13 Best CD Rates for December 2023 (Up to 5.67%)
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
ALSO CONSIDER: Best online savings || Best checking || Best high-interest accounts
The best CD rates provide a stable way to grow fixed sums of savings faster than other certificates of deposit or savings accounts.
Why trust NerdWallet: Our writers and editors follow strict editorial guidelines to ensure fairness and accuracy in our coverage to help you choose the financial accounts that work best for you. See our criteria for evaluating banks and credit unions.
APY research methodology: The APYs shown are current as of the publication date of this page. Each weekday, we review rates to make sure we have the most up-to-date APYs.
Online banks and credit unions tend to have the best yields on certificates of deposit. You can find rates far higher than the national averages of 1.85% for one-year terms and 1.39% for five-year terms. The Federal Reserve has raised its rate multiple times since March 2022, leading banks to raise their rates too. For more on rate changes, see our analysis of current CD rates.
If you don’t need immediate access to some of your money, high-yield CDs can be a way to build your savings. They have some of the highest interest rates available for federally insured bank accounts, and the rate is guaranteed for the duration of the CD term.
Here’s a look at some of the highest CD rates on the market.
APYs shown are current as of Dec. 8, 2023. All other information is current as of Dec. 1, 2023.
ALSO CONSIDER: Best online savings || Best checking || Best high-interest accounts
The best CD rates provide a stable way to grow fixed sums of savings faster than other certificates of deposit or savings accounts.
Why trust NerdWallet: Our writers and editors follow strict editorial guidelines to ensure fairness and accuracy in our coverage to help you choose the financial accounts that work best for you. See our criteria for evaluating banks and credit unions.
APY research methodology: The APYs shown are current as of the publication date of this page. Each weekday, we review rates to make sure we have the most up-to-date APYs.
Online banks and credit unions tend to have the best yields on certificates of deposit. You can find rates far higher than the national averages of 1.85% for one-year terms and 1.39% for five-year terms. The Federal Reserve has raised its rate multiple times since March 2022, leading banks to raise their rates too. For more on rate changes, see our analysis of current CD rates.
If you don’t need immediate access to some of your money, high-yield CDs can be a way to build your savings. They have some of the highest interest rates available for federally insured bank accounts, and the rate is guaranteed for the duration of the CD term.
Here’s a look at some of the highest CD rates on the market.
APYs shown are current as of Dec. 8, 2023. All other information is current as of Dec. 1, 2023.
The Federal Reserve raised rates to the highest levels in more than two decades, which is good news for your bank accounts. Take advantage of today’s high rates by opening a federally insured certificate of deposit.
Best CD Rates for December 2023 (Up to 5.67%)
| Bank/institution | NerdWallet rating | Minimum deposit | APY | Learn more |
|---|---|---|---|---|
 Barclays Online CD Learn more at Barclays, Member FDIC | Best for CD Rates | $0 Member FDIC | 1-year APY 5.50% 3-year APY 4.50% 5-year APY 4.50% | Learn more at Barclays, Member FDIC |
 LendingClub CD Learn more at LendingClub Bank, Member FDIC | Best for CD Rates | $2,500 Member FDIC | 1-year APY 5.55% 3-year APY 4.30% 5-year APY 4.00% | Learn more at LendingClub Bank, Member FDIC |
 Alliant Credit Union Certificate Learn more at Alliant Credit Union, Federally insured by NCUA | Best for CD Rates | $1,000 Federally insured by NCUA | 1-year APY 5.25% 3-year APY 4.45% 5-year APY 4.35% | Learn more at Alliant Credit Union, Federally insured by NCUA |
 BMO Alto Certificate of Deposit | Best for CD Rates | $0 Deposits are FDIC Insured | 1-year APY 5.65% 3-year APY 4.90% 5-year APY 4.90% | Read review |
 Popular Direct CD | Best for CD Rates | $10,000 Member FDIC | 1-year APY 5.67% 3-year APY 5.00% 5-year APY 4.70% | Read review |
 Bread Savings™️ CD | Best for CD Rates | $1,500 Member FDIC | 1-year APY 5.50% 3-year APY 4.50% 5-year APY 4.25% | Read review |
 Quontic Bank CD | Best for CD Rates | $500 Member FDIC | 1-year APY 5.30% 3-year APY 4.40% 5-year APY 4.30% | Read review |
 TAB Bank CD | Best for CD Rates | $1,000 Member FDIC | 1-year APY 5.27% 3-year APY 4.25% 5-year APY 4.00% | Read review |
 Marcus by Goldman Sachs High-Yield CD Learn more at Marcus by Goldman Sachs, Member FDIC | Best for CD Rates | $500 Member FDIC | 1-year APY 5.30% 3-year APY 4.40% 5-year APY 4.10% | Learn more at Marcus by Goldman Sachs, Member FDIC |
 PenFed Credit Union Money Market Certificate | Best for CD Rates | $1,000 Federally insured by NCUA | 1-year APY 5.25% 3-year APY 4.30% 5-year APY 4.00% | Read review |
 Ally Bank High Yield CD | Best for CD Rates | $0 Member FDIC | 1-year APY 5.25% 3-year APY 4.25% 5-year APY 4.10% | Read review |
 Synchrony Bank CD | Best for CD Rates | $0 Member FDIC | 1-year APY 5.30% 3-year APY 4.30% 5-year APY 4.00% | Read review |
 Sallie Mae Bank CD | Best for CD Rates | $2,500 Member FDIC | 1-year APY 5.50% 3-year APY 4.00% 5-year APY 4.00% | Read review |
Our pick for
CD Rates
Why We Like It
Overview: Barclays is an online-only U.S. branch of the London-based financial company by the same name. Its CD rates have the rare perk of no opening minimum. Terms include one-year to five-year CDs.
Fees: No monthly or opening fees. The early withdrawal penalties are three months of interest for two-year CDs and shorter, and six months of interest for CDs with terms longer than two years.
Other products: Barclays also has a high-yield savings account with no minimum deposit and a bare-bones mobile app. The bank lacks checking, an ATM network and advanced budgeting tools.
List of Barclays CD rates:
1-year CD: 5.50% APY
3-year CD: 4.50% APY
5-year CD: 4.50% APY
See more rates on our Barclays review
Why We Like It
Overview: LendingClub Bank is an online-only financial institition. Its CDs have solid rates for terms from six months to five years. The $2,500 minimum opening balance is somewhat high compared to other banks' requirements.
Fees: No monthly or opening fees. LendingClub Bank’s early withdrawal penalties include 90 days of interest for CDs of one year or shorter and 180 days of interest for CDs longer than a year.
Other products: LendingClub Bank also offers a high-yield savings account, rewards checking account and various loans.
LendingClub Bank CD rates:
1-year CD: 5.55% APY
3-year CD: 4.30% APY
5-year CD: 4.00% APY
See more rates on our LendingClub Bank review
Why We Like It
Overview: Founded in 1935 in Illinois, the online-focused Alliant Credit Union is one of the largest credit unions nationwide and offers solid certificate rates. To become a member, one option is to agree to support Alliant's nonprofit partner Foster Care to Success; Alliant will make a $5 donation on your behalf. Alliant’s certificates have a low minimum deposit of $1,000, and terms stretch from three months to five years.
Fees: No monthly or opening costs. Early withdrawal penalties are more friendly than some banks’; the penalty for certificates of two-year terms or longer consists of up to six months of dividends. Some banks require more than a year of dividends for similar terms.
Other products: Alliant also offers IRA and jumbo certificates for those saving for retirement as well as high-yield checking and savings account.
List of Alliant Credit Union certificate rates:
1-year: 5.25% APY
3-year: 4.45% APY
5-year: 4.35% APY
See more rates on our Alliant Credit Union review
Why We Like It
Overview: BMO Alto is the U.S. online-only division of BMO, all under the Canada-based parent bank BMO Financial Group. BMO Alto's online CDs have high rates and no minimum opening deposit requirement. CD terms range from six months to five years. Note that all the money you have across divisions of BMO Financial Group (including BMO and Bank of the West) counts toward the same FDIC insurance limit for one institution.
Fees: No monthly or opening fees. BMO Alto’s early withdrawal penalties include three months of interest for CD terms of 11 months or shorter and six months of interest for CD terms of one year or longer.
Other products: BMO Alto also offers a high-yield savings account.
BMO Alto CD rates:
1-year CD: 5.65% APY
3-year CD: 4.90% APY
5-year CD: 4.90% APY
See more rates on our BMO Alto review
Why We Like It
Overview: Bread Savings (formerly Comenity Direct) is an online-only banking division of Bread Financial (formerly Comenity Bank). Its suite of online CDs have rates worth considering for terms from one to five years. The $1,500 minimum balance is somewhat high.
Fees: No monthly or opening fees. Bread Savings charges a penalty for early withdrawals that’s somewhat steeper than some online banks: about six months of interest for CD terms from one to three years and one year of interest for four- and five-year CDs.
Other products: Bread Savings also features a high-yield savings account.
Bread Savings™️ CD rates:
1-year CD: 5.50% APY
3-year CD: 4.50% APY
5-year CD: 4.25% APY
See more rates on our Bread Savings review
Why We Like It
Overview: With roots as a community development financial institution in New York City, Quontic Bank expanded to become a digital bank with a stellar lineup of high-yield CDs. The minimum opening requirement of $500 is on the lower end. Terms go from six months to five years.
Fees: There are no monthly or opening fees, but early withdrawal fees are steep, especially for shorter-term CDs. For one-year CDs, the penalty is one year of interest; and for two-year CDs and longer, the penalty is two years of interest. The penalty can include part of your initial balance depending on the date of the early withdrawal, meaning a penalty can result in losing you money in a CD.
Other products: Quontic Bank also offers a high-yield savings account, several types of rewards checking accounts, mortgages and more.
Quontic Bank CD rates:
1-year CD: 5.30% APY
3-year CD: 4.40% APY
5-year CD: 4.30% APY
See more rates on our Quontic Bank review
Why We Like It
Overview: TAB Bank is an online bank with roots in Ogden, Utah. Founded in 1998, it started by serving the trucking industry; TAB stands for Transportation Alliance Bank. Its CDs have competitive yields and range from terms of six months to five years. The opening minimum of $1,000 is on the lower end among online banks.
Fees: No opening or monthly fees. If you withdraw before the term ends, you’ll pay a penalty of either about three months’ worth of interest on CD terms one year or shorter; or about six months’ interest on CD terms longer than a year.
Other products: TAB Bank offers a full suite of financial products including checking, high-yield savings and money market accounts.
List of all TAB Bank CD rates:
1-year CD: 5.27% APY
3-year CD: 4.25% APY
5-year CD: 4.00% APY
See more rates on our TAB Bank review
Why We Like It
Overview: Marcus is the Goldman Sachs branch launched in 2016 that handles online banking products, including an extensive lineup of CDs with terms from six months to six years. Rates include its one-year CD with 5.30% APY (annual percentage yield) as of 11/02/2023. The minimum of $500 is lower than at many banks, though some have no minimum. The bank has two specialty types of CDs: a 20-month bump-up CD and three no-penalty CD terms, which include seven months, 11 months and 13 months.
Fees: No monthly or opening fees. If you withdraw early from a standard Marcus CD, the penalty is the following: three months’ worth of interest earned for CD terms less than a year, six months of interest for CD terms of one to five years and nine month’s worth of interest for the six-year CD.
Other products: Its savings account’s rate is solid. The bank doesn't, however, offer mobile apps, ATMs, branches or checking accounts, so it’s best for letting the interest on your money grow.
List of Marcus CD rates:
1-year CD: 5.30% APY
3-year CD: 4.40% APY
5-year CD: 4.10% APY
See more rates on our Marcus review
Why We Like It
Overview: Pentagon Federal Credit Union has served people affiliated with the military since 1935 but as of 2019, anyone can apply to join. Its money market certificates, its CD equivalent, have terms from six months to seven years, with a relatively low minimum deposit of $1,000.
Fees: No monthly or opening fees. Withdrawing early mostly results in losing one year of dividends (the equivalent of interest) or 30% of total dividends that would have been earned if the certificate completed its term. This is a steep cost.
Other products: PenFed has checking and savings accounts, among other offerings.
List of PenFed money market certificate rates:
1-year: 5.25% APY
3-year: 4.30% APY
5-year: 4.00% APY
See more rates on our PenFed review
Federally insured by NCUA.
Why We Like It
Overview: Ally Bank, an online-only institution originally founded by General Motors, offers a high-quality banking experience. It has an unusually diverse set of CDs, including a no-penalty CD and bump-rate CDs. There’s no minimum deposit.
Fees: No monthly or opening costs. If you withdraw early from a regular Ally CD, the penalty varies by term: Two months of interest for two-year terms and shorter, three months of interest for 18-month and three-year CDs, four months of interest for four-year CDs and five months of interest for five-year CDs.
Other products: Ally has a wide variety of accounts and loans.
List of Ally CD rates:
1-year: 5.25% APY
3-year: 4.25% APY
5-year: 4.10% APY
See more rates on our Ally review
Why We Like It
Overview: An online bank owned by a Fortune 500 company, Synchrony Bank has a stellar line-up of CDs with terms ranging from three months to five years. In addition to regular CDs, Synchrony offers a no-penalty CD and bump-up CD, which lets you raise your rate once during the term. There is no minimum opening requirement.
Fees: Early withdrawal penalties include: three months of interest for CDs of one-year terms or shorter; six months of interest for CDs between one-year and three-year terms; and one year of interest for four-year CDs and longer. No monthly or opening costs.
Other products: Synchrony Bank offers IRA CDs for the retirement-minded as well as a money market account and high-yield savings account. It doesn’t have checking accounts.
List of Synchrony Bank CD rates:
1-year CD: 5.30% APY
3-year CD: 4.30% APY
5-year CD: 4.00% APY
See more rates on our Synchrony review
Why We Like It
Overview: The online banking arm of student loan provider Sallie Mae provides nearly a dozen CD terms from six months to five years, with a focus on short-term CDs. The $2,500 minimum is somewhat hefty.
Fees: Withdrawing early results in a penalty, either 90 days of interest for CDs of one year or shorter or 180 days of interest for CDs of longer terms. No monthly or opening fees.
Other products: Sallie Mae also has various savings accounts.
List of Sallie Mae CD rates:
1-year CD: 5.50% APY
3-year CD: 4.00% APY
5-year CD: 4.00% APY
See more rates on our Sallie Mae Bank review
Want to compare more options? Here are our other top picks:
» Curious about other savings options? Check out NerdWallet’s best high-yield online savings accounts
Current promotional CD rates
The following promotional CD rates stand out based on NerdWallet’s data analysis in December 2023. Expiration dates for a promo are shown when available.
In general, promotional rates tend to be for irregular CD terms and are featured on banking websites as a “promotional rate” or “CD special.” (For more details, see how promotional CD rates work.)
Name (click to see our review) | CD rate (or certificate rate) |
|---|---|
EverBank (formerly TIAA Bank): 9-month CD | 5.50% APY. |
Discover: 9-month CD | 5.30% APY. |
Consumers Credit Union: 10-month Certificate | 5.50% APY. |
BMO: 13-month CD | 5.25% APY. |
Ally Bank: 14-month CD | 5.25% APY (expires 3/20/24). |
NBKC Bank: 15-month CD | 5.40% APY. |
Service Credit Union: 15-month Certificate | 5.10% APY. |
PenFed Credit Union: 15-month Certificate | 5.35% APY. |
Connexus Credit Union: 17-month Certificate | 5.16% APY. |
CD definition
A certificate of deposit is a bank account that requires you to lock funds away for a fixed period of months or years in exchange for a fixed interest rate that can be higher than other bank accounts. See more about what CDs are.
Best CD rates for December 2023
Alliant Credit Union: APYs: 5.25% (1 year); 4.45% (3 years); 4.35% (5 years); Term range: 3 months - 5 years; Minimum to open: $1,000.
Bread Savings: APYs: 5.50% (1 year); 4.50% (3 years); 4.25% (5 years); Term range: 1 - 5 years; Minimum to open: $1,500.
Popular Direct: APYs: 5.67% (1 year); 5.00% (3 years); 4.70% (5 years); Term range: 3 months - 5 years; Minimum to open: $10,000.
Quontic Bank: APYs: 5.30% (1 year); 4.40% (3 years); 4.30% (5 years); Term range: 6 months - 5 years; Minimum to open: $500.
BMO Alto: APYs: 5.65% (1 year); 4.90% (3 years); 4.90% (5 years); Term range: 6 months - 5 years; Minimum to open: None.
TAB Bank: APYs: 5.27% (1 year); 4.25% (3 years); 4.00% (5 years); Term range: 6 months - 5 years; Minimum to open: $1,000.
LendingClub Bank: APYs: 5.55% (1 year); 4.30% (3 years); 4.00% (5 years); Term range: 6 months - 5 years; Minimum to open: $2,500.
Barclays: APYs: 5.50% (1 year); 4.50% (3 years); 4.50% (5 years); Term range: 1 - 5 years; Minimum to open: None.
Marcus by Goldman Sachs: APYs: 5.30% (1 year); 4.40% (3 years); 4.10% (5 years); Term range: 6 months - 6 years; Minimum to open: $500.
Pentagon Federal Credit Union: APYs: 5.25% (1 year); 4.30% (3 years); 4.00% (5 years); Term range: 6 months - 7 years; Minimum to open: $1,000.
Ally Bank: APYs: 5.25% (1 year); 4.25% (3 years); 4.10% (5 years); Term range: 3 months - 5 years; Minimum to open: None.
Synchrony Bank: APYs: 5.30% (1 year); 4.30% (3 years); 4.00% (5 years); Term range: 3 months - 5 years; Minimum to open: None.
Sallie Mae Bank: APYs: 5.50% (1 year); 4.00% (3 years); 4.00% (5 years); Term range: 6 months - 5 years; Minimum to open: $2,500.
How much does a $10,000 CD make in a year?
The three main factors that impact CD earnings are the rate, the CD term and the CD deposit, or the starting amount you put into a CD. Unlike regular savings accounts, you don’t generally have the ability to add money to a CD after the initial deposit. Here’s a look at three scenarios including how much $10,000 in a CD can earn in a year. (Or use our CD calculator.)
How to choose a CD
Consider each part of a CD to help break down your decision:
CD term: Most terms at a bank or credit union range from three months to five years. Learn how to choose your CD term.
CD type: Some CDs have an unusual feature, such as a no-penalty CD that doesn’t charge for early withdrawals or a bump-up CD that allows for a rate increase during a term. High-yield CDs work like standard CDs but have the best rates and are often at online banks. See types of CDs.
CD rate: Once you’ve narrowed down the term and type of CD, you can compare banks and credit unions to find a competitive rate. You may decide to go with a bank you already have accounts at or choose a new institution, depending on whether convenience matters to you, but aiming for a high rate is ideal. See current CD rates.
CD deposit: The amount you put into a CD depends on your savings goals, but you want to have more funds than a CD’s opening minimum requirement. And, if you’re worried about a bank failing, keep less than the FDIC insurance limit of $250,000 in your accounts to keep your money protected. Learn how to choose your CD deposit.
See CD rates by term and type
Compare the best rates for various CD terms and types:
How do CDs work?
Learn more about choosing CDs, understanding CD rates, and opening and closing CDs.
For choosing CDs:
What is a no-penalty CD?
A no-penalty CD is a type of CD that doesn’t have a penalty for withdrawing money before the term ends. It can be appealing if you want the traditionally higher yield of a CD, compared to regular savings accounts, but you might need the money sooner than you expect.
Best no-penalty CD rates
If you withdraw money from a CD before the term ends, you generally pay a penalty of at least several months' worth of interest earned. But some providers have CDs without this early withdrawal penalty, though rates are slightly lower than other CD rates. Here are some:
Ally Bank: 4.55% APY, 11 months, no minimum to open.
CIT Bank: 4.90% APY, 11 months, $1,000 minimum to open.
Marcus by Goldman Sachs: 4.60% APY, 13 months, $500 minimum to open.
Synchrony Bank: 4.50% APY, 11 months, no minimum to open.
» COMPARE: See our list of the best no-penalty CD rates
What happens if I withdraw from a CD early?
Most CDs have an early withdrawal penalty that tends to range from several months' to a year's worth of interest earned, depending on the CD term length and the bank's policy. No-penalty CDs are the only type of CD that lets you withdraw money from a CD early without a fee. Learn more about different types of CDs.
Last updated on December 8, 2023
Methodology
On a monthly basis, we compare rates at over 30 financial institutions, pulled from our full list, that we’ve seen to be consistently competitive. On a quarterly basis, we analyzed our full list, excluding banks that offered brokered CDs, since those accounts work differently from standard bank CDs. Higher rates might be available elsewhere.
We took a close look at over 90 financial institutions and financial service providers, including the largest U.S. banks based on assets, internet search traffic and other factors; the nation’s largest credit unions, based on assets and membership; and other notable and/or emerging players in the industry. We rated them on criteria including annual percentage yields, minimum balances, fees, digital experience and more.
Financial institutions and providers surveyed are: Affirm, Alaska USA Federal Credit Union, All America Bank, Alliant Credit Union, Ally Bank, Amalgamated Bank, America First Credit Union, American Express National Bank, Andrews Federal Credit Union, Associated Bank, Axos Bank, Bank of America, Bank of the West, Bank5 Connect, Bank7, Barclays, Bask Bank, Bethpage Federal Credit Union, BMO, BMO Alto, Boeing Employees Credit Union, Bread Savings, BrioDirect, Capital One, Carver Federal Savings Bank, Charles Schwab Bank, Chase, Chime, CIBC U.S., CIT Bank, Citibank, Citizens, Citizens Bank, City First Bank, Climate First Bank, Commerce Bank, Community First Credit Union of Florida, ConnectOne Bank, Connexus Credit Union, Consumers Credit Union, Current, Delta Community Credit Union, Discover Bank, E*TRADE, EverBank (formerly TIAA Bank), Fifth Third Bank, First Foundation, First National Bank, First Tech Federal Credit Union, Flagstar Bank, FNBO Direct, GO2bank, Golden 1 Credit Union, Greenwood, Hope Credit Union, Huntington Bank, Industrial Bank, Ivy Bank, KeyBank, Lake Michigan Credit Union, LendingClub Bank, Liberty Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Nationwide (by Axos), Navy Federal Credit Union, NBKC, One, OneUnited Bank, Pentagon Federal Credit Union, PNC, Popular Direct, Quontic Bank, Regions Bank, Revolut, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, Securityplus Federal Credit Union, Self-Help Credit Union, Service Credit Union, SoFi, State Employees’ Credit Union of North Carolina, Suncoast Credit Union, Synchrony Bank, TAB Bank, TD Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, Upgrade, USAA Bank, Varo, Vio Bank, Wells Fargo and Zynlo Bank.
To recap our selections...
NerdWallet's Best CD Rates for December 2023 (Up to 5.67%)
- Barclays Online CD: Best for CD Rates
- LendingClub CD: Best for CD Rates
- Alliant Credit Union Certificate: Best for CD Rates
- BMO Alto Certificate of Deposit: Best for CD Rates
- Popular Direct CD: Best for CD Rates
- Bread Savings™️ CD: Best for CD Rates
- Quontic Bank CD: Best for CD Rates
- TAB Bank CD: Best for CD Rates
- Marcus by Goldman Sachs High-Yield CD: Best for CD Rates
- PenFed Credit Union Money Market Certificate: Best for CD Rates
- Ally Bank High Yield CD: Best for CD Rates
- Synchrony Bank CD: Best for CD Rates
- Sallie Mae Bank CD: Best for CD Rates
Frequently asked questions
Definition: A CD, or certificate of deposit, is a bank account with a fixed interest rate that’s generally higher than that of a regular savings account, and a fixed date of withdrawal, known as the maturity date. Common terms range from three months to five years.
Main advantages: The ability to lock in rates when they’re high is one of the most attractive features of a CD, especially since regular savings accounts have variable rates subject to change at any time. Even outside of high-rate environments, though, CDs provide a safe, federally insured place for short-term savings.
Main downsides: You’ll generally have to pay a penalty if you withdraw your money before a CD matures; the penalty can be equal to several months’ or a year’s worth of interest.
What else to consider: If you’re thinking about CDs, compare the highest CD rates today.
Online banks such as BMO Alto and credit unions such as Alliant Credit Union tend to offer some of the most competitive rates, especially compared to national averages.
Yes. Most banks and credit unions insure your money in a CD up to $250,000 per person per account type, such as single-owned and joint accounts. See more details about how CDs are FDIC insured. Plus, your returns are guaranteed as long as you don’t withdraw early, in which case you may have to pay a penalty.
Yes. The Federal Reserve has raised its rate multiple times since March 2022, which has encouraged banks and credit unions to raise their rates as well. See more insight about current CD rates or, if you want a broader financial picture, see our explainer on historical CD rates. For a mid-2023 analysis of rates, see what factors impact bank account rates.
Certificates of deposit require more of a commitment than a regular savings account since you're locking away some savings for a future date. This feature can be helpful for some goals but not for others, such as emergency savings. Take a closer look at when CDs are worth it.
It depends on what’s more important to you: rates or access to your money. Some of the current CD rates tend to be higher than the best savings account rates, but you sacrifice access to money in CDs. If that doesn’t work for you, check out our list of best online savings accounts.
CDs can make sense as a way to lock up some savings dedicated to a short-term goal such as buying a car or house in the next few years. Outside of goals, CDs can be a safe place for money you want to get guaranteed returns on without the risk of fluctuation such as in the stock market. Take a closer look at when CDs are worth it.
Yes. Interest earned in CDs is taxable as interest income. Your bank or credit union will usually give you a Form 1099-INT that states the interest each year, unless the amount is under $10. The IRS notes that you generally include interest from CDs when you receive it, so a CD with a term longer than a year wouldn’t have its interest taxed until the term ends.
A CD ladder can be a helpful strategy if you don’t want to go all in on one CD, especially if you think rates will keep rising. It works like this: you open multiple CDs at different terms, such as one year, two years and three years, which frees up part of your funds more regularly than having, say, just a three-year CD. Each time a CD matures, you can either reinvest in a new CD or withdraw your money. Learn more about how CD ladders work.
It depends on your savings goals and how sure you are that you won't need your funds before the CD term expires. Having to pay an early withdrawal penalty, generally up to one year's worth of interest, can be a blow to your savings. Common CD terms range from six months to five years; if you want to play it safe, go for a shorter CD term or a no-penalty CD.
CD rates are quoted as an annual percentage yield, or APY, which is how much the account earns in one year including compound interest. Banks generally compound interest monthly or daily. A CD’s term plays a role too: the longer the term, the higher the rate generally.
Both show the rate of interest you can earn on a CD or savings account, but APY factors in compounding interest and the interest rate doesn’t. If you’re comparing CD rates at a glance, APY is more useful. For example, APY brings a CD with interest compounded daily and another with interest compounded monthly onto the same playing field. For CDs of the same term length, a higher APY means a higher return. Learn more about APY vs. interest rate.
Credit unions and online banks are solid places to find competitive CD rates. Credit unions are the nonprofit equivalent of banks, and can generally offer higher savings rates than traditional brick-and-mortar banks. Credit unions’ certificates of deposit are called “shared certificates” and interest “dividends,” and these function as they do at banks. See an analysis of banks vs. credit unions.
A jumbo CD is a type of CD with a traditionally high minimum deposit such as $10,000, though it can be lower. Although jumbo CD rates can be higher than regular CDs, online banks and credit unions offer some of the best rates on CDs with low or no minimums.
A brokered CD is a CD originated by a bank or credit union and offered by a brokerage firm. They function like regular CDs except that they can be traded before their terms end. Check out the pros and cons on our explainer about brokered CDs.
An IRA, or individual retirement account, is a tax-advantaged account that contains investments such as stocks, bonds and CDs. A CD is a type of savings account that locks up money for a set term, generally from three months to five years.
An IRA CD is a type of CD used to save a portion of retirement savings. You get the tax-advantaged status of an IRA and the fixed term and rate of a CD.
No. CDs are meant for savings you can set aside and leave untouched. Consider a high-yield savings account for money you need in a pinch. Learn more about emergency funds, including a calculator to determine the exact amount to aim for.
CDs don’t have monthly fees like checking or savings accounts might have, but they generally have a penalty if you withdraw before the CD term expires. This early withdrawal penalty tends to be several months’ to years' worth of interest, so it’s usually best to wait to access funds from a CD once it expires. The exception is no-penalty CDs.
A no-penalty CD is a type of CD that doesn’t have a penalty for withdrawing money before the term ends. It can be appealing if you want the traditionally higher yield of a CD, compared to regular savings accounts, but you might need the money sooner than you expect. Here’s a closer look at the best no-penalty CD rates.
It depends on what rates and type of access to funds you need. Like high-yield savings accounts, money market accounts have ongoing access to funds, while CDs don’t. Among savings accounts, CD rates are traditionally the highest, then money market accounts, then regular savings accounts. See our list of the best money market account rates.
The general rule of thumb for CDs is the longer the term, the higher the rate. However, this isn't always true. The best 10-year CD rates aren't necessarily higher than the best five-year CD rates, and locking up your money for a decade might not be in your best interest. Consider current CD rates as well as your savings goals — investing your money in mutual funds might be more worthwhile for a longer term.
» For more info, see the best short-term investments for 5 years or less
It depends on the level of risk you want to take. Investment, or brokerage, accounts can have higher returns than CDs, but CDs guarantee returns. They’re typically federally insured for up to $250,000 and offer fixed interest rates. Brokerage accounts can be riskier, since you aren’t protected against losses.
Let's say you have an emergency fund that consists of enough cash to cover about three to six months’ worth of living expenses. To grow your long-term savings, consider opening an online brokerage account. Although these financial products come with more risk than CDs, they could lead to higher returns.
Picking the right broker comes down to your priorities. Some investors are willing to pay more for a top-notch platform; others count costs above all else. With brokerage accounts, you don't have to worry about early withdrawal penalties, but your funds may be more difficult to access in a pinch, given that you’ll likely need to sell some investment shares before you can devote that money to anything else.
» For in-depth guidance, check out NerdWallet’s best online stock brokers for beginners
Both CDs and savings bonds offer stable returns over time and can be given to children as long as an adult manages the account on their behalf. Savings bonds have longer time horizons, up to 30 years, and can earn more than many CDs in a low-rate environment. Learn more about savings bonds and how to give them as gifts.
The amount varies based on your savings goals, but CDs aren’t generally best for emergency funds or long-term savings. Keep in mind the minimum opening deposit of the CD you’re considering, as well as the maximum you can have federally insured at a bank, up to $250,000, per depositor, per account ownership category. Learn more about how much money to put into CDs.