reputable banks. There is a wide variety of rates and terms to choose from, and when you compare them side by side, you can find the best rate for your savings goals.
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Writer
Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.
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