💬 Our geek says:
“When comparing CD rates, aim for the highest APY for the length of the CD term you need.Currently, the best rates tend to be for short-term CDs, such as one year or less; You can potentially get a higher APY by using a long-term CD at a lower rate.” You can earn more than a short-term CD.
“Alternatively, if you want the flexibility to redeem your CD early for free, there are several banks that offer penalty-free CDs.”
News for 2024 on the highest prices for CDs.
The best CD rates above 5% APY have dried up at prominent online banks and credit unions, and promotional CD rates are also below that threshold. The best CD rate on this page is 4.99% APY for a 9-month certificate from NASA Federal Credit Union.
According to NerdWallet’s analysis, competitive CD rates began to decline gradually in early 2024, and the decline further accelerated in late September. Banks and credit unions have raised CD rates over the past two years, following the Federal Reserve’s benchmark interest rate directive, with nearly a dozen increases to date. However, at its September meeting, the Federal Reserve cut interest rates for the first time since March 2020, which lowered high-yield CD rates. New CD prices could be even lower this year than they have been so far.
The right time to buy a CD ultimately depends on your savings goals, but if you’re in the market to buy a CD, consider locking in a high CD rate for the life of the CD . Learn more about where rates are heading with our CD rate forecast.
Want to see the best CDs for each term?
Check out our carefully selected listings based on competitive rates and terms.
Best Prices for CDs for 1 Year Best Prices for CDs for 3 Years Best Prices for CDs for 5 Years Best Prices for CDs for 3 Months Best Prices for CDs for 6 Months Best Prices for CDs with No Penalties
Show more prices
On NerdWallet’s secure site
CD Definition: What is a CD?
A certificate of deposit is a bank account that requires you to keep your funds for a fixed period of time, either months or years, in exchange for a fixed interest rate that is higher than other bank accounts. These accounts are often referred to as CDs.
Historically, CDs took the form of paper certificates, but today CDs are like other financial accounts that can be managed online. Learn more about what a CD is.
How to choose a CD
Consider each part of the CD to help you make a decision.
CD Type: High-yield CDs function similarly to standard CDs, but have the highest rates and are often sold by online banks. Some CDs have unusual features, such as no-penalty CDs, which have no fees for early withdrawals, and bump-up CDs, which have fees that increase over the term. See CD types.
CD rates: Once you’ve narrowed down your CD term and type, you can compare banks and credit unions to find competitive rates. Depending on whether you value convenience or not, you can decide to choose the bank you already have an account with or choose a new one, but ideally aim for a high interest rate. See current CD rates.
CD Deposit: The amount you put into a CD will depend on your savings goals, but the minimum starting requirements for a CD are not a good guide. And if you’re worried about your bank failing, keep less than the FDIC insurance limit of $250,000 in your account to protect your money. Find out how to choose a CD deposit.
CD Penalty: Early withdrawal penalties only apply if you redeem your CD before the end of the term. Depending on the length of the CD term, the penalty is typically anywhere from a few months to sometimes a year’s worth of interest. Ideally, penalties should only be considered if the funds are likely to be needed early. Learn more about CD early withdrawal penalties.
To help you decide on a CD, read the instructions below.
Select multiple CDs
If the pressure of choosing one CD is too much, you may want to consider a strategy that balances access to cash with high yields. By opening multiple CDs with different terms on CD Ladder, you can redeem your CDs over time while taking advantage of competitive short-term and long-term CD rates.
When considering CDs?
Think of CDs as part of the cash and cash equivalents category of your overall portfolio, which is an overall collection of investments across different types of assets. For many people, CDs work best in the following situations:
Consolidate your savings in preparation for major purchases within the next five years, such as a down payment on a car or a house.
Hide your sudden good fortune so you don’t use it right away.
Especially near or during retirement, you can earn some profits without taking on market risk.
How much money does a $10,000 CD make in a year?
A $10,000 CD with 5% APY will earn you $500 in one year. But if you’re looking at a six-month CD at that rate and deposit, your return will be slightly less than half that.
The three main factors that affect CD returns are the rate, CD term, and CD deposit. Unlike regular savings accounts, you typically can’t add money to a CD after your initial deposit. Let’s take a look at some scenarios of how much $10,000 per CD will make you in a year compared to 6 months. (Or use a CD calculator.)
Interest earned in 1 year
Interest earned in 6 months (rounded)
🤓 Otaku Tips
A lower rate may outweigh a higher rate. A 1-year CD with a 4.50% APY will earn you more interest than a 6-month CD with a 5.00% APY. If you deposit $10,000, you’ll earn $246.95 on a 6-month CD or $450 on a low-rate 1-year CD. When comparing CD rates, use our CD calculator to see how much you can earn with different term lengths.
Other CDs: Promotional CDs and No-Penalty CDs
Traditionally, 1-, 3-, and 5-year CDs tend to be the most common options considered, but other CDs exist that offer higher yields or flexibility in some cases.
A promotional CD is a CD with a non-traditional duration. Also, less commonly, it refers to CDs that have an expiration date set in the price they are offered. These CD rates may be higher than traditional terms CDs, but may automatically update to a lower rate CD by default.
A penalty-free CD is a CD that allows you to withdraw the full amount of the CD at any time within the first few days of opening it for free. However, no-penalty CDs are generally less common and have lower rates compared to similarly-termed high-yield CDs.
Current promotional CD prices
The following promotional CD prices stand out based on NerdWallet’s data analysis for late September 2024. Promotional expiry dates will be displayed when available.
Generally, promotional rates tend to have irregular CD terms and are referred to as “promotional rates” or “CD specials” on bank websites. (For more information, see How Promotional CD Pricing Works.)
Best No Penalty CD Rates
A no-penalty CD is a type of CD where there is no penalty for withdrawing money before the end of the term. They’re attractive if you want the traditionally higher yield of a CD compared to a regular savings account, but also want the flexibility if you need your money sooner than expected.
Currently, high-yield savings accounts have comparable interest rates (and the flexibility to withdraw at will) to CDs, but the main benefit of penalty-free CDs over either of these accounts is that, especially As interest rates decline, the interest rate remains fixed.
These four banks offer high penalty-free CD rates.
Other CDs: IRA and Jumbo CDs
Some types of CDs have more restrictions, such as retirement-only funds or higher minimum deposits, and are not standard CDs from banks or credit unions, which are available nationwide. However, it may work for certain savers.
IRA CDs are primarily used by risk-averse savers and people near or near retirement to save a portion of their retirement savings. In addition to the tax benefits of an individual retirement account, you also get the fixed interest rate of a CD. See the best IRA CD rates.
Jumbo CDs are CDs with higher minimum deposit requirements, traditionally $100,000. It’s not available everywhere, and you can’t find the best rate. See the best prices for jumbo CDs.
Note: Although not a special type of CD, credit union CDs (or stock certificates) may not be available nationwide. Credit unions can limit membership requirements to residents of certain states or organizations (such as the military). See the best CD rates from credit unions.
CD alternatives
If you’re looking for a savings and investment vehicle that’s as secure as a CD, but with more flexibility and other features, consider the following:
Like regular savings accounts, money market accounts allow you to add and withdraw money over time, but MMAs tend to have higher minimum deposit requirements to open an account. , or tend to avoid monthly fees. Compare CDs and money market accounts.
A bond is a loan to a company or government that pays a fixed interest rate to investors. Let’s compare CDs and bonds.
