The 10 best CD rates for January 2025: Earn up to 4.25%

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.

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• Over 95 financial institutions compared
• More than 1,000 data points tracked
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• Guided by 25+ years of banking experience

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.

See more CDs by term length

Open the drawers below to see examples of top rates by term length. Rates are updated daily, however, you should always refer to the institution itself for the most accurate information.

Best 1-month CD rates

The highest 1-month CD rate today is 3.67% from Merchants Bank of Indiana.

Best 3-month CD rates

The highest 3-month CD rate today is 4.65% from Bask Bank.

Best 6-month CD rates

The highest 6-month CD rate today is 4.95% from Rising Bank.

Best 9-month CD rates

The highest 9-month CD rate today is 4.61% from Popular Direct.

Best 1-year CD rates

The highest 1-year CD rate today is 4.90% from Rising Bank.

Best 18-month CD rates

The highest 18-month CD rate today is 4.30% from Popular Direct.

Best 2-year CD rates

The highest 2-year CD rate today is 4.29% from First National Bank of America.

Best 3-year CD rates

The highest 3-year CD rate today is 4.25% from Popular Direct.

Best 4-year CD rates

The highest 4-year CD rate today is 4.20% from Popular Direct.

Best 5-year CD rates

The highest 5-year CD rate today is 4.25% from Popular Direct.

Best 10-year CD rates

The highest 10-year CD rate today is 3.76% from First National Bank of America.

Current news on CD rates

Over the last two years, CD rates marched higher as the Federal Reserve hiked interest rates and then kept them elevated to help get inflation under control. But now that inflation has cooled, the Fed has changed its tune. The Fed cut rates for the second consecutive time at its meeting on November 7th, 2024, and now CD rates are falling in response.

If you are thinking about jumping into a CD, you shouldn’t wait too much longer. After the Fed rate decreases, we’re already seeing rates that were above 5.00% APY a month ago now below that threshold. And be wary of any CDs that are near maturity. If you plan to let it renew, make sure you are still getting a good rate. You may want to shop around instead of letting it automatically renew.

According to the FDIC, the average 12-month CD rate today is 1.88%. However, many banks currently offer rates of 4%–5%, 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.

Our reserch shows that CD rates for terms of three years or more have been steadily falling over the past six months, and short-term CDs are now dropping quickly as well. 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 banks for 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.

Summary

• MYSB Direct: Rates up to 4.25%
• EverBank: Rates up to 4.00%
• Discover: Rates up to 4.00%
• Bread Savings: Rates up to 4.50%
• Ally Bank: Rates up to 4.10%
• Alliant Credit Union: Rates up to 4.15%
• First Internet Bank: Rates up to 4.42%
• Capital One 360: Rates up to 4.00%
• Popular Direct: Rates up to 4.65%
• Marcus by Goldman Sachs: Rates up to 4.25%

*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.

MYSB Direct 6-month CD: 4.45% APY

MYSB Direct, a.k.a. M.Y. Safra Bank, is headquartered in New York City and operates a single branch there. Its products include personal checking and savings accounts, lending services, and more. 

Why we picked it

While MYSB Direct doesn’t boast the absolute highest rates on their CDs, they provide a variety of term lengths, allowing you to select a maturity that aligns with your financial goals, plus it has a relatively low minimum opening deposit of $500. MYSB’s 6-month CD is right around some of the highest available today at 4.45%, though—so if you’re in the market for a shorter term length, MYSB could be a solid option. 

MYSB Direct has one physical location in New York City, but you can reach customer service via email or phone. Note that MYSB has one of the heftiest early withdrawal penalties, so be prepared to keep your hands off your money or pay up. 

Learn more: Read our MYSB Direct review.

MYSB CD rates

More rates and products from MYSB Direct

No-Penalty CD	13-month term length 4.75% APY
MMA	5.25% APY Minimum daily balance of $5,000 required to earn APY $10 monthly fee for accounts with less than $5,000

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EverBank 9-month CD: 4.00% 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.

EverBank CD rates

Most of EverBank’s CD rates are over 4%, meaning you’ll get a decent return regardless of your term length.

End value calculations on the table below assume a $1,000 minimum deposit, as required by the bank. Rates are updated weekly but are subject to change.

More rates and products from EverBank

In addition to a generous amount of CDs, EverBank also offers checking accounts, savings accounts, and MMAs. Someone looking to do all their online banking in one place could take advantage of EverBank’s high rates across its various product offerings.

Checking accounts	$25 minimum deposit for standard account, $100 for high-yield account Access to over 100,000 ATMs No monthly fee Up to 0.45% APY on the Yield account
Savings accounts	4.75% APY No minimum deposit to open No monthly fee
MMAs	4.3% APY $0 minimum to open the account

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Discover 12-month CD: 4.00% 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

Discover has no minimum to open a CD, and it 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.

Discover Bank CD rates

Bucking the trend of many well-known names in the banking industry, Discover Bank’s CD rates are very competitive. While the $0 minimum deposit may be a downside for many, there’s no denying it provides a decent return on the investment.

Rates below are updated weekly, and end value calculations assume a $0 minimum deposit (as required by the institution).

More rates and products from Discover Bank

Discover has no shortage of product offerings for interested customers. Its checking account provides attractive cash back options, its high-yield savings account offers more than five times the national average, and it offers multiple IRA options for retirement planning.

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Bread Savings 6-month CD: 4.50% APY

Bread Savings, formerly Comenity Direct Bank, is an online bank—part of Bread Financial—that offers CDs ranging from one to five years and a high-yield savings account.

Why we picked it

While its opening deposit is above $1,000, Bread Savings offers its customers competitive APYs on its one-, three-, and five-year CDs. However, accountholders should be aware of fees charged for outgoing wire transfers, official check requests, and paper statement fees. 

Bread Savings is a digital bank. If customers need help, they can call or send a secure message through its banking portal.

Learn more: Read our Bread Savings review.

Bread Savings CD rates

More rates and products from Bread Savings

High-yield savings account

4.60% APY $100 minimum deposit to open

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Ally Bank 6-month CD: 4.10% 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.

Ally Bank CD rates

While Ally Bank doesn’t have a required minimum deposit, you’ll need to supply a reasonable amount of funding to see a decent return on investment. Rates below are updated weekly, and end value calculations assume a $1,000 minimum deposit.

More rates and products from Ally Bank

Ally Bank prides itself on offering a multitude of products, most of which have no monthly fees or minimum deposit requirements. Customers can do most or all of their banking in one place, with products ranging from everyday checking and savings accounts to long-term retirement planning and event mortgages.

Checking accounts	0.25% APY No monthly fees or overdraft fees Get paid up to two days early with direct deposit
Savings accounts	3.8% APY No minimum deposit to open No monthly fees
MMAs	3.8% APY $0 minimum opening deposit No monthly fees or overdraft fees Interest compounds daily
Other	Cash back credit cards Automated and self-directed investing Mortgages Auto loans

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Alliant Credit Union 12-month CD: 4.10% 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 4.15%. 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.

Alliant Credit Union CD rates

Alliant Credit Union offers a solid range of CD terms that provide flexibility for customers who may want to build a CD ladder or want to explore their options.

Rates below are updated weekly, and end value calculations assume a $1,000 minimum deposit (as required by the institution).

More rates and products from Alliant Credit Union

CDs aren’t the only banking product where Alliant Credit Union offers stellar rates. The institution also provides free checking and savings accounts for personal use, and the rates far exceed those of many competitors.

Checking accounts	0.25% APY No monthly service fee No overdraft fees No minimum balance requirement
Savings accounts	3.1% APY No monthly fee with eStatements $100 minimum balance
Credit cards	Visa-branded Cash back and balance transfer options available No annual fees Compatible with Google Pay, Apple Pay, and Samsung Pay

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First Internet Bank 12-month CD: 4.42%

First Internet Bank, founded in 1999, was the first FDIC-insured institution to operate entirely online. It offers a full suite of banking products, including checking and savings accounts, CDs, and various lending options.

Why we picked it

First Internet has APYs that top 3.50% on all of the CDs we evaluated. You’ll need at least $1,000 to take advantage of these high APYs. While this is higher than some competitors, it's still accessible for many savers looking to maximize their returns.

As an online-only bank, First Internet Bank can offer these attractive rates by keeping overhead costs low. If you ever need to contact customer service, First Internet Bank has stellar support options even though there are no physical locations: You can contact customer service via email, chat, or phone.

Learn more: Read our First Internet Bank review.

First Internet Bank CD rates

First Internet Bank offers a variety of terms ranging from 3 months to 5 years, with particularly strong rates on shorter-term CDs. Below are some examples of what you could earn by opening a CD here with the minimum deposit required:

More rates and products from First Internet Bank

In addition to CDs, First Internet Bank offers a range of other banking products with competitive rates:

Money Market Savings	3.77%% APY $100 minimum opening deposit $4,000 minimum balance required to avoid $5 monthly fee
Free Savings	0.81% APY No minimum balance requirement No monthly fee
Interest Checking	0.50% APY $100 minimum opening deposit $500 minimum balance required to earn interest and avoid $10 monthly fee
Free Checking	Does not earn interest $25 minimum opening deposit No monthly fee
Health Savings Account	0.15% APY No minimum balance requirement No monthly fee Free debit card
Tomorrow’s Tycoons (savings account for minors)	0.81% APY $100 minimum opening deposit No monthly fee

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Capital One 360 12-month CD: 4.00% 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.

Capital One 360 CD rates

Capital One 360 is one of few institutions that requires no minimum deposit to open and maintain a CD. We’ve calculated how much you could earn if you put $500 into its CDs at each term length.

More rates and products from Capital One 360

Capital One is best known for its credit cards but, in addition to its CD offerings, it also provides checking and savings accounts.

Checking accounts	No minimum to open or maintain the account No monthly fees No overdraft fees
Savings accounts	3.8% APY $1 minimum deposit to open No monthly fees
Credit cards	From credit building, cash back rewards, travel rewards, and business cards, Capital One likely has a card to suit your needs.

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Popular Direct 3-month CD: 4.65% APY

Popular Direct is the online banking of Popular Bank, the New York-based banking subsidiary of Popular, Inc. Popular, Inc. is a publicly traded, full-service bank and is one of the 50 largest U.S. banks in terms of assets.

Why we picked it

While it has a higher minimum deposit requirement of $10,000, all of Popular Direct’s CDs offer generous APYs. While its highest APY of 4.65% is on its 3-month CD, its 12- and 18-month CDs offer 4.50% and 4.30%, respectively. So whether you’re looking for a short-term or a longer-term place to store your money, Popular Direct could be a decent option as long as you have the starting capital. 

Plus, Popular Direct offers comprehensive customer support. It can be reached by phone from 7:30 a.m. to 12:00 a.m. Monday through Friday, and Saturday and Sunday from 9:00 a.m. to 6:00 p.m. EST. It also has a very thorough self-help section on its website.

Learn more: Read our Popular Direct review.

Popular Direct CD rates

Other products offered by Popular Direct

High-yield savings account

4.6% APY Minimum deposit of $5000 $100 required to earn APY No monthly fee

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Marcus by Goldman Sachs 12-month CD: 4.15% 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.

Marcus CD rates

Calculations on the table below are determined based on Marcus by Goldman Sachs’ minimum deposit of $500.

More rates and products from Marcus by Goldman Sachs

Savings account	$0 minimum opening deposit No monthly fees 4.40% APY
Credit cards	GM Mastercard credit cards with no annual fees and opportunities to earn points toward GM vehicle purchases or leases

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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 Federal Reserve 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.

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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: 

Brokered CDs

Brokered CDs are purchased and sold through a brokerage account rather than through a bank or credit union. 

These CDs are usually issued by banks and then sold to brokerages, which then offer them to customers at higher APYs than traditional CDs. 

You’ll also get greater flexibility with a brokered CD: Rather than pay an early withdrawal penalty, you can access your cash early by selling your brokered CD on a secondary market. However, in doing so you open yourself to interest rate risk. 

If you sell your brokered CD after interest rates have risen, your CD, with a lower rate, will be less valuable to investors, and you may lose money when you sell it.

Some brokered CDs may have a call feature too.

Callable CDs

Callable CDs have a call feature that allows the financial institution that issued them to terminate the CD before it reaches maturity. When this happens, the investor keeps the principal and any interest they accrued up to that point. 

Typically, a financial institution calls a CD when interest rates drop because it can offer lower interest rates on newly issued CDs. After your CD is called, you’ll have to reinvest your funds at a lower rate—this is known as reinvestment risk. Due to this risk, callable CDs usually offer higher APYs than CDs without a call feature.

Bump-up CDs

With a bump-up CD, you can request an APY on your CD if interest rates rise after you've opened your account. Typically, you’ll be eligible to increase the rate on your CD once or twice during the term.

No-penalty CDs

This type of CD does not charge a penalty for withdrawing funds before your CD reaches maturity. This type of CD is less common than other CD types and may also offer lower APYs than traditional CDs.

Compare: No-penalty CDs vs. savings accounts

Jumbo CDs

Jumbo CDs typically require a minimum opening deposit of at least $100,000 but usually offer higher APYs than traditional CDs. 

Variable-rate CDs

With a variable-rate CD, the APY fluctuates based on the interest rate. These CDs are riskier than traditional CDs because if interest rates drop before the CD reaches maturity, you can receive a lower interest rate.

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 with the highest CD rates in some of the largest U.S. states:

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 (25%): 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 (10%): 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

Who is paying the highest CD rates right now?

Right now, Quontic, Bask Bank, and Citibank are offering the highest APYs on their 3-month CDs. For savers looking for longer term lengths, Colorado Federal Savings Bank and First National Bank of America are offering high APYs on their 1-year term lengths, at 4.50% and 4.26%, respectively.

Quontic Bank	4.50% on a 3-month CD
Bask Bank	4.65% on a 3-month CD
Citibank	4.45% on a 3-month CD
UMB Bank	0.05% on a 3-month CD

In which situation would a certificate of deposit (CD) be the best banking choice?

A CD may be the best banking choice for you if you are saving for a long-term goal with a specific timeline in mind. To avoid early withdrawal penalties or potentially forfeiting any interest earned on the funds in your CD, you want to be sure that you won't need access to your money before your CD's maturity date.

Can you add money to a CD?

When you invest in a CD, you typically deposit one lump sum and then leave it alone until the account reaches maturity. However, some financial institutions offer special types of "add-on" CDs that allow you to deposit additional funds after the initial deposit. The amount and frequency of deposits you're allowed to make depend on the particular account.

How often do current CD rates change?

Banks and credit unions update current CD rates based on market conditions. These rates typically receive an update no more frequently than weekly, although some don't do so for months.

Is now a good time to lock in a CD?

CD rates are the highest they've been in years, but they're starting to fall with the Fed's rate change. So, yes, it's a good time to put your money in a CD, but hurry if you want to lock in your money at a top rate.

Are CDs FDIC insured?

Yes, certificates of deposit are insured by the Federal Deposit Insurance Corp. (FDIC). The FDIC insures all its members’ bank accounts, including savings, money market accounts, and CDs, up to $250,000 per customer per bank. Therefore, in the rare case of a bank failure, your money stays safe. If you take out a CD with a credit union, make sure it’s insured through the National Credit Union Administration (NCUA)—a similar institution to the FDIC that insures credit unions.

Why should you put $15,000 into a 1 year CD now?

If you have $15,000 to lock up for a year in a CD, now could be a good time to do it. CD rates are just starting to drop in response to the fed's hints that it'll lower interest rates at least once this year, so if you've been thinking about a CD, now is the time to act.

Are short-term or long-term CD rates better?

Generally speaking, long-term CDs offer higher interest rates than short-term CDs—think of it as a reward for committing your money for a longer period. However, this is not always the case. When the yield curve inverts, short-term CDs boast higher rates than long-term CDs. Overall, whether it's better to choose a short-term or long-term CD depends on your goals and the current interest rate environment. Learn more about how to invest in CDs in our guide.

Are CDs good during inflation?

CDs can be a good investment when inflation is high, but since interest rates tend to rise and fall with the inflation rate, you might be breaking even when you account for taxes too. For example, when inflation is high, the Federal Reserve will raise interest rates to curb demand and reduce inflation. While you’ll score a higher APY on a CD, the high inflation rate could wipe out most of the returns you get from the CD. Note that since CDs usually offer higher interest rates than checking accounts and traditional savings accounts, CDs can help you better outpace inflation than other deposit accounts. Plus, you can lock in rates with CDs.