The Best CD Rates For May 2023

Compare the best CD rates today from 423 local banks, online banks, and credit unions across the United States.

As of May 1, 2023, the best interest rate is 5.50% APY with Northern Bank Direct. The minimum deposit is $500.00.

The Best CD Rates At Banks and Credit Unions

Find and compare certificates of deposit rates by the highest APY, including 3-month, 6-month, 1-year, 2-year, and 5-years.

Disclaimer: Interest rates change daily, and we’re doing our best to keep you updated. Please double-check with your bank or credit union!

Highest Guaranteed Interest Rates

Fixed annuities work almost identically to CDs but offer more benefits to you. Compare current cd rates with today’s highest fixed annuity rates.

Disclaimer: This is a review. These banks and credit unions are not affiliated with The Annuity Expert. On the other hand, fixed annuities may be purchased at most financial institutions in their local branches. Our objective is to assist you in obtaining the best possible interest rates for your retirement funds.

The Best 3-Month CD Rates

The following banks and credit unions have the highest CD rates for three months.

The Best 6-Month CD Rates

The following banks and credit unions have the highest CD rates for six months.

The Best 1-Year CD Rates

The following banks and credit unions have the highest CD rates for 12 months.

The Best 2-Year CD Rates

The following banks and credit unions have the highest CD rates for 24 months.

The Best 3-Year CD Rates

The following banks and credit unions have the highest CD rates for 36 months.

The Best 4-Year CD Rates

The following banks and credit unions have the highest CD rates for 48 months.

The Best 5-Year CD Rates

The following banks and credit unions have the highest CD rates for 60 months.

The Best 10-Year CD Rates

These credit unions and banks have the highest payouts on 10-year CDs.

What Are CD Rates?

CD rates are the annual yields of Certificates of Deposit (CDs). CDs are fixed-term deposits held with a bank or financial institution that generally offer higher returns than money market accounts and other savings options. Typically, the longer the term selected, the higher the interest rate will be; however, there may be an early withdrawal penalty if you withdraw funds before your CD matures.

Our free CD calculator can give you a reasonable estimate in just a few minutes. Enter the amount of money you deposit, the time you want to keep the CD, and the current interest rate. The compounding interest calculator will then show you how much interest you can earn over the CD’s life.

Which Deposit Accounts Offers The Best Bank Rates?

• Savings accounts offer higher rates than checking accounts.
• Money markets offer higher rates than a high-yield savings account.
• CD accounts offer a higher rate than money market accounts.
• A fixed annuity offers higher rates than certificate rates and all other savings accounts.

What Is A Certificate Of Deposit (CD)?

What is a CD in banking? A certificate of deposit (CD) is a deposit account you can get at banks and credit unions and earn a fixed interest rate. You invest the CD funds for a fixed number of months and can’t take the money out until the maturity date is completed; otherwise, a CD early withdrawal penalty will be applied.

The longer the period or amount of time you commit to keeping your money locked up, the higher the certificate rate. When selecting the best rate for your objectives, consider other elements such as a minimum deposit to open and early withdrawal penalties that might reduce your profits.

Typical CD terms range from three, six, nine, twelve, twenty-four, thirty-six, forty-eight, and sixty months.

A minimum deposit requirement is standard when buying a CD. The amount of your initial deposit also dictates the certificate of deposit interest rates.

To get competitive rates, ensure your CD account’s term is extended. Longer-term CDs mean higher rates. Sometimes rates are increased by how large the initial deposit is too.

There is a penalty for taking your money out of a CD account before it matures. However, early withdrawal penalties often offset any interest earned and some of the principal investment.

Certificates are a guaranteed way to keep money safe. The deposit money is federally insured for up to $250,000 at banks by the Federal Deposit Insurance Corporation (FDIC) and a federal credit union by the National Credit Union Administration (NCUA). In addition, certificates don’t decrease in value when bad things happen with markets.

How Does A Certificate Of Deposit (CD) Work?

A CD in banking is a lot like a federal credit union or a bank’s high-yield savings account. You put money in it, and then you earn interest every month. After that, the interest compounds, growing your principal at a fixed rate (annual percentage yields) until the term length has been completed. When the term is completed, the account will automatically renew if it’s not liquidated or transferred to a new certificate.

For example, if I put $500 in a CD for five years at a rate of 1.20% annual percentage yield (APY), my ending balance at the end of 60 months would be $530.73.

CD holders can get a higher rate (an annual percentage yield or “APY”) because the bank and credit union knows how long you will use your money. Calculate yields with our APY Calculator.

The credit union or bank will charge you if you withdraw your money. Traditional and online CD accounts are designed to hold money for a fixed period. They have a term, and when it ends, you can take out the money without being charged.

You get the money back that you put in, plus any interest. The bank and credit union will usually contact you before your CD accounts mature to tell you when they will mature.

Once the certificate matures, you can decide whether to withdraw your money, renew the current CD term, or transfer it to another. You will have a limited time for this decision, called a grace period.

What Is The Purpose Of Certificates Of Deposit?

A certificate of deposit, or CD, is a savings account that offers a fixed interest rate for a set period. Banks and credit unions issue CDs and typically have terms ranging from six months to five years. When a CD matures, the customer can cash out the account or roll it over into a new CD account with a different term. One of the main reasons people choose to invest in CDs is safety.

Unlike stocks or mutual funds, CDs are not subject to market fluctuations, meaning there is little loss risk. In addition, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, making them one of the safest investment options available.

CDs also tend to offer higher interest rates than traditional savings accounts, which can help customers grow their money more quickly. For these reasons, CDs are often an appealing option for people looking for a safe and sound way to invest their money.

When Is A Good Time To Buy A CD?

It is essential to have financial stability before getting a CD. That’s because you might have to pay a lot if you take out your money before the CD account matures.

A fixed-rate CD account is a good product for people who don’t like surprises and want to know their rate of return in advance. Because they are low-risk investments, CDs usually have a reputation for being more risk-averse savers. But people of different ages can benefit from investing cash into a CD.

CDs can be a good investment if you want to protect your money. This means that you don’t want the value of your money to go down, but you also want a better return than what you would get from a savings account.

CDs are a step above savings accounts regarding the amount of risk involved. They offer a higher return than a savings account but are less risky than bonds.

Certificates (CDs) can be an excellent way to save money for short-term savings goals, like saving up for a down payment on a new house or car. However, if you don’t want to spend the money you save prematurely, tying it up in a CD for one or two years could be an excellent way to ensure that doesn’t happen.

But using CD deposits to build wealth over time won’t work in your favor. This is because, historically, inflation has risen over time, reducing the purchasing power of money and earning a yield below the inflation rate.

For this reason, retirees shouldn’t put all their money on CDs.

CD Rates Forecast: Deposit rates went down after the Fed lowered its rates in 2020. But in 2022, all that changed. CD account rates have increased their rate significantly and regularly. These changes caused bank rates to increase across the board, and the Fed is expected to increase rates through 2023, which may increase CD rates even further at certain banks.

How To Decide Which Term To Select?

There are different types of CDs with different terms. Of course, the longer the term, the higher your yield. But it is essential to consider more than just the yield when choosing a CD term. You must consider your financial needs and what is happening in the current interest rate environment.

Consider how soon you’ll need the cashback. Consider whether you’ll require the funds for purchase within a year, and opt for shorter durations such as 3, 6, 9, or 12 months. Keep in mind that fixed-rate CDs come with hefty early withdrawal penalties.

Consider the state of the interest rate when selecting a CD term. Investing in shorter terms might help you take advantage of current rates and reinvest in an improving rate environment later.

Types Of CDs

Several banks provide an extensive range of CDs to meet various financial needs. Take some time to evaluate the different types of CDs available to you.

Traditional CDs

This type of CD has a guaranteed rate for the length of the CD. You cannot add any more money to this CD after opening it. You may have to pay the penalty if you withdraw your money before the CD matures.

No-Penalty CDs

No-penalty CDs allow you to withdraw your money without paying the penalty. However, the bank may require a waiting period before withdrawing the money, usually around six or seven days. Typically, you can’t add money to no-penalty CDs. No-penalty CD rates are usually lower than regular CD rates but can be higher than some high-yield savings or money market accounts.

Jumbo CDs

These high-yield CDs require a minimum deposit of $100,000 or more. They aren’t as common as they used to be, but some banks still offer them. Usually, you can find the same or even higher APYs in other CD products. But some jumbo certificates yield higher for people who deposit more money.

Brokered CDs

CDs sold through brokerage firms are called “brokered CDs” To buy one of these certificates, you need to have a brokerage account with a financial institution. Brokered CDs sometimes offer higher interest rates than traditional certificates from your local bank, but they also carry more risk. This is because they can be traded like bonds; if you decide to sell before the maturity date, you could take a loss. Therefore, it’s essential to make sure these banks are FDIC-insured.

Callable CDs

Callable CDs are riskier than traditional CDs but offer higher interest rates. This is because the bank that issued the CD can “call” your CD before it fully matures. This means the bank can take back these specialty CDs early, and you might not earn all the interest you expected. You would still get your entire principal and all the interest earned; however, you would need to reinvest your money at a lower rate.

Bump-up CDs

With a bump-up CD, you can request a rate increase for the remainder of the term. The disadvantage is that bump-up CDs often pay lower initial rates than traditional CDs.

Step-up CDs

Step-up CDs are like bump-up CDs, but the bank automatically increases the rate at certain times. So you don’t have to do anything. The disadvantage is that you usually start with a lower rate. So you might not make more money than if you had put your money in a traditional CD with a higher rate.

Add-on CDs

Add-on CDs let you make multiple deposits during the term. The number of deposits you can make varies depending on the institution.

Zero-coupon CDs

Zero-coupon CDs are when you buy a CD for less than it is worth. Then, when the CD term is done, you get the total value of the CD. They’re like zero-coupon bonds, but they are usually for people who want to invest for an extended period.

IRA CDs

An IRA CD is a CD that you can put money into for your retirement. This type of CD offers guaranteed returns. A traditional IRA doesn’t charge taxes on the money you make from the CD until you take the money out. As a result, IRA CD rates are typically the same as standard CD rates.

What Is A CD Ladder?

A CD ladder is a long-term investment strategy in which you hold short-term CDs with staggered maturity dates. This enables you to benefit from continuous reinvestment opportunities and also allows you to take advantage of higher interest rates as they become available. At the same time, you are guaranteed not to lose any capital that was initially invested since each CD matures and rolls into another CD. Using a CD ladder, you can maximize your return on investment while minimizing risk, making it the ideal solution for anyone looking for an innovative and steady way to grow their savings over time.

Jumbo CDs Vs. Regular CDs

Regarding certificates (CDs), there are two main types: jumbo CDs and regular CDs.

• Jumbo CDs typically have a higher minimum deposit than regular CDs but offer higher interest rates. For example, a jumbo CD with a $100,000 minimum deposit might offer an annual percentage yield (APY) of 2.25%. On the other hand, a regular CD with a $1,000 minimum deposit might only offer an APY of 1%. As such, jumbo certificates can be a good choice for investors looking to maximize their returns.
• However, it’s important to remember that jumbo CDs typically have longer terms than regular CDs, so your money will be tied up for longer.
• Additionally, early withdrawal penalties on jumbo CDs are often more severe than on regular CDs. Therefore, it’s essential to consider all the factors before deciding which type of CD is right for you.

Does It Make Sense To Buy CDs When Interest Rates Are So Low?

Many people wonder whether buying CDs makes sense in today’s low-interest-rate environment. After all, with low rates, you won’t earn much interest. However, there are still a few good reasons to consider buying CDs.

• First, they can be a great way to park your money if you’re worried about market volatility. Second, CDs are FDIC-insured, so you know your money is safe, and they offer a fixed rate of return, which can be helpful in uncertain times.
• Secondly, CDs can be an excellent way to ladder your investments. By spreading your money across CDs with different maturity dates, you can ensure that you always have some money due, so you can reinvest at higher rates when rates eventually start to rise.

For these reasons, buying CDs can still make sense for some investors, even in a low-interest-rate environment.

What Causes CD Rates To Rise?

CD interest rates are influenced by various factors, including the yields on Treasurys, competition among banks, deposits’ desire to be secured, and the ability to lend money at a higher rate. As a result, if Treasury yields rise, some banks will probably increase their CD rates.

CD rates generally rise when the Federal Reserve raises the federal funds rate. The federal funds rate is the interest rate at which banks lend money to each other overnight, and it serves as a benchmark for other short-term interest rates like CD rates. So when the federal funds rate goes up, deposit rates follow suit. However, many other factors can also influence CD rates, so keeping an eye on the overall economic environment and how market conditions may affect your particular financial institution is essential.

CDs And Taxes

Yes, you must pay taxes on the interest earned from a CD that contains non-qualified money. This is because you have already paid income taxes on that money. However, if the money is in a traditional IRA certificate, you will not have to pay income taxes until you withdraw the money. That’s because traditional IRAs are tax-deferred accounts.

In some cases, you can deduct your CD contributions from your taxes. For example, if you can contribute to a traditional IRA certificate, you may get a full or partial deduction. Your income, marital status, and whether a retirement plan at work covers you are some things that will determine if you can get an IRA deduction.

The Internal Revenue Service says that interest earned from CDs is an example of taxable interest. If you earn more than $10 in interest, you will get a form called 1099-INT or 1099-OID. You must report all taxable and tax-exempt interest on your federal income tax return, even if you don’t receive a 1099 form. Interest may also be called dividends.

If you had never taxed the funds from a 401(k) when transferring them to a traditional IRA CD, those funds would be counted as income if you withdraw them.

Pros And Cons Of CDs

Pros

Certificates of Deposit can be a great investment option for those looking for a low-risk way to grow their money. Here are some of the pros:

• Guaranteed Returns: CDs typically offer higher interest rates than traditional savings accounts, and they are also FDIC insured, which means that your investment is protected up to $250,000.
• Fixed Rate of Return: CDs offer a fixed rate of return, which means you can predict precisely how much money you will earn from your investment.
• Flexible Terms: CDs come in various terms, ranging from a few months to several years, so you can choose the term that best fits your financial goals.

Cons

While CDs offer some benefits, they also come with a few cons that you should be aware of:

• Early Withdrawal Penalties: If you need to withdraw your money from a CD before its term is up, you will typically face an early withdrawal penalty, which can eat into your earnings.
• Limited Access to Your Money: Unlike other investments, CDs do not allow you to access your money at any time. You will typically face penalties if you need to withdraw your funds before the term ends.
• Low Returns: While CDs offer guaranteed returns, their interest rates are typically lower than other investment options, such as stocks or mutual funds.

Certificates Vs. Savings

Certificates of deposit are bank accounts with a guaranteed interest rate for a fixed term. You must keep your money invested in the CD until the end of that term; otherwise, you may need to pay the penalty if you withdraw it early.

Traditional savings accounts are a type of bank account that usually earns little interest. At the same time, certificates offer higher interest but require a minimum opening deposit, and account owners must maintain a minimum balance.

Use our compound interest calculator to compare the compounding growth.

CD Or Money Market

A market account is a type of bank account (closer to checking accounts) that pays a higher rate than a savings account.

Money markets prevail if you’re looking for the best option for money available to withdraw. The difference between standard savings and market accounts is that the latter have checks and debit cards.

A money market certificate is a great place to save liquid assets at a bank or credit union while earning interest. Then, put away enough for the long term, like retirement or college savings, and still have access to your total balance with no early withdrawal penalties.

Most money market rates are variable, not fixed, meaning the rate can change.

CD Or IRA

CD Vs. IRA: Which one is the better investment for you? When comparing a CD to an IRA, the answer depends on various factors, including age, investment goals, and risk tolerance. For example, an IRA allows you to grow your money tax-deferred if you’re younger and just starting to save for retirement. This means you won’t have to pay taxes on your gains until you withdraw the money in retirement. This can be a significant advantage if you expect to be in a higher tax bracket when you retire.

On the other hand, if you’re closer to retirement and looking for a place to park your money where it will earn a guaranteed rate of return, a CD may be the better choice. This is because CDs typically offer higher bank interest rates than savings accounts and are backed by the full faith and credit of the U.S. government, making them a safe investment.

What Is A Variable-Rate Certificate Of Deposit?

A variable-rate certificate of deposit (CD) is an investment account that offers a higher interest rate than a traditional CD. The interest rate on a variable rate CD can change over time, depending on the market conditions. Unlike a traditional CD, which has a fixed interest rate for the duration of the account, a variable-rate CD typically has an introductory interest rate lower than the current market rates. After the introductory period, the interest rate will increase or decrease depending on the market’s direction.

Can certificates of deposit lose value? A variable-rate CD can be a good choice for investors willing to take on more risk. However, it is essential to remember that the interest rate can go down and up, so there is potential for losses and gains.

How Many Certificates Can I Have At One Time?

There’s no limit to the number of CDs you can own, but there are a few things to remember if you consider opening more than one.

• First, each CD will have its interest rate and term length, so you must decide which account offers the best return for your needs.
• Additionally, some banks may charge fees for having multiple CDs, so it’s always a good idea to check with your financial institution before opening multiple accounts.
• Finally, remember that you’ll be locked into the interest rate and term length of each CD, so make sure you won’t need access to that money before the account matures.

Owning multiple CDs can be a great option if you’re looking for a safe, low-risk way to grow your savings. Just be sure to do your research before opening multiple accounts.

Should You Have CDs At Multiple Banks?

There is no question that CDs are a safe investment option, but the best way to maximize their benefits is by spreading your assets across multiple banks.

• Spreading funds allows you to leverage different interest rates to earn more. It also gives you more control over your assets since you can access each account independently.
• Furthermore, having CDs at different banks can help protect your financial security, making your funds less vulnerable if one bank should experience a problem such as fraud or significant financial instability.

Overall, there are many good reasons to have CDs at multiple banks, making this a practical and prudent choice for anyone looking to build up their savings.

How Much Money Can You Put In A Certificate?

There is no simple answer to how much money you can put into a cd. The amount will depend on several factors, including the type of CD you choose, the terms of your deposit, and the bank or financial institution where you open the account. For example, some CDs are designed to hold more significant amounts of money than others, and some banks offer higher interest rates or better terms for certain types of deposits. Ultimately, it is up to you to decide how much money you want to keep in savings and how much risk you are willing to take on with an investment product.

What Is The Difference Between A Bank CD And A Credit Union CD?

At their core, bank CDs and credit union CD accounts are investment vehicles designed to help you grow your savings over time. In addition, they both offer fixed interest rates, guaranteeing that you will earn a certain amount of interest on your CD balance throughout its lifespan. However, critical differences between these CD accounts are essential when making investment decisions.

Credit union CD accounts typically offer higher rates of return than bank CD accounts, as they are not subject to commercial banks’ exact fees and regulations. Credit unions also typically offer more flexible terms and conditions, including the ability to withdraw funds early in certain circumstances. Choosing between a bank CD or a credit union CD will depend on your specific investment goals and priorities. But with careful research and consideration, you can find the proper account to help you meet your financial goals.

What Is A CD Interest Calculator?

CD interest rate calculator is a tool that helps investors to determine how much interest they will receive from a certificate of deposit (CD). This calculator considers various factors, such as the initial investment amount, additional contributions over time, and the length of the CD. In addition, it also considers factors like compounding rates and current market rates.

To use the CD calculator, you will need to input the following information: the principal amount, the interest rate, and the term of the CD. The calculator will then use this information to determine the total interest that will be earned over the term of the CD. In addition, the calculator will also provide a breakdown of how much interest will be earned each year.

Are Certificates Good Protection For A Bear Market?

One way to protect your investments during a bear market is to invest in certificates of deposit (CDs). CDs are low-risk investments that offer a fixed rate of return over a set period. Unlike stocks and other securities, the value of a CD is not affected by market conditions. As a result, CDs can provide a measure of stability during periods of market turmoil. In addition, CDs typically have higher interest rates than savings accounts, making them an attractive option for investors looking to preserve their capital. While CDs may not offer the same potential for growth as other investments, they can be a valuable tool for protecting your portfolio during a bear market.

What Do Beneficiaries Inherit From A Certificate Of Deposit?

When the account holder dies, the beneficiaries typically inherit the CD. Beneficiaries typically inherit the principal amount of the CD, as well as any accrued interest. In some cases, the bank may require that the beneficiaries keep the CD for the remainder of its term. In other cases, the beneficiaries may be able to access the funds immediately. Either way, inheriting a CD can be a valuable windfall for beneficiaries.

Helpful Tip: Shop life insurance quotes to provide an affordable tax-free death benefit that will not break your bank account.

How To Open A CD Account

A CD account is a great way to save money and earn extra interest. Here’s how to open one:

1. First, find a bank or credit union that offers CDs. Then, shop around and compare rates to find the best deal.
2. Once you’ve found the right bank or credit union, the next step is to open an account. This can usually be done online, over the phone, or in person.
3. You’ll need to make an initial deposit when you open the account. The amount required will vary depending on the financial institution, but it’s typically between $500 and $1,000.
4. Once your account is open, you must decide how long you want to keep your money locked up. CD terms typically range from three months to five years. Of course, the longer the term, the higher the interest rate.
5. Finally, read the account details to understand the penalties for withdrawing your money early. For example, you’ll forfeit some of the interest with most CDs if you cash out before the term expires.

Following these steps, you can open a CD account and save for your future today.

How To Cash Out A CD

How long does it take to cash out a CD? First, wait for your bank, credit union, or other financial institution to send you a letter about the CD’s maturity. This generally occurs two to three weeks before the CD’s maturity date. The letter will inform you of when your CD will mature and how much the accrued interest will be.

At maturity, you’ll have a few options for what to do with your money. You can choose any or all of these:

• Withdraw the money and close the account
• Keep the money in the account and let it continue to grow
• Withdraw some of the money and leave the rest to continue growing

If you don’t take action, your CD will automatically renew itself. You’ll keep the same interest rate and terms for another term. The terms on most CDs are fixed, so you’ll know exactly how much to expect at maturity.

If you do not wish to renew your CD, take action before the maturity date. Your bank or credit union will likely only mail renewal paperwork a week or two before maturity. They may charge an early withdrawal fee if you withdraw your money early.

It’s important to remember the following points when deciding what to do with your CD:

• Don’t take out all of your money at maturity. Leaving some in the account and letting it grow is a great way to earn interest consistently. Consider setting up an automatic transfer to reinvest the money in another CD.
• Having your money on hand is not necessarily better. For example, if you withdraw your money before maturity and leave it sitting in a regular savings account, you may lose out on more interest than if you had kept that amount invested in a CD through its entire term.

Our Methodology

Every week, we compare rates from over 400 financial institutions. We only want to compare CD rates from reliable and reputable institutions. Therefore, we take the time to research financial institutions to ensure that they meet our criteria. First, we look for financial institutions with a strong track record of customer satisfaction and a good reputation in the industry.

Once we have a list of financial institutions, we identify the criteria for comparison. This helps us standardize our comparison and ensure that we compare apples to apples. Some of the criteria we consider include the interest rate, the duration of the CD, and any associated fees or penalties.

To compare CD rates effectively, we gather data from each financial institution. We do this by visiting their websites and collecting the necessary information. We use a spreadsheet to organize the data, making it easier to compare and analyze.

What makes us different from other online resources?

Most online CD rate websites only promote financial institutions that pay them a commission, leaving those who do not invisible to you. We start with you in mind, so focus on the interest rate that will help you grow your savings the fastest.

Next Steps

The average fixed rates on certificates are low but slowly inching their way up. To get the best return on your investment, comparing CD rates from various financial institutions is essential. You may also want to consider investing in a fixed annuity, which can offer you returns as high as 4%. If you have money saved in an IRA or 401(k), you may also use that money to purchase a fixed annuity. Again, requesting a quote is the best way to determine how much you could earn with this investment.

Frequently Asked Questions

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