Taylor Tepper covered banking, investing and pretty much everything else in personal finance for more than a decade, with his work appearing in the New York Times, Fortune and MONEY magazine, as well as many other outlets. His work has received the r...
Taylor Tepper covered banking, investing and pretty much everything else in personal finance for more than a decade, with his work appearing in the New York Times, Fortune and MONEY magazine, as well as many other outlets. His work has received the r...
Written By
Taylor Tepper 
Taylor Tepper covered banking, investing and pretty much everything else in personal finance for more than a decade, with his work appearing in the New York Times, Fortune and MONEY magazine, as well as many other outlets. His work has received the r...
Taylor Tepper covered banking, investing and pretty much everything else in personal finance for more than a decade, with his work appearing in the New York Times, Fortune and MONEY magazine, as well as many other outlets. His work has received the r...
Senior Writer, Banking and Investing
Updated: Sep 16, 2024, 2:28pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
The best CD rate is 5.25% on a six-month CommunityWide Federal Credit Union CW Certificate Account, though you can find competitive yields on other terms too.
All of our winners far outstrip what you’ll get from the average bank, where yields range from 0.24% to 1.88%, per the FDIC.
Read More
Show Summary
Best CD Rates of September 2024
We compared 142 CD and certificate accounts at 84 nationally available banks and credit unions to find some of the best CD providers in the U.S. Here’s a summary of our best CDs, organized by the highest annual percentage yield (APY) range.
- Best for 3-Month CDs: EverBank Basic CD 3-Month CD at 3.95% APY
- Best for 6-Month CDs: CommunityWide Federal Credit Union CW Certificate Account 6-Month CD at 5.25% APY
- Best for 1-Year CDs: Bread Savings Certificate of Deposit 1-Year CD at 4.90% APY
- Best for 18-Month CDs: Synchrony Bank Certificates of Deposit 18-Month CD at 4.25% APY
- Best For 2-Year CDs: Marcus by Goldman Sachs High-Yield Certificates of Deposit 2-Year CD at 4.00% APY
- Best for 3-Year CDs: Quontic Bank Certificate of Deposit 3-Year CD at 3.75% APY
- Best for 5-Year CDs: First National Bank of America Certificates of Deposit 60-Month CD at 3.83% APY
- Best for 7-Year CDs: PenFed Credit Union Money Market Certificates, 7-Year CD at 3.00% APY
- Best for 10-Year CDs: Discover® Certificates of Deposit 10-Year CD at 3.60% APY
- Best for Jumbo Certificates: Connexus Credit Union Share Certificate at 3.41% to 5.15% APY
- Best for Promotional CDs: Consumers Credit Union Certificate Account at 0.50% to 5.00% APY
- Best for CD Ladders: EverBank Basic CD at 3.50% to 4.70% APY
Discover® 12-Month Certificate of Deposit term
Annual Percentage Yield
4.50%
Minimum Deposit Requirement
$2,500
Learn More 
On Discover's Website
Member FDIC
Member FDIC
4.50%
$2,500
Annual percentage yields (APYs) and account details are accurate as of September 16, 2024.
Best for 18-Month CDs
Synchrony Bank Certificates of Deposit
Annual Percentage Yield
0.25% to 4.80%
Minimum Deposit Requirement
$0
Terms
3 Months to 5 Years
0.25% to 4.80%
$0
3 Months to 5 Years
Editor's Take
We picked Synchrony Bank Certificates of Deposit for the best 18-month CD because it offers 4.25 APY and has a $0 minimum deposit requirement.
Why We Like It
Synchrony offers one of the highest available rates on 18-month CDs, and the online bank’s CD rates are impressive on nearly all terms. With a $0 minimum opening deposit, these CDs are accessible and easy to open.
What We Don’t Like
This bank’s three-month CD is the only one that doesn’t pay a stand-out rate, earning just 0.25% APY.
Who It’s Best For
Look into Synchrony if you’re after an 18-month CD. It’s also worth considering if you want to build a CD ladder, thanks to the low opening deposit requirement and high APYs on almost all terms.
Pros & Cons
- Competitive APY
- No minimum deposit requirement
- Bump-up CD option
- Can withdraw interest at any time without penalty
- Early withdrawal penalty is equal to 80 days of interest
Expert's Take
Synchrony lets you withdraw interest before maturity without penalty. The penalties for early withdrawal of the principal seem pretty standard. Synchrony’s no-penalty CD pays a much lower rate than others, so you can really see the cost of early redemption.
—Jill Fopiano, CEO at O’Brien Wealth Partners
Synchrony Bank CD Rates
| Term | APY |
|---|---|
| 3 Months | 0.25% |
| 6 Months | 4.40% |
| 9 Months | 4.80% |
| 12 Months | 4.60% |
| 18 Months | 4.25% |
| 24 Months | 4.00% |
| 36 Months | 4.15% |
| 48 Months | 4.00% |
| 60 Months | 4.00% |
Interest is compounded daily and credited to the CD monthly. CDs automatically renew upon maturity following a 10-day grace period. During the grace period, account holders can add or withdraw funds, change CD terms or close the account.
Best for Jumbo Certificates
Connexus Credit Union Share Certificate
Annual Percentage Yield
3.41% to 5.15%
Minimum Deposit Requirement
$5,000
Terms
12 Months to 5 Years
Learn More
On Bankrate.com's Website
3.41% to 5.15%
$5,000
12 Months to 5 Years
Editor's Take
We chose Connexus Credit Union Share Certificate for the best jumbo CD because its Connexus Credit Union Jumbo Share Certificate gives you a boost on the credit union’s already competitive rates when you deposit at least $100,000. Even the credit union’s regular certificates, which require a minimum deposit of $5,000, pay some of the highest yields available—particularly on terms in the one- to two-year range.
Why We Like It
We love Connexus for its competitive rates, especially if you can deposit enough to earn a boosted rate. We also like that this credit union makes it easy to join online by making a one-time donation of $5.
What We Don’t Like
The minimum deposit on regular certificates is a little high, and you can find better rates on terms of three years or longer at other institutions on our list.
Who It’s Best For
Consider Connexus Credit Union’s share certificates if you have at least $5,000 to deposit and are looking for a 10-month, 12-month or 24-month CD term.
Pros & Cons
- Competitive rates on its share certificates
- Highly rated mobile app
- No checking or savings account required to open a share certificate
- $5,000 minimum deposit required to open
- Dividends compounded quarterly
Expert's Take
The biggest difference with Connexus is that it’s a credit union, not a for-profit bank. It offers certificates with competitive rates, but the higher minimum could exclude those with less cash. The interest on longer time frames drops off quite a bit, but it compares to some others on the list. This credit union’s emphasis on member service and community involvement may resonate with individuals seeking a personalized banking experience.
—Gloria Garcia, CFP®
Connexus Credit Union CD Rates
| TERM | APY |
|---|---|
| 12 Months | 4.91% or 4.96% APY* |
| 24 Months | 4.53% or 4.58% APY* |
| 36 Months | 4.11% or 4.16% APY* |
| 48 Months | 3.81% or 3.86% APY* |
| 60 Months | 3.41% or 3.46% APY* |
*Higher rates are for deposits of $100,000 or more.
Membership
You must become a credit union member to open a certificate with Connexus Credit Union. If you don’t qualify under the regular group and geographic categories of membership, you can join the credit union by making a one-time $5 donation to the Connexus Association.
Compounding schedule
Yields earned on credit union accounts are referred to as dividends rather than interest. At Connexus, dividends are compounded and credited to your account quarterly. Many other banks compound interest daily and pay it into your account quarterly, allowing your funds to grow faster than if they were held at Connexus.
Early withdrawal penalties and grace period
Early withdrawal penalties range from 90 to 365 days’ worth of dividends on the amount withdrawn. Share certificates automatically renew at maturity, following a 10-day grace period during which you can withdraw funds. All members are required to open a Connexus Credit Union Member Share Savings Account with a minimum deposit of $5.
Best for 5-Year CDs
First National Bank of America Certificates of Deposit
Annual Percentage Yield
3.05% to 4.86%
Minimum Deposit Requirement
$1,000
Terms
6 Months to 7 Years
Learn More
On Bankrate.com's Website
3.05% to 4.86%
$1,000
6 Months to 7 Years
Editor's Take
We picked First National Bank of America Certificates of Deposit as a top choice for best five-year CDs because it pays 3.83% APY on a 60-month term. It’s also one of the few banks in our database offering CD terms of 72 and 84 months, which pay 3.76% and 3.76%, respectively.
Why We Like It
First National’s rates manage to top almost all other banks in our database when it comes to CD terms of 24 months or longer, and the bank offers longer term lengths than most.
What We Don’t Like
First National isn’t the best choice for short-term CDs. At 3.05% APY, its six-month CD rate isn’t the highest, and the bank doesn’t offer any three- or nine-month CDs.
Who It’s Best For
Look into First National Bank of America if you want to invest in a CD for at least two years and earn some of the highest yields out there. If you’re looking for a 72- or 84-month CD, First National is one of just a few options.
Pros & Cons
- Competitive APYs across CD terms, especially longer terms
- Offers 72-month and 84-month CDs
- Relatively low minimum deposit requirement
- Interest compounded quarterly
- Fewer options for short-term CDs
Expert's Take
High long-term yields on First National Bank’s CDs may be suitable for those looking to lock in earnings over extended periods. However, quarterly compounded interest rates (versus monthly compounded rates) and high early withdrawal penalties may be drawbacks.
—Wenyao Hu, CFA and Ph.D. Candidate
First National Bank of America CD Rates
| TERM | APY |
|---|---|
| 6 Months | 3.05% APY |
| 12 Months | 4.86% APY |
| 24 Months | 4.34% APY |
| 36 Months | 3.90% APY |
| 48 Months | 3.85% APY |
| 60 Months | 3.83% APY |
| 72 Months | 3.76% APY |
| 84 Months | 3.76% APY |
Rates and CD options may differ slightly for Michigan residents.
Interest is compounded and credited to your account quarterly. The early withdrawal penalty ranges from 90 to 540 days of interest, depending on the term length. The bank provides a notice approximately 30 days before the CD matures, at which time you can decide to withdraw your funds, automatically renew your CD or roll over your funds to a different CD.
Best for 3-Year CDs
Quontic Bank Certificate of Deposit
Annual Percentage Yield
3.50% to 5.10%
Minimum Deposit Requirement
$500
Terms
6 Months to 5 Years
Learn More
On Quontic Bank's Website
3.50% to 5.10%
$500
6 Months to 5 Years
Editor's Take
We rated Quontic Bank Certificate of Deposit highly for the best three-year CDs because its three-year certificate pays 3.75% APY—one of the most competitive rates for that term option. Quontic’s rates on all terms are near the top yields available, and the online bank makes it easy to open a CD in minutes.
Why We Like It
We like that Quontic’s CDs pays top rates on its three-year CD and competitive yields all around. We also love the bank’s low minimum deposit requirement, user-friendly mobile app and innovative online tools.
What We Don’t Like
With only standard CDs on offer and five CD terms to choose from, Quontic could benefit from providing more variety.
Who It’s Best For
Go for a Quontic CD if you’re comfortable with banking online and have at least $500 to deposit.
Pros & Cons
- Competitive APYs across CD terms
- Innovative online and mobile tools
- Low minimum deposit requiremen
- Only five term options available
- No physical locations
- Quontic doesn’t accept cash deposits
Expert's Take
Some of the benefits of Quontic CDs are the low minimum to open an account and the ability to quickly get started online. The drawback of using digital banks like Quontic is that you don’t have access to physical branches. If you prefer the in-person banking experience or need to deposit cash, this could be a deterrent. It’s also good to note that you don’t necessarily earn a higher interest rate for locking up your money longer.
—Gloria Garcia, CFP
Quontic Bank CD Rates
| TERM | APY |
|---|---|
| 6 Months | 5.10% |
| 1 Year | 4.50% |
| 2 Years | 3.85% |
| 3 Years | 3.75% |
| 5 Years | 3.50% |
Interest compounds daily and is credited monthly. Once your CD matures, Quontic Bank provides a 10-day grace period to withdraw your funds. Otherwise, it automatically renews the CD. Early withdrawal penalties vary by term.
Best for 7-Year CDs
PenFed Credit Union Money Market Certificates
Annual Percentage Yield
3.00% to 4.00%
Minimum Deposit Requirement
$1,000
Terms
6 Months to 7 Years
Learn More
On Bankrate.com's Website
3.00% to 4.00%
$1,000
6 Months to 7 Years
Editor's Take
We gave PenFed Credit Union Money Market Certificates a spot on our list for best seven-year CDs because it offers a rare 84-month certificate earning 3.00% APY. It’s also one of few brick-and-mortar institutions that pays competitive yields.
Why We Like It
This credit union prioritizes customer service and in-person access while still offering competitive rates. We also like that it has nine term options and easy-to-meet membership requirements—anyone can join PenFed Credit Union by depositing $5 into a savings account.
What We Don’t Like
While it’s fairly easy to join PenFed and open the required savings account online, we still prefer CDs you can open without jumping through extra hoops.
Who It’s Best For
You’ll like PenFed’s certificates if you’re after a seven-year term with high yields and prioritize customer service.
Pros & Cons
- Competitive dividend rates across terms
- Wide range of certificate terms
- Change your maturity option at any time prior to maturity
- Dividends compounded daily on certificate terms greater than six months
- Membership is required to open a certificate
- Early withdrawal penalties can be steep
- Must open a savings account to access certificates
Expert's Take
PenFed certificates have significantly lower rates across the maturity spectrum than others. In addition, their early withdrawal penalties are pretty onerous compared to what is standard. They’re about the most severe I have heard.
—Jill Fopiano, CEO at O’Brien Wealth Partners
PenFed Credit Union CD Rates
| TERM | APY |
|---|---|
| 6 Months | 3.00% |
| 12 Months | 4.00% |
| 15 Months | 4.00% |
| 18 Months | 4.00% |
| 24 Months | 4.00% |
| 36 Months | 3.40% |
| 48 Months | 3.20% |
| 60 Months | 3.20% |
| 84 Months | 3.00% |
Compounding schedule
The yields earned on credit union accounts are referred to as dividends rather than interest. Dividends on six-month certificates are earned on a simple (not compound) interest basis and are paid when the certificate matures. Dividends on all other CDs are compounded daily and credited monthly.
Maturity options
With PenFed, you choose your maturity option when you open your certificate and can change it anytime prior to maturity. This gives you some flexibility, and extra time, to decide what you’d like to do with the funds in your account when it matures. You can transfer the funds into another PenFed account, roll it into a new certificate, get a mailed check or transfer it via ACH.
Best for 6-Month CDs
CommunityWide Federal Credit Union CW Certificate Account
Annual Percentage Yield
4.00% to 5.25%
Minimum Deposit Requirement
$1,000
Terms
6 Months to 5 Years
Learn More
On Bankrate.com's Website
4.00% to 5.25%
$1,000
6 Months to 5 Years
Editor's Take
CommunityWide Federal Credit Union CW Certificate Account made our list as the best 6-month CD because it offers one of the highest rates available, paying 5.25% APY, and credit union membership is open to anyone who makes a $5 donation. CommunityWide’s 12- and 18-month certificates are also competitive, paying 5.00% APY and 4.75% APY, respectively.
Why We Like It
The yields on CommunityWide’s short-term certificates are about as good as they get, and we like that these certificates don’t automatically renew upon maturity.
What We Don’t Like
While almost anyone can join, you must become a credit union member and open a savings account with a $5 minimum opening deposit to qualify for a certificate account.
Who It’s Best For
Opt for CommunityWide’s certificates if you are looking for term lengths shorter than two years and are willing to join a credit union.
Pros & Cons
- Competitive dividend rates across terms
- Wide variety of terms
- Doesn’t automatically renew certificate accounts
- Membership is required
- Requires a savings account to open a certificate account
- Dividends compounded monthly
Expert's Take
Competitive short-term interest rates at CommunityWide may attract investors, and the absence of an auto-renewal option allows depositors to have full control over their funds at maturity.
—Wenyao Hu, CFA and Ph.D. Candidate
CommunityWide Federal Credit Union CD Rates
| TERM | APY |
|---|---|
| 6 Months | 5.25% |
| 12 Months | 5.00% |
| 18 Months | 4.75% |
| 24 Months | 4.50% |
| 36 Months | 4.30% |
| 48 Months | 4.10% |
| 60 Months | 4.00% |
Compounding schedule
The yields earned on credit union accounts are referred to as dividends rather than interest. Dividends are compounded and credited to your certificate account monthly.
Maturity options
Unlike many other credit unions and banks, CommunityWide won’t automatically renew your certificate account upon maturity. Instead, you can choose to renew it for another term or to deposit the principal and interest into another account at CommunityWide or a different institution.
Membership
CommunityWide requires membership in the credit union to open a certificate account. Membership is open to U.S. citizens who open a savings account with a $5 minimum deposit, $5 of which goes to an organization of your choice—the Marine Corps, Habitat for Humanity or Goodwill.
Best for 10-Year CDs
Discover® Certificates of Deposit
Annual Percentage Yield
2.00% to 4.50%
Minimum Deposit Requirement
$2,500
Terms
3 Months to 10 Years
Learn More
On Discover's Website
2.00% to 4.50%
$2,500
3 Months to 10 Years
Editor's Take
We deemed Discover® Certificates of Deposit the winner for the best 10-year CD because its 10-year term pays 3.60% APY. Not only is this term length hard to find but 10-year CD rates at other banks pale in comparison.
Why We Like It
Discover offers more variety than most, with 12 term options in total. The online bank is also known for its lack of fees on this account and others.
What We Don’t Like
The $2,500 minimum opening deposit requirement could be prohibitive to some.
Who It’s Best For
Discover is ideal for anyone who wants to invest in a CD for 10 years and earn competitive rates.
Pros & Cons
- One of the best 10-year CD rates
- No fees for opening or maintaining your CD account
- Early withdrawal penalty is 24 months of simple interest
- $2,500 minimum deposit might be too much for some savers
- Same APY is available on Discover’s 3-year and 5-year CDs
Expert's Take
Most Discover CDs are not positioned as competitively as other banks in terms of rates or minimum deposit requirements. Consumers who are looking for a variety of terms for creating a CD ladder will have a lot to choose from, however, consumers trying to maximize their savings in a single CD may be better served elsewhere. If you already have a relationship with Discover, you’ll find opening and maintaining a CD account to be nearly seamless.
—Stephen Kates, CFP
Discover Bank CD Rates
| TERM | APY |
|---|---|
| 3 Months | 2.00% |
| 6 Months | 4.10% |
| 9 Months | 4.40% |
| 12 Months | 4.50% |
| 18 Months | 4.25% |
| 24 Months | 4.00% |
| 30 Months | 3.75% |
| 36 Months | 3.75% |
| 48 Months | 3.60% |
| 60 Months | 3.60% |
| 84 Months | 3.60% |
| 120 Months | 3.60% |
Best for 1-Year CDs
Bread Savings Certificate of Deposit
Annual Percentage Yield
3.80% to 4.90%
Minimum Deposit Requirement
$1,500
Terms
12 Months to 5 Years
Learn More
On Bankrate.com's Website
3.80% to 4.90%
$1,500
12 Months to 5 Years
Editor's Take
We picked Bread Savings Certificate of Deposit for the best one-year CD because it offers an outstanding one-year rate—4.90% APY. CDs from Bread Savings also allow account holders to deposit up to $1 million per account and $10 million per customer, a balance maximum that’s significantly higher than those offered by other banks on our list.
Why We Like It
You’ll be hard-pressed to find a higher rate on a one-year CD, and early withdrawal penalties are reasonable.
What We Don’t Like
With only five term length options and none shorter than one year, this isn’t the best option for short-term savers.
Who It’s Best For
If you’re after a minimum one-year term or have a significant sum to deposit, you’ll want to look at Bread Savings.
Pros & Cons
- Maximum deposit limit of $1 million per account and $10 million per customer
- Competitive APYs
- Interest compounded daily
- It’s possible to find higher rates at some credit unions and online banks
- Doesn’t offer terms shorter than one year
Expert's Take
Bread has attractive one-year CD rates with an auto-renewal option at an even higher rate. This is about the best rate I’ve seen out there, and it appears the auto-renewal rate is pre-set.
—Jill Fopiano, CEO at O’Brien Wealth Partners
Bread Savings CD Rates
| TERM | APY |
|---|---|
| 1 Year | 4.90% |
| 2 Years | 4.10% |
| 3 Years | 3.90% |
| 4 Years | 3.80% |
| 5 Years | 3.80% |
Compounding schedule
Interest is compounded daily and credited monthly. The early withdrawal penalty equals either 180 or 365 days’ simple interest, depending on the term.
Maturity options
There’s a 10-day grace period to withdraw funds or close the account after maturity. If you don’t take action, your CD will automatically renew.
Best for 3-Month CDs
EverBank Basic CD
Annual Percentage Yield
3.50% to 4.70%
Minimum Deposit Requirement
$1,000
Terms
3 Months to 5 Years
Learn More
On Bankrate.com's Website
3.50% to 4.70%
$1,000
3 Months to 5 Years
Editor's Take
We chose EverBank Basic CD for the best three-month CD because it offers 3.95% APY. This is one of the highest rates available on a CD with such a short term, especially if you’re looking for a lower minimum deposit requirement.
Why We Like It
We love this CD’s competitive APY and the fact that you can withdraw interest prior to maturity without penalty.
What We Don’t Like
There’s not much to dislike about EverBank’s three-month CD, but if you don’t have $1,000 to invest, it’s easy to find other three-month CDs with lower minimum opening deposit requirements.
Who It’s Best For
Anyone looking for a three-month CD term and who prefers mobile banking and has at least $1,000 to deposit should consider EverBank.
Pros & Cons
- Competitive APYs across terms
- Wide range of terms
- Highly rated mobile app
- 20-day advance maturity alert
- Early withdrawal penalties can be steep
Expert's Take
EverBank doesn’t offer no-penalty CDs or IRA CDs, but it does offer a CD solution for people who need more than the standard $250,000 in FDIC insurance coverage. Its certificate of deposit account registry service (CDARS) has the potential to offer up to $50 million in coverage by utilizing the IntraFi Network. Minimums and available terms vary.
—Stephen Kates, CFP
EverBank CD Rates
| TERM | APY |
|---|---|
| 3 Months | 3.95% |
| 6 Months | 4.00% |
| 9 Months | 4.70% |
| 1 Year | 4.50% |
| 1.5 Years | 3.85% |
| 2 Years | 3.75% |
| 2.5 Years | 3.60% |
| 3 Years | 3.50% |
| 4 Years | 3.50% |
| 5 Years | 3.50% |
Interest is compounded daily and credited monthly. Early withdrawal penalties vary by term length.
Best for CD Ladders
EverBank Basic CD
Annual Percentage Yield
3.50% to 4.70%
Minimum Deposit Requirement
$1,000
Terms
3 Months to 5 Years
Learn More
On Bankrate.com's Website
3.50% to 4.70%
$1,000
3 Months to 5 Years
Editor's Take
We chose EverBank (formerly TIAA Bank) because it offers 10 CD terms, all with competitive APYs and modest minimum deposit requirements, making it ideal for building a CD ladder. Even better, its online application takes about five minutes to complete, so opening multiple CD accounts should be a breeze.
Why We Like It
The sweet spot of high APYs, low minimum deposit requirements and term variety shines with EverBank Basic CD. It also offers a 20-day advanced maturity alert and a 10-day grace period, giving you plenty of time to figure out what to do with your funds.
What We Don’t Like
If you’re looking to open a long-term CD, keep in mind that EverBank only offers terms ranging up to five years. Some other banks offer CDs with terms of up to 10 years.
Who It’s Best For
EverBank is ideal for anyone looking to open multiple CDs with staggering term lengths.
Pros & Cons
- Competitive APYs across terms
- Wide range of terms
- Highly rated mobile app
- 20-day advance maturity alert
- Early withdrawal penalties can be steep
Expert's Take
EverBank doesn’t offer no-penalty CDs or IRA CDs, but it does offer a CD solution for people who need more than the standard $250,000 in FDIC insurance coverage. Its certificate of deposit account registry service (CDARS) has the potential to offer up to $50 million in coverage by utilizing the IntraFi Network. Minimums and available terms vary.
—Stephen Kates, CFP
EverBank CD Rates
| TERM | APY |
|---|---|
| 3 Months | 3.95% |
| 6 Months | 4.00% |
| 9 Months | 4.70% |
| 1 Year | 4.50% |
| 1.5 Years | 3.85% |
| 2 Years | 3.75% |
| 2.5 Years | 3.60% |
| 3 Years | 3.50% |
| 4 Years | 3.50% |
| 5 Years | 3.50% |
Interest is compounded daily and credited monthly. Early withdrawal penalties vary by term length.
Best for 2-Year CDs
Marcus by Goldman Sachs High-Yield Certificates of Deposit
Annual Percentage Yield
3.90% to 4.80%
Minimum Deposit Requirement
$500
Terms
6 Months to 6 Years
Learn More
On Bankrate.com's Website
3.90% to 4.80%
$500
6 Months to 6 Years
Editor's Take
We chose Marcus by Goldman Sachs High-Yield Certificates of Deposit as the best two-year CD for its low minimum deposit requirement and high yield of 4.00% APY. Marcus also allows for the penalty-free withdrawal of interest earned on your CD each month.
Why We Like It
This online bank also lets you easily manage your account and track your CD earnings from its well-rated mobile app—it has 4.9 out of 5 stars on the App Store and 4.4 out of 5 stars on Google Play.
What We Don’t Like
You’ve got a 10-day grace period after the maturity date to withdraw funds, but Marcus CDs automatically renew if you don’t take action, so you’ll want to make sure to keep track of your maturity date.
Who It’s Best For
Check out Marcus’s high-yield CDs if you’re looking for competitive APYs—particularly on a two-year term—and prefer mobile banking.
Pros & Cons
- Competitive APYs on all terms
- Rate guarantee
- Low minimum deposit requirement
- Interest compounded daily
- No terms beyond six years
- No branch banking
Expert's Take
Marcus is a well-known name, so some folks might feel more comfortable banking here. The digital bank seems to be leveraging technology and markets the ease of opening an account in minutes. The minimum deposit requirement on Marcus CDs makes it one of the most accessible with the highest rates. Since Marcus offers a large suite of banking products outside of CDs, this may appeal to people looking for a cohesive financial management solution.
—Gloria Garcia, CFP
The low minimum deposit requirement at Marcus can be an advantage. Its no-penalty CDs may be helpful for individuals who want to earn higher interest rates than regular savings accounts offer without committing their funds. However, Marcus CDs have an automatic renewal feature, so unless the holder acts within the grace period, Marcus can automatically renew the CD for the same duration.
—Wenyao Hu, CFA and Ph.D. Candidate
Marcus by Goldman Sachs CD Rates
| TERM | APY |
|---|---|
| 6 Months | 4.75% |
| 9 Months | 4.80% |
| 12 Months | 4.70% |
| 14 Months | N/A |
| 18 Months | 4.25% |
| 2 Years | 4.00% |
| 3 Years | 4.15% |
| 4 Years | 4.00% |
| 5 Years | 4.00% |
| 6 Years | 3.90% |
Compounding schedule
Interest is compounded daily and credited monthly.
Withdrawing interest
Marcus allows you to withdraw interest earnings before maturity without penalty. You can either transfer the interest to a Marcus by Goldman Sachs High-Yield Online Savings Account or an external bank account. Just keep in mind that withdrawing interest lowers the overall amount you can earn on your investment.
Maturity options
There’s a 10-day grace period after the maturity date to withdraw funds, renew the CD or close the CD and open a new one. The CD automatically renews if you take no action.
Rate guarantee
Marcus also offers a 10-day CD rate guarantee. If the rate on the CD term you select goes up within the first 10 days after funding your account, you’ll automatically get the higher rate. You must deposit at least $500 within the first 10 days to qualify for Marcus’s 10-day rate guarantee.
Best for Promotional CDs
Consumers Credit Union Certificate Account
Annual Percentage Yield
0.50% to 5.00%
Minimum Deposit Requirement
$250
Terms
91 Days to 5 Years
Learn More
On Consumers Credit Union's Website
0.50% to 5.00%
$250
91 Days to 5 Years
Editor's Take
We picked Consumers Credit Union Certificate Account for its promotional CD offers—5.00% APY on a 13-month regular certificate, 5.10% APY on a 13-month jumbo certificate and 5.20% APY on a 13-month super jumbo certificate. Also available is 4.30% APY on a 17-month regular certificate, 4.40% APY on a 17-month jumbo certificate and 4.50% APY on a 17-month super jumbo certificate.
Why We Like It
In addition to offering two competitive promotional certificates, Consumers Credit Union has 10 certificate term options. The credit union’s minimum deposit requirement is also one of the lowest on our list.
What We Don’t Like
This institution’s nonpromotional certificate rates are less competitive, so if the credit union’s promotional terms don’t work for you, it’s best to look elsewhere.
Who It’s Best For
Consider opening a certificate here if you’re looking to lock in a solid rate and the promotional terms work for your timeline.
Pros & Cons
- Competitive promotional rates
- Wide range of term lengths
- Low minimum deposit requirement
- Interest compounds daily
- Not the highest rates around
- Membership is required
Expert's Take
CCU’s standard certificate interest rates are substantially lower than all the others. The minimum deposit requirement is lower than others though, which makes it more accessible. Earning interest compounded daily does make a slight difference—more frequent compounding can put a little more money in your pocket.
—Gloria Garcia, CFP
Consumers Credit Union CD Rates
| TERM | APY |
|---|---|
| 91 Day | 0.50% |
| 6 Months | 0.65% |
| 1 Year | 1.00% |
| 13 Months | 5.00% |
| 17 Months | 4.30% |
| 18 Months | 0.90% |
| 2 Years | 1.20% |
| 30 Months | 1.00% |
| 3 Years | 1.30% |
| 4 Years | 1.35% |
| 5 Years | 1.50% |
Compounding schedule
The yields earned on credit union accounts are referred to as dividends rather than interest. Dividends compound daily and are credited to your account monthly.
Early withdrawal penalty
For terms of one year or less, the early withdrawal penalty is 60 days’ dividends. For terms of more than one year, the early withdrawal penalty is 120 days’ dividends.
Maturity options
There’s a grace period of 10 days after your certificate matures to withdraw funds from your account. Otherwise, your certificate automatically renews.
Branch access and customer service
Consumers is primarily an online credit union, although it does offer some branch locations throughout Illinois. If you’re not near a branch, you can take care of all of your banking needs via Consumers’ website and mobile app. It also has a 24/7 live chat feature and customer service is available by phone six days a week.
Summary of Best CD Rates of September 2024
Complete Guide To CD Rates
- Highest CD Rates Today
- Current Promotional CD Rates
- Best Bank CD Rates
- CD Rates by State
- Are CD Rates Going Up in 2024?
- Pros and Cons of CDs
- How Much Does a $10,000 CD Earn In a Year?
- How To Choose a CD
- Is Now a Good Time To Buy a CD?
- How To Maximize Your CD Rate of Return
- Alternatives to Certificates of Deposit
- Are CDs Worth It?
- Methodology
- Frequently Asked Questions (FAQs)
Highest CD Rates Today
The highest CD rates today reach 5.39% APY, but the key is to find the best CD rate that matches a term that fits your financial needs. Also keep in mind that banks change yields all the time, depending on market conditions. As the Federal Reserve brings down borrowing rates, for instance, expect CD yields to fall.
CD Rates Today
| TERM | HIGHEST APY | AVERAGE APY |
|---|---|---|
| 3 Months | 5.39% | 1.34% |
| 6 Months | 5.26% | 1.88% |
| 1-Year CD (12 M) | 5.37% | 1.97% |
| 2-Year CD (24 M) | 4.88% | 1.70% |
| 3-Year CD (36 M) | 4.65% | 1.61% |
| 5-Year CD (60 M) | 4.49% | 1.61% |
| Jumbo CD | 5.26% | 1.91% |
Source: Curinos. Rates are based on a $25,000 minimum deposit. Data accurate as of September 13, 2024.
Current Promotional CD Rates
Banks and credit unions occasionally offer promotional CD rates to garner interest, and they tend to come with term lengths outside of the bank’s offerings. The good news is that these CDs deliver a higher APY than you can typically find from the bank that’s promoting, though that doesn’t mean it’s the best option available on the market.
| FINANCIAL INSTITUTION | SPECIAL CD TERM | APY | MINIMUM DEPOSIT |
|---|---|---|---|
| Wells Fargo | 4 Months | 4.50% | $5,000 |
| 4-Months Relationship Rate | 4.76% | $5,000 | |
| 7 Months | 4.25% | $5,000 | |
| 7-Month Relationship Rate | 4.01% | $5,000 | |
| 11 Months | 3.75% to 4.01% | $5,000 | |
| 11-Month Relationship Rate | 3.75% | $5,000 | |
| U.S. Bank | 7 Months | 4.50% | $1,000 |
| 11 Months | up to 4.00% | $1,000 | |
| 15 Months | 3.75% | $1,000 | |
| Navy Federal Credit Union | 12 Months | 4.80% | $50 |
| 18 Months | 4.50% | $50 | |
| 24 Months | 4.20% | $50 | |
| 12-Month Special EasyStart | 4.75% | $50 |
Rates are accurate as of August 26, 2024
Best Bank CD Rates
As you can see from our winners, online banks tend to offer higher CD rates than traditional brick-and-mortar institutions, thanks in part to savings from not operating branches and the need to make a splash in the market to attract new customers. After all, Chase can trace its roots to Alexander Hamilton and Aaron Burr.
That means you’ll need to be comfortable using a bank you may not be that familiar with if you want to find the best yield available.
If you’d rather go with a more established option, consider the following:
CD Rates by State
Consider looking at CD term options from banks and credit unions in your state. Sometimes, you’ll find higher yields than you might receive from the nation’s biggest banks.
Are CD Rates Going Up in 2024?
CD rates galloped upward in 2022 and 2023 as the Federal Reserve raised interest rates in order to stymie sky-high inflation.
Rates have plateaued more recently, though, once it became clear that the Fed wasn’t going to hike borrowing costs any higher. Now that the Fed has shifted its focus to the labor market, it’s expected that rates will fall over the next year.
That being said, some banks will continue to offer high rates in order to attract new business.
Pro Tip
If you think you might need to withdraw money from your CD before the term ends, look into no-penalty CDs. These CDs allow you to withdraw your balance at any time without paying early withdrawal fees.
Pros and Cons of CDs
| PROS | CONS |
|---|---|
| Guaranteed returns. CDs typically come with fixed rates, making it easy to know exactly how much interest you’ll earn over the CD term. | Miss rate hikes. When you lock in your CD term, you could miss out on future higher rates. |
| Competitive rates. Banks typically offer higher rates on CDs than on normal savings products to reward customers for agreeing to leave their deposits alone for a set period of time. | Inflation. If prices rise during your CD term, the inflation-adjusted value of your yields will be lower. |
| CD laddering. You can build a CD ladder by opening multiple CD accounts with varying rates and maturity dates. A CD ladder is a technique that keeps more of your money liquid while it still earns interest. | Withdrawal penalties. Most CDs require you to keep your money in the account until the end of the CD term. Withdrawing your funds before then could mean that you’ll pay an early withdrawal fee, eating up the interest earned by the account. |
| No monthly fees. CD accounts typically don’t charge a monthly maintenance fee. | Can’t add money. You can usually only make one initial deposit with a CD and can’t add money again until your CD matures. |
Acknowledge the trade-offs between risk and reward. CDs offer guaranteed returns and the security of FDIC insurance, making them attractive for those prioritizing stability. However, they come with limitations like early withdrawal penalties, which can impact flexibility. Investors valuing stability may find comfort in CDs, while those with higher risk tolerances might seek more dynamic investment options.
– Michael Hershfield, Founder and CEO of Accrue Savings
How Much Does a $10,000 CD Earn In a Year?
How much you earn on a CD depends on a few factors, including the APY and the term length. The longer the term, and the higher the APY, the more interest you’ll receive. You can play around with the different permutations with our CD calculator.
Here’s a guide to how much you can earn with $10,000 in savings with a 4% yield from various CD terms.
| OPENING DEPOSIT | APY | TERM | INTEREST EARNED |
|---|---|---|---|
| $10,000 | 4% | 6 months | $198 |
| $10,000 | 4% | 1 year | $400 |
| $10,000 | 4% | 18 months | $606 |
| $10,000 | 4% | 2 years | $816 |
| $10,000 | 4% | 3 years | $1,249 |
| $10,000 | 4% | 5 years | $2,167 |
How To Choose a CD
Banks and credit unions offer CDs in a wide range of terms and types. While APY may be the main factor in play when shopping for a CD, there are other factors to consider as well. Here’s what to keep in mind when investing in a CD:
- APY. The best CDs offer annual percentage yields that keep your money safely growing while meeting your savings goals.
- Compounding schedule. The faster your interest compounds, the more money you earn. Look for a CD that compounds daily, rather than monthly or quarterly.
- Minimum deposit. Requirements for minimum deposits vary by bank and credit union. Decide what you can realistically deposit before opening an account.
- Term. Your time horizon is a significant factor in the CD account you choose. CDs are time deposit accounts. Align the CD’s term with when you’ll need access to your money. If you’re interested in using a CD laddering strategy, look for a bank or credit union that carries terms that can help you reach that goal.
- Early withdrawal penalty. You’ll generally have to pay an early withdrawal penalty if you need access to the money in your CD before its maturity date. These penalties vary by institution and term, but they can often be costly—eating up interest earned and occasionally some of your principal investment.
- Broker fees. Unlike traditional CDs, brokered CDs can be traded on a secondary market, so you can cash out your CD at any time by selling it. However, doing so may incur a broker fee—often a flat-rate fee of around $1 per transaction.
- Customer experience. Should a question or problem arise, the institution’s customer service department should be reachable, helpful and responsive.
- Digital banking. Because online institutions tend to offer the best CD rates, it’s important to find banks and credit unions that provide innovative online and mobile banking services.
- Safety. Look for the Federal Deposit Insurance Corporation (FDIC) to insure your account at a bank. In the event of a bank failure, it protects up to $250,000 per depositor, per bank, for each account ownership category. At federal credit unions, and the majority of state-chartered credit unions, the National Credit Union Administration (NCUA) insures your account for the same amount.
Perhaps most importantly, understand your goals. CDs generally work best for short-term financial goals, like saving up for a down payment on a car. The CD you choose should closely match the financial goal you’re trying to meet.
For example, if you plan on purchasing a vehicle in a year, consider investing in a one-year CD with a high yield. This allows you to access your money when you need it, and it’s also an excellent way to keep you from dipping into your savings prematurely.
Traditional CDs aren’t your only option. There are a number of different types of CDs available, all of which are beneficial in different ways. If you need more liquidity out of a CD, for example, you may benefit from a no-penalty CD.
Is Now a Good Time To Buy a CD?
If you’re eyeing today’s CD rates, it’s a prime moment to seize the opportunity. Locking in a CD now ensures you’ll continue reaping the benefits of these elevated APYs, even as rates decline. Whether you’re saving for a near-term goal or safeguarding a hefty sum, a CD offers a low-risk, high-reward avenue to grow your savings.
– Michael Hershfield, Founder and CEO of Accrue Savings
The point of a CD is to help you save a certain amount of money for a certain amount of time. It’s usually best deployed when you have a specific goal in mind, such as a down payment on a car.
By employing a CD, you’re making it less likely that you’ll spend money you need to save.
That being said, you want to open a CD when interest rates are high so that you can earn as much yield as possible.
If you believe interest rates will rise in the near future, you want to lean on short-term CDs so that you can capture those rising rates. If you believe yields will fall, then try to lock in a long-term CD.
One way to hedge against either outcome is to enlist a CD ladder, which involves dividing your savings among multiple CD terms with staggering maturities (perhaps from 6 months to 5 years).
This method allows you to capture high CD yields, while also retaining some flexibility should the market change.
How To Maximize Your CD Rate of Return
Getting the most out of your CD, then, requires planning (so you know what terms make sense for you), as well as discernment (picking the highest yielding terms irrespective of the banks or credit unions offering them).
That’s why you should:
- Shop around. Comparing options at different banks is a simple way to find the highest CD rates. Online banks tend to offer the best CD rates, but it’s still worth considering traditional banks and credit unions.
- Choose the right term. Leaving money in your CDs until they mature is another smart way to maximize returns. Remember, withdrawing money early can result in the loss of some or all of the interest earned if you’re paying an early withdrawal penalty.
- Build a CD ladder. Laddering allows you to keep pace with changing CD rates. When a rung in your CD ladder matures, you can deposit it into a new CD with a higher rate to earn even more interest.
Alternatives to Certificates of Deposit
Other than looking for the highest CD rates, what should I consider when choosing a CD?
Jen Mayer
Accredited Financial Counselor (AFC®) and founder of Fully Funded
Tim Nargassans
Financial services executive and data/AI expert
Megan McCoy
Accredited Financial Counselor (AFC®) and assistant professor at Kansas State University’s Department of Personal Financial Planning
Look at banks as long-term partners
While seeking out the best rate can be a driving goal for someone purchasing a CD, individuals may want to consider building a long-term relationship with a bank that aligns with their values. For instance, if someone is building a CD ladder and planning to spend years with an institution, choosing a bank or credit union where [they can establish] a relationship with a banker could be beneficial.
Jen Mayer
Accredited Financial Counselor (AFC®) and founder of Fully Funded
Invest conservatively and avoid auto-renewals
In my opinion, if you don’t have a lot of liquidity, it’s best to go conservative on your term length by determining your comfort level and then selecting one term shorter. In addition to ensuring you don’t lock up your cash for too long, you’ll want to factor in ease of working with the institution. Another key component is asking if the CD [automatically] rolls over to another term [at maturity], which I don’t recommend. Failure to withdraw your funds before your CD renews risks locking up your money longer than you may want.
Tim Nargassans
Financial services executive and data/AI expert
Consider alternatives before opening a CD
The lack of liquidity inherent in CDs can be a deterrent for investors needing access to their funds in the short term. Furthermore, the potential opportunity cost of forgoing higher returns available in more volatile investments should be considered. Many times, high-yield savings accounts, treasury bills or money market accounts may even reach higher rates than CDs, so it’s important to do some research before locking into a CD
Megan McCoy
Accredited Financial Counselor (AFC®) and assistant professor at Kansas State University’s Department of Personal Financial Planning
Savings Accounts vs. CDs
| ACCOUNT FEATURES | SAVINGS ACCOUNTS | CDs |
|---|---|---|
| Common term lengths | None | 3 months – 5 years (up to 10 years) |
| FDIC-insured? | Yes | Yes |
| Fees for early withdrawal? | No | Yes |
You can typically earn a higher yield with a CD than with a savings account, especially those offered by traditional banks. However, the best high-yield savings accounts usually offer a yield that’s close to what you can find with a CD without the onerous penalties for accessing your cash before your term has expired.
Online banks are a great place to find competitive rates on savings accounts, often with no monthly fees and low minimum balance requirements. Savings accounts carry withdrawal limits, but still offer more flexibility than a standard CD account.
Money Market Accounts vs. CDs
| ACCOUNT FEATURES | MONEY MARKET ACCOUNT | CD |
|---|---|---|
| Common term lengths | None | 3 months – 5 years (up to 10 years) |
| FDIC-insured? | Yes | Yes |
| Fees for early withdrawal? | No | Yes |
Money market accounts are hybrid bank accounts that offer the benefits of savings and checking accounts. An MMA offers much more flexibility than a CD. It’s also a better option if you want to earn a high APY while keeping your money accessible.
You should consider a CD if you want help saving a certain amount of money for a certain amount of time (so you aren’t tempted to spend it).
Rewards Checking Accounts vs. CDs
| ACCOUNT FEATURES | REWARDS CHECKING ACCOUNTS | CD |
|---|---|---|
| Common term lengths | None | 3 months – 5 years (up to 10 years) |
| FDIC-insured? | Yes | Yes |
| Fees for early withdrawal? | No | Yes |
Rewards checking accounts are normal checking accounts that give users either cash back on debit transactions or yield on balances. While these accounts have become rarer over time, there are still good options to choose from.
The benefit of such accounts is that those families that need access to a decent amount of cash can earn interest for their troubles.
But the point of a checking account is that you’ll need access to the cash to pay off bills. Therefore you should consider a CD if you are saving for something specific.
Are CDs Worth It?
You may not want to go through the hassle of researching, and signing up, for another account just so that you can earn a little bit extra yield on your cash.
Still, CDs are very much worth your time, even if they’re underused by the public.
Just 6.5% of households have a CD, according to the Federal Reserve, down from nearly one-in-five in 1989.
Part of the issue is that rates have been trending downward for much of the past 30 years, and so savers were conditioned to look elsewhere.
But rates are as high now as they’ve been in more than a decade, and you should consider locking in a CD term that matches your savings needs before rates fall once again.
Methodology
To create this list, Forbes Advisor analyzed 142 CD and share certificate accounts across 84 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. For the star rating, we ranked each account on 11 data points within the categories of APY, minimums, compound interest schedule, customer experience, digital experience, available terms and overall availability. We also analyzed and ranked each account by individual term.
The following is the weighting assigned to each category:
- APY: 50%
- Minimum deposit requirement: 12.5%
- Customer experience: 10%
- Digital experience: 10%
- Compound interest schedule: 7.5%
- Availability: 5%
- Available terms: 5%
CD accounts with higher APYs rose to the top of the list. Minimum deposit requirements of $10,000 or higher affected scores negatively. Accounts with daily compounding interest schedules were scored higher than those with monthly or quarterly schedules. To appear on this list, the account must be nationally available.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.
Banks We Monitor
These financial institutions were included in our research for the best CD rates: ableBanking, Affinity Federal Credit Union, Ally Bank, American Express, Axos Bank, Apple Federal Credit Union, Bank of America, Bank5 Connect, BankDirect, BankPurely, BankUnitedDirect, Barclays, Bethpage Federal Credit Union, BrioDirect Banking, Capital One, Charles Schwab Bank, Chase, Chevron Federal Credit Union, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comenity Direct, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Credit Union of Denver, Discover, Dollar Savings Direct, EmigrantDirect, Financial Partners Credit Union, Financial Resources Federal Credit Union, First National Bank of America, Georgia's Own Credit Union, Golden1 Credit Union, Greenwood Credit Union, HSBC Direct, Hughes Federal Credit Union, Ideal Credit Union, iGoBanking, Investors eAccess, Keybank, Kinecta Federal Credit Union, Limelight, Live Oak Bank, MAC Federal Credit Union, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My eBanc, MySavingsDirect, Navy Federal Credit Union, nbkc Bank, Northern Bank Direct, Northpointe Bank, Nuvision Federal Credit Union, Pacific National Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Quontic, Quorum Federal Credit Union, Radius Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Spectrum Federal Credit Union, State Bank of Texas, State Department Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, TIAA Bank, TotalDirect Bank, U.S. Bank, USAA, USAlliance Federal Credit Union, Vio Bank, Virtual Bank, Wells Fargo and Truist.
Frequently Asked Questions (FAQs)
Are CDs safe?
Yes, CDs are safe. Not only will you have up to $250,000 in deposits insured, but you are guaranteed the yield that the bank offers you when you sign up. Unlike stocks or bonds, then, you’ll receive a guaranteed return, which can come in handy for financial planning, especially in the short term.
Which banks have the best CD rates?
Online banks typically offer the best CD rates, although you can also find competitive rates at credit unions and other financial institutions. The best rates also depend on the length of the CD term. Long-term CDs usually earn higher rates than short-term CDs.
What is a good CD rate?
A good CD rate is one that is highly competitive, but that quality largely depends on market conditions. For instance, a rate that’s low today might be considered high a year from now, or that same rate could be considered low in 12 months if the Federal Reserve raises rates between now and then. Generally, however, a good CD rate is one that’s at least twice as high as the average rate for that term, according to the FDIC.
What is a high-yield certificate of deposit?
A high-yield certificate of deposit (CD) is a CD account that earns an above-average interest rate. The national average rate on one-year CDs is 1.88% as of September 2024, but some of the best one-year CDs offer rates above 4.00%. Some banks may also offer higher promotional interest rates on specific CD terms.
How much do CDs pay?
Payouts on CDs depend on several factors including your initial deposit, the interest rate, CD term length and compounding frequency. The amount you should put into a CD depends on the minimum deposit required to open it and how comfortable you are leaving the funds alone until the CD matures. It may be a good idea to keep some of your savings separate in a high-yield savings account or money market account. In case of emergencies, you can tap into those accounts without having to break into your CD early and potentially pay a penalty.
How long can you leave money in a CD?
CDs pay a fixed interest rate on an investment for a fixed term. Once your CD matures, you can choose to reinvest the principal and interest into a new CD. If your bank offers a rollover or renewal feature, your CDs may roll over automatically if you do nothing. Whether you choose to purchase a new CD or roll over your CD investment, current interest rates will apply.
Are CDs taxable?
Any amount of CD interest over $10 is taxable and must be reported to the IRS. The IRS treats CD earnings as income even if you reinvest that money in another CD. At the end of each tax year, the financial institution that issued the CD will send you a 1099-INT statement showing how much interest you earned. Report this amount on your taxes. Even if you don’t receive a form, you are required by the IRS to report interest earned on CDs and other deposit accounts on your federal tax return. Interest is taxable in the year it is received.
How are CD rates determined?
Banks and credit unions often use an index rate, typically the federal funds rate (also known as the “fed rate”), as a base to set rates for all interest-bearing accounts, including CD rates. When the federal funds rate rises, banks and credit unions will generally increase the interest rates on CDs. When the fed funds rate falls, banks will then lower their CD rates. Banks and credit unions also set rates differently for short- and long-term CDs depending on future interest rate projections.