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Banks and credit unions offering the best CDs pay a high APY or dividend rate relative to the national average. They also maintain reasonable minimum deposit requirements and favorable compounding schedules. Excellent customer and digital experiences are standard at these institutions as well. Below, we look at the best banks and credit unions for certificates of deposit, and the best CD and certificate rates by term.
We’ve compared 142 CD and certificate accounts at 84 nationally available banks and credit unions to find some of the best accounts available. See below to learn more about why we picked each account, the pros and cons, and to access individual bank reviews.
On this list, you’ll first find the best banks and credit unions for CD rates overall. Then you’ll also see the best banks and credit unions for specific CD term lengths.
Annual percentage yields (APYs) and account details are accurate as of July 13, 2022.
If you’re shopping for a particular CD term, check out the best CD rates by term below. Although APY is the primary factor in our ratings, these banks and credit unions also rank well in other categories, such as minimum requirements, interest compounding frequency, customer experience and digital banking options.
Certificates of deposit are time deposit accounts. They pay a fixed rate of interest on the money you invest for a fixed period of time. Unlike a savings account, CDs generally don’t allow you to withdraw the principal at any time during the term. If you withdraw money before the maturity date, you’ll often have to pay an early withdrawal penalty.
CDs lock up your money for a set period. In exchange, the bank or credit union pays an interest rate that’s generally higher than that found on a savings account. Banks and credit unions offer CDs and certificates in a variety of terms.
Typically, the longer the term, the higher the interest rate. However, the Covid-driven uncertainty in the U.S. economy has caused some banks to price CDs differently recently, such as paying the same rate for all terms, or paying a higher APY for a shorter term.
CDs may be worthwhile for those who want low risk and guaranteed returns. They can also benefit those interested in keeping their savings locked up from temptation.
Before you settle on a CD, make sure you shop around and compare CD rates to ensure you’re getting the highest rate of return possible.
Another important consideration with certificates and CDs is the likelihood of having to pay an early withdrawal penalty if you withdraw your funds before the stated maturity date.
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 choosing a CD:
Perhaps most importantly, consider 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.
Longer-term CDs tend to pay higher yields. They also require you to lock up your money for an extended period, unless you’re willing to incur an early withdrawal penalty. One way to get the best of both worlds is to use a CD ladder strategy. Savers ladder their investment by spreading their money across different CDs with varying terms. A portion of the money goes toward short-term CDs, while another portion of the funds is allocated to longer-term CDs.
As one of the shorter-term CDs matures, the money might be reinvested in a new five-year CD. Eventually, you’d have a five-year CD maturing each year. This would enable you to have some access to your money and, at the same time, keep it in a higher-yielding savings vehicle.
CDs may not provide a double-digit return right now, but you can get a higher rate if you are willing to shop around. Thanks to the increased competition in the marketplace, consumers have many options from traditional banks and their online brethren.
Banks and credit unions of all kinds want your business and will pay for it with attractive returns, making comparison shopping a must when purchasing a CD or share certificate.
| Certificate | Forbes Advisor Rating | Annual Percentage Yield | Minimum Deposit Requirement | Terms | Learn More | ||||
|---|---|---|---|---|---|---|---|---|---|
| Connexus Credit Union Share Certificate |  | 4.8 |  | 1.76% to 2.96% | $5,000 | 12 Months to 5 Years | View More | ||
| First National Bank of America Certificate of Deposit |  | 4.7 |  | 1.90% to 3.10% | $1,000 | 12 Months to 7 Years | View More | ||
| Quontic Bank Certificate of Deposit |  | 4.6 | | 1.26% to 2.86% | $500 | 6 Months to 5 Years | Learn More | On Quontic Bank's Website | |
| PenFed Credit Union Money Market Certificate |  | 4.5 | | 0.75% to 3.50% | $1,000 | 6 Months to 7 Years | View More | ||
| CommunityWide Federal Credit Union CW Certificate Account |  | 4.5 | | 1.30% to 2.30% | $1,000 | 6 Months to 5 Years | View More | ||
| Bethpage Federal Credit Union Certificate Account |  | 4.3 | | 1.00% to 2.65% | $50 | 3 Months to 5 Years | View More | ||
| Bread Savings Certificate of Deposit |  | 4.2 |  | 2.50% to 3.35% | $1,500 | 12 Months to 5 Years | View More | ||
| TIAA Bank Basic CD |  | 4.1 | | 0.90% to 2.85% | $1,000 | 3 Months to 5 Years | View More | ||
| Consumers Credit Union Certificate Account |  | 4.0 | | 0.35% to 1.25% | $250 | 91 Days to 5 Years | Learn More | On Consumers Credit Union's Website | |
| Marcus by Goldman Sachs High-Yield Certificate of Deposit |  | 4.0 |  | 1.05% to 2.90% | $500 | 6 Months to 6 Years | View More |
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:
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.
You can find and buy CDs at banks, credit unions and some online brokers. At credit unions, CDs are called share certificates. The requirements to buy a CD or certificate vary by institution. To purchase a CD, you’ll generally need to choose the type of CD you want, the term length, open an account with a bank or credit union and fund the account. Keep in mind that you’ll need to share personal information like your name, address and Social Security number to open a CD.
What’s considered a good CD rate varies significantly by term. For example, the national average interest rate for a 12-month CD as of April 18, 2022, is 0.17% APY, according to the FDIC, while the national average for a three-month CD is 0.06% APY. However, the online banks and credit unions listed above pay well above those rates.
The pros of CDs include a guaranteed, fixed rate of return, higher APYs than those of many savings accounts and a wide selection of terms and types of CDs. CDs can be especially useful for meeting your short-term savings goals and are typically considered safe investments.
The cons of CD include higher minimum deposit requirements, early withdrawal penalties and the lack of liquidity, since your money is committed for a fixed period of time. In the current economy, CD APYs also may be lower than those offered by some online savings accounts.
Regular or traditional CDs are the most common type of certificate of deposit. Banks and credit unions may also offer bump-up CDs, step-up CDs, no-penalty CDs or add-on CDs, to name a few variations.
