Want a risk-free investment that earns you more than 5% a year? Try these CDs. (2024)

With a CD, you tie up your savings for a fixed term and, in exchange, you get a rate that beats what a traditional savings account offers. However, beware of early withdrawal penalties: If you tap your cash before the CD matures, you’ll be on the hook for a penalty typically worth a few months’ of interest.

Highest current CD rates (overall)

Best CD Rates by term length

In most cases, financial institutions will vary the APY of a CD depending on the length of time you’re willing to deposit the money. While this doesn’t always mean you’ll earn a higher rate over a longer term, comparing products by term length is worth it to ensure you’re getting the most bang for your buck. In collaboration with Curinos, we've gathered details on some of the highest CD rates available for common term lengths.

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Use the widget below to find the CDs with the best rates in your area.

Current news on CD rates

CD rates have skyrocketed over the past two years as the Federal Reserve works to battle inflation. Fed rates have not changed since July 2023, meaning we are closing in on a full year at the highest CD interest rates we’ve seen in decades. Many investors are wondering if they should open a CD now or wait, and many experts are suggesting that now is the time to buy. It’s unlikely that CD rates will continue to go up since the Fed has signaled intentions to lower rates before the end of 2024.

According to the FDIC, the average 12-month CD rate today is 1.80%. However, many banks currently offer rates of 4%–5% or more, especially for terms under two years. This allows them to attract new customers with high rates, without allowing them to lock in that rate for an extended period of time. In our research, CD rates for terms of three years or more have been steadily falling over the course of the past six months. Savvy investors may be able to take advantage of the high rates on short term lengths by building a CD ladder instead of dumping all their funds into a single long-term CD.

The best CD rates: our top picks*

Here’s our rundown of the top 10 CDs according to our research, including the key figures you should know before you open an account.Click on “see more CD rates” to view potential earnings with each institution’s rates and term lengths.

*Note: APYs for these institutions are updated daily, but are subject to change. Please refer to the website of each provider for the most up-to-date information.

Discover 12-month CD: 4.70% APY

Discover Bank is part of the Discover Financial Services company, which is primarily known for its credit card products. Discover Bank, however, offers a range of other financial services beyond just credit cards, including online deposit account options.

Why we picked it

Although Discover has a large minimum opening deposit at $2,500, the company offers a broad range of CDs, with durations of up to 10 years. If you plan to invest in a Discover CD, the short-term options are currently offering better rates than CDs that last many years.

While Discover is probably best known as a credit card processor, its deposit products are well-rounded and easily accessible. New customers can quickly sign up online (there are no physical branches) and get access to funds at any time through a vast network of over 60,000 ATMs. An extensive online frequently asked questions (FAQs) can help provide answers to common inquiries, and representatives are available by phone 24/7 for more difficult questions.

Learn more: read our Discover Bank review

Alliant Credit Union 12-month CD: 5.05% APY

Founded in 1935, Alliant Credit Union is a not-for-profit credit union that offers deposit accounts—savings accounts and share certificates—and lending products like auto loans and mortgages.

Membership eligibility is extended to current or former employees of Alliant’s partner organizations, or residents or workers in a Chicago-area community. You can also become a member by becoming an Alliant Credit Union Foundation digital inclusion advocate.

Why we picked it

Alliant made our list because of its solid APYs and variety of customer support options. It offers one of the best one-year CD rates on our list, coming in at 5.05%. While credit unions often have strict requirements that make membership a challenge, this one makes the process as simple as submitting an application that isn’t much more complex than the standard account opening process at a traditional bank.

If you choose Alliant as your financial home, it’s a digital credit union that doesn’t provide access to physical branch locations. Thankfully, it’s also a member of a vast surcharge-free ATM network with over 80,000 ATMs across the country. The mobile app makes it easy to keep tabs on your finances from anywhere, and both the app and the institution’s physical debit and credit cards feature top-notch security enhancements.

In the habit of popping into your local branch to ask questions? Don’t worry—you can contact a representative anytime, 24/7, via email, chat, or phone. This level of access to customer support is a huge boon to many customers, making it easy to report a lost card, submit a travel notification, or get clarity on any questions you may have.

Learn more: read our Alliant Credit Union review

First Internet Bank 12-month CD: 5.15% APY

First Internet Bank was established in 1999, operating online with headquarters in Indiana. The bank provides savings accounts, money market accounts (MMAs), and CDs, among other consumer banking products.

Why we picked it

First Internet Bank doesn’t have any physical branches, but that enables it to offer consistently high rates, with yields that top 4% on all of the CDs we evaluated. However, you’ll need at least $1,000 to take advantage of these high APYs.

Many customers may appreciate First Internet Bank’s strong stance on diversity and inclusion. The bank prides itself on hiring team members from a wide array of backgrounds so that it can provide relatable customer service to a diverse audience. Customer service is easily accessible even though it’s a digital bank with no physical locations: You can connect with a representative via email, chat, or phone.

Learn more: read our First Internet Bank review

EverBank 9-month CD: 5.05% APY

Founded in 1998, EverBank, formerly known as TIAA Bank, is a Jacksonville, Florida-based bank offering CDs, high-yield savings accounts, checking accounts, and more.

Why we picked it

EverBank stands out because of the wide range of term lengths and solid APYs it offers on its CDs. It offers 10 different term lengths, ranging from three months to five years, so it could be a great option for setting up a CD ladder. Customers can get an interest rate of close to 4% or higher on all of its term lengths, but you’ll need to have a bit of a nest egg saved up to invest: the minimum opening deposit is $1,000.

Customers living near a physical branch in Florida could have the added benefit of in-person banking at one of the institution’s eight locations. The mobile app is still serviced through TIAA and is rated over four stars on both the Apple and Google platforms. EverBank is part of both the Allpoint and MoneyPass ATM networks, so customers have access to over 100,000 fee-free ATMs.

Learn more: read our EverBank review

Capital One 360 12-month CD: 5.00% APY

Capital One is one of the largest banks in the country, headquartered in Virginia with a strong online presence as well as some physical branches across the country. Its online banking division is known as Capital One 360 and offers a host of products, such as checking accounts, CDs, and high-yield savings accounts.

Why we picked it

Whether you’re looking for a place to park your money for a few months or years, Capital One has you covered. The bank offers CDs with durations ranging from 6–60 months, and there’s no minimum opening deposit. Plus, if you really need your cash before the CD’s term is up, there’s a modest early withdrawal penalty of three months’ interest on term lengths less than a year and six months’ interest on term lengths over a year.

If you’re comfortable banking online and want all your accounts in one place, Capital One 360 could be a decent option. Compared to other large financial institutions, its rates are quite competitive with other online-only banks. The app is generally well-rated, and live support is available seven days a week from 8 a.m. to 11 p.m. Eastern time.

Learn more: read our Capital One 360 review

Evergreen Bank 6-month CD: 4.85% APY

Evergreen Bank was founded in 2007 and is headquartered in Oak Brook, Illinois. It has multiple branches around the Chicago area as well as two loan production offices in Reno, Nevada. Evergreen offers a range of personal banking products, including checking and savings, CDs, home loans, and credit cards, as well as business banking options. Its online CD terms range from six months to five years, with more options available in branches.

Why we picked it

Evergreen Bank has a relatively low barrier of entry, with a $500 minimum opening deposit. While the interest rates aren’t the absolute highest on our list, they’re all still above 4% and come in a wide variety of term lengths from six months to five years. Customers with a large amount of money to deposit can take advantage of even higher rates, with one special CD offering a 5% APY if you can deposit $10,000 for seven months.

While online banking is becoming more and more prevalent, many customers will appreciate the option of being able to visit a physical branch (as long as they’re in the Chicago area). Customer service is available via contact form on the website at any time and Evergreen Bank pledges to respond to inquiries within one business day.

Learn more: Read our Evergreen Bank review

Marcus by Goldman Sachs 12-month CD: 5.15% APY

Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and Goldman Sachs & Co. LLC (“GS&Co.”), which are subsidiaries of The Goldman Sachs Group, Inc. That means you get all the conveniences of a digital bank, backed by 150-plus years of expertise.

Why we picked it

With a Marcus CD, you’ll get an APY of 4% or higher, regardless of which term length you choose. Currently, you’ll get the highest rate on its 14-month or one-year CDs, but opting for a CD with a longer term means you can keep the interest flowing for months or even years to come. Before you invest, you’ll need at least $500. Make sure to note when your CD matures because it’ll be renewed automatically if you don’t withdraw your money, although there is a 10-day grace period when you can withdraw your funds.

Marcus doesn’t offer any checking or MMAs, so you can’t do all your banking at this institution, but it makes up for this with great rates on its CDs and high-interest savings account. Plus, if you ever need assistance, you can call the toll-free line or chat with a representative 24/7.

Learn more: read our Marcus by Goldman Sachs review

First National Bank of America 12-month CD: 5.05

Founded in 1955, First National Bank of America (FNBA) offers a handful of banking products, such as checking and savings accounts, CDs, and mortgages. While FNBA only has a few physical branches in the state of Michigan, its online banking is available nationwide.

Why we picked it

Though FNBA’s minimum opening deposit requirement of $1,000 may be steep for some, you’ll get a generous APY in return: Most of their CDs have APYs that top 4.10%. Customers can also opt for a partial withdrawal of their funds—though you could get hit by an early withdrawal penalty for doing so. Interest compounds quarterly, and you will receive a maturity notice by mail 30 days prior to your CD’s maturity date.

If you take no action, your entire CD will roll over into a new account of the same term length at the current rate for that term. Otherwise, you have the option to use all or some of the money to fund a new CD or withdraw your funds. There is a 10-day grace period to take action after your CD matures.

FNBA’s customer service is available via phone or online request.

Learn more: Read our FNBA review

Merrick Bank 6-month CD: 5.25% APY

Founded in 1997, Merrick Bank specializes in credit programs for those looking to build or rebuild their credit. It offers credit cards, personal loans, recreation loans, and CDs. Its CD terms range from three months to five years.

Why we picked it

While it has a very high minimum deposit of $25,000 to open a CD, if you can swing it, the APYs are worth it. Right now, Merrick’s six-month CD APY is a stunning ​​5.25%. If you’re looking for even shorter-term options, its three-month CD offers a 5.25% APY.

Despite the steep barrier of entry, Merrick Bank has established itself as an institution that strives to help its customers achieve financial success. The hefty deposit requirements on CDs provide capital for credit products that may help indebted customers overcome their loans and get back on their feet—a worthy goal that some with expendable funds may feel inclined to support, given the high return on investment.

Learn more: Read our Merrick Bank review

Ally Bank 12-month CD: 4.50% APY

Ally Bank is an online-only bank offering savings accounts, a robo-advisor service, checking, savings, mortgage, personal loans, auto lending products, and more. Its CD terms range from three months to five years.

Why we picked it

Ally’s CD offerings give savers a wide range of term options. With an $0 minimum opening deposit, you can decide how much you’re ready to save. If you tap your money early, you also don’t have to worry about significant withdrawal penalties. They’ll still apply but are much lower than many competitors.

Ally Bank is a fully online institution with no physical branches, which means your funds are always easily accessible on the mobile app. You can access your cash for free at one of over 43,000 Allpoint ATMs around the country or receive a reimbursement of up to $10 per statement cycle if you must use an ATM from a different network. Ally also offers customers 24/7 phone, chat, and email support so you can get help anytime you need it.

Learn more: read our Ally Bank review

CD rates from popular banks

If you don’t recognize many of the names listed above, don’t be alarmed—there’s a simple explanation. CDs are a type of deposit account that, on their own, don’t provide a large source of income for major financial institutions. Well-known names, such as Chase, PNC, and US Bank, don’t rely on CDs to grow their customer base and, therefore, they don’t offer large incentives to sign up for them. In many cases, they’d rather procure customers who use more profitable products, such as loans and credit cards.

Therefore, CD rates at these banks are often far lower than what you can find with a small regional bank or online institution. Take a look at these 12-month CDs:

While all banking institutions factor Fed decisions into their rate structures, it’s not the only criterion. Banks also evaluate their target market, consider the economic outlook of that market, and create product offerings accordingly. You certainly can pick up a CD at most major banks in the U.S. but, in many cases, the only reason to do so would be if your priority is keeping all of your banking in one spot. With a bit of research, you can often score higher rates as long as you’re not opposed to holding accounts at multiple institutions.

Can you get a CD rate over 5%?

It is currently possible to find a certificate of deposit (CD) rate over 5%. Interest rates generally fluctuate depending on changes in the federal funds rate. Over the past several months, rates have remained high as the Federal Reserve has kept the interest rate between 5.25%–5.5%. Banks are willing to offer higher CD rates when the federal rate is high because CDs are an ideal deposit product that are not easily the way that checking and savings accounts are.

CD rates tend to fall when the Fed lowers its target interest rate, which it has hinted at doing before the end of the year. If you want to lock in a CD rate above 5%, now could be an excellent time to pull the trigger.

It's important to note that while there are a few exceptions, most CD rates over 5% are tied to a 12-month, 18-month, or two-year term (and the ones with shorter term lengths require high initial deposits). This means that if you withdraw your funds before the term is up, you may incur early withdrawal penalties that forfeit a large portion of the accrued interest. Before you commit to a CD, make sure you can live without access to those funds for the designated time period.

Complete guide to CDs

There are several terms and strategies you should familiarize yourself with in order to develop a CD strategy that works well for you. Here are some of the basics:

What is a certificate of deposit?

With CDs, or certificates of deposit, customers receive a fixed interest rate in exchange for tying up their money for a fixed period. Interest is typically paid on a regular basis, either daily, monthly, or quarterly.

After a CD reaches maturity—or the end of its term—you can withdraw the money you deposited initially, plus any earned interest. If you tap your money before the CD’s term is up, most CDs charge an early withdrawal penalty, which is usually worth a few days or months of interest.

Typically, upon maturity, your CD is automatically renewed automatically. If you don’t want to roll over your money into a new CD, you’ll usually be given a grace period during which you can choose to withdraw your funds.

What is considered a good CD rate?

A "good" CD rate can be somewhat subjective. That's because you need to strike a balance between the best rate available and the longest amount of time you can afford to keep your money tied up. For example, if you find a CD offering 5% APY, but it requires you to keep your money on deposit for five years, the interest rate may not be worth it. You might need your money sooner or rates could go higher while you're stuck earning a lower return.

Generally, a CD rate that's above the national average is a solid choice. Before deciding if a CD is worth it, compare accounts from multiple banks and see which one offers the highest rate for the term length you want.

How are CD rates determined?

CD rates are set by your individual bank or financial institution. Although, there are several factors that can influence these rates. This includes the length of your CD term (longer-term CDs usually offer higher rates than shorter-term ones) and type of CD, the amount of your initial deposit (some CDs offer tiered interest rates), benchmark interest rates set by the Federal Reserve, and temporary promotional offers offered by your financial institution.

What is the APY on a CD?

APY stands for "annual percentage yield." It's a way to calculate the total amount of interest that you can earn on an investment such as a CD in one year, taking into account the effect of compounding interest.

The APY of a CD will depend on the interest rate offered by the bank or financial institution, the frequency of compounding (daily, monthly, annually, and so on), and the length of the term of the CD.

What are CD ladders and how do they work?

For savers who are on the fence about locking away their funds in a CD for an extended amount of time, you’re not alone. While some CDs offer terms that are just a few months long, other CDs take years to mature—usually, you earn a higher rate with these CDs, but you’ll have to part with your money for longer.

One way to score the benefits of both short and long-term CDs is to set up a CD ladder. This is a savings strategy where you split your savings between several CDs of varying maturities.

Here’s how a CD ladder works: If you want to invest $3,000, you would invest $1,000 each in three CDs of staggering maturities—let’s say one-year, two-year, and three-year. When each CD matures, you reinvest that money in a 3-year CD. That way you have access to cash every year.

Do I have to pay taxes on CD interest?

If you opt for a CD as your primary savings vehicle, you should be aware that interest earned on the funds you deposit is considered taxable interest by the IRS. The interest you earn is subject to federal and state income tax.

Your financial institution will typically send you a 1099-INT statement for any interest earned over $10, and the amount you owe will depend on how much interest you’ve earned and your tax bracket.

If you withdraw funds from your CD early, you can also expect to see those penalties on your 1099-INT form.

Is a certificate of deposit considered a safe investment?

Certificates of deposit are considered safe investments so long as they are helped by FDIC- or NCUA-insured financial institutions which insure your deposits up to $250,000 per depositor, per bank, for each account ownership category or up to $250,000 per share owner, per insured credit union, for each account ownership category.

Types of CDs

There are various types of CDs you can choose from depending on how much money you’d like to deposit into your CD, whether you’d prefer to have access to your money before maturity, and more. A few of the most common types of CDs include:

How to choose the best CD

Every CD is a little different, so you’ll want to pay close attention to the account features and fine print before deciding where to put your savings. You’ll want to consider a few factors when choosing a CD:

• Term length: Your CD’s term length tells you how long it takes to mature. CD term lengths can be as short as one week or as long as 10 years. Choose a term length that meets your needs and aligns with your financial goals.
• APY: The annual percentage yield on your account significantly affects how much your money will grow. The higher the rate, the more you can expect to earn in interest. Typically, the best CD rates are applied to longer term lengths.
• Minimum deposit: Most, but not all, banks and credit unions require that you invest a minimum amount of money to open a CD. The minimum opening deposit can range from a few dollars to thousands. Most CDs require depositing a lump sum and don’t allow additional contributions. Make sure you can meet the minimum opening deposit requirement.
• Penalties: Not all CDs carry early withdrawal penalties, but if yours does, you could lose out on your earned interest and some of your principal balance. You may not be able to plan for an early withdrawal, but it’s good to know the penalty if you need to touch your money early.
• Deposit insurance: FDIC and NCUA insurance provides depositors with insurance coverage if their bank or credit union fails—up to $250,000 per depositor or share owner. Double-check that your account is insured to protect your money if there’s a bank failure.

CD calculator: how to determine CD earnings potential

To calculate your earnings from a CD, you’ll need to use the following formula: P(1+R/N)(NT) = A. Where “A” represents the value of your CD, including interest. "P" is equal to your principal balance or initial deposit. "R" represents your yearly interest rate―in this case, it would be your APY. "N" represents the compound frequency of your CD in a given year, and "T" represents the number of years until your CD’s maturity date. Let’s illustrate this with an example:

• Initial deposit “P” = $500
• APY “R” = 5.15%
• Monthly compound frequency “N” = 12
• Number of years until maturity “T” = 1

Our equation would turn out like this:

500 x ((1+(5.15/12)) x (12 x 1)) = $526.37

So, if you deposit $500 into a 12-month CD with an interest rate of 5.15% that compounds monthly, you could expect to withdraw about $526 at the end of the term.

To calculate rates accurately, you may need to do a bit of extra math to determine your variables. For example, if the term length is under a year, you’ll need to determine what percentage of “1” to use for the variable “T.” A three-month term would be 0.25, a six-month term would be 0.5, and so forth. Here are more examples that calculate the end value of a CD with a $500 opening deposit and 5% APY:

Pros and cons of CDs

While CDs can be attractive for their high interest rates, they aren’t a perfect fit for everyone. Let’s review some of the pros and cons.

Alternatives to CDs

CDs differ from other savings accounts in a few key ways. This type of account not only functions differently, but it may be better suited for a certain type of consumer who is saving for a goal with a specific timeline.

• Access to your savings: CDs don’t offer the same level of access to your savings that a traditional savings account or MMA would. Once you agree to your CD term, your money will sit, untouched, and accrue interest for the duration of your term until your CD hits maturity. Making a withdrawal early would result in an early withdrawal penalty.
• CDs usually offer higher APYs at a fixed rate: One of the major selling points for a CD account is that, typically, CDs offer a fixed APY at a higher rate than other types of savings vehicles. That means that you’ll be able to take advantage of a higher rate for an extended period of time, and you’ll have the peace of mind knowing that once you’ve locked in your rate, your APY won’t fluctuate during your term in response to external factors, such as federal funds rate increases.

CDs vs. high-yield savings accounts

High-yield savings accounts work in the same way as traditional savings accounts. It’s a deposit account at a credit union or bank that you can use for saving and earning interest on your money—usually at a higher rate. This type of savings account differs from CDs in that they offer greater access to your funds, rather than requiring you to lock away your funds for a set amount of time. As such, there's no penalty for making withdrawals.

Learn more: Compare CDs vs. savings accounts

CDs vs. money market accounts

Money market accounts function as a hybrid between savings accounts and checking accounts. Similar to CDs, these accounts typically offer much higher APYs than checking accounts, but may still offer some of the same features including check writing, debit card access, and the ability to make withdrawals and deposits via ATM. Like a CD, this type of account may also be of interest to savers who have the ability to make a larger opening deposit.

Learn more: Compare CDs vs. money market accounts

CD rates by state

While many banks are available nationwide, there are also hundreds of smaller institutions that may only serve customers in a more localized region. Here are the banks in each U.S. state with the highest CD rates.

View CD rates in:

• California
• Florida
• New Jersey
• New York
• Texas

Our methodology

The Fortune Recommends^TM team compared CDs from more than 60 major banks, credit unions, and online-only banks. Our top picks are available to customers across the U.S. no matter where you’re located, subject to the terms of each CD.

For our best overall CD rates, we ranked CD products in the following categories and weighted each one as outlined in the percentages below:

• Number of terms with above-average rates (60%): To determine which banks had the best rates, we looked at whether they offered above-average APYs on a wide range of term lengths.
• Minimum deposit requirement (20%): To open a CD at any financial institution, the institution will require that you deposit a minimum dollar amount. We thought a lower minimum was preferable and rated banks with lower minimum deposit requirements higher.
• Number of terms offered (15%): When you opt for a bank or credit union that offers a wide array of CD terms, you have a greater chance of finding a CD that aligns with your investment horizon. We evaluated financial institutions based on the number of CD terms they provide. Banks with more CD terms ranked higher.
• Customer service (5%): Top picks offer customers three ways to get in contact: chat support, by phone, or email. Among the three options, we gave phone support the most weight.

We didn’t include brokered CDs on our list, which are riskier because they are sold on the secondary market through brokerages.

CD rates, fees, and minimum deposit requirements may be limited-time offers, and APYs are subject to change. The FDIC or NCUA insures all the banks and credit unions on this list. Terminating your CD before it matures may incur a penalty fee, which varies by bank and credit union.

Dig deeper: learn more about our banking methodology.

Frequently asked questions