Compare the Best CD Rates of August 2026 (Up to 5.00%)

A CD is a savings account with a fixed interest rate and withdrawal date. Banks and credit unions offer certificates of deposit and typically have higher interest rates than regular savings accounts. Withdrawal before the maturity date incurs penalties. CDs are a low-risk way to save money with a guaranteed return.

According to the Federal Reserve Bank of St. Louis data, the best bank CD rates were prevalent more than 30 years ago, with an 18.65% return on three-month CDs in 1980. Today, consumers can buy CDs at rates above 5% but no longer achieve rates above 6%.

As of August 2026, interest rates are forecasted to decrease gradually over the next 12 months.

Your CD is protected up to $250,000 when held at an FDIC-insured bank or an NCUSIF-insured credit union, whether online, at a physical bank, or with a credit union, as the U.S. government backs these accounts. Ensure you stay within the insurance limits for each account ownership category.

CDs usually have penalties for early withdrawals, except for No-penalty CDs. However, even these might have penalties if funds are withdrawn within the first 6 to 7 days of opening.

A reasonable CD rate is influenced by your financial needs and how long you can lock up your money. Typically, longer terms offer better yields because banks value the certainty of holding your funds for a set duration. To ensure you’re getting a good deal, compare CD rates to national averages, noting that some banks offer rates exceeding 5 percent.

Due to their lower overhead costs, online banks often provide higher APYs than traditional brick-and-mortar banks. These savings are passed to customers at higher rates. Additionally, online banks might offer more competitive rates than local banks to attract and retain customers.

CDs typically renew automatically, but if left unclaimed, they can be transferred to the government based on state laws. To prevent your CD from being considered abandoned, maintain regular contact with your bank and ensure they have your current mailing address.

Banks let you name a beneficiary for your CD, who will get your savings if you die. Experts recommend doing this. Without a named beneficiary, your CD savings will go through a court process called probate after your death.

Your money is safe if your CD is in an FDIC-insured bank or NCUA credit union and meets their guidelines. However, withdrawing early could cost you some interest or even part of the principal.

Early withdrawal from most CDs results in a penalty, typically a few months to a year of interest. Only no-penalty CDs allow fee-free early withdrawals. Explore various CD types for more information.

A+ Federal Credit Union offers 5.00% APY for 12 months with a minimum of $10.00 up to $1,000.00.

A+ Federal Credit Union offers 5.00% APY for 12 months with a minimum of $10.00 up to $1,000.00.

5Point Credit Union offers one of the best CD interest rates today at 4.34% APY for 12 months.

Raisin offers the highest online bank CD rates.

In most cases, you cannot withdraw interest from a certificate of deposit (CD) without incurring a penalty. The penalty is typically a percentage of the interest earned or a certain number of days’ worth of interest. However, there are no-penalty CDs that earn less interest and have more liquidity.

CD terms can range from 3 months to 10 years or more. Each term offers different interest rates and potential returns. When choosing a CD term, consider your investment goals and time horizon.

Any APY above 4% is considered a reasonable CD rate. Select a longer term because rates are only expected to decrease in the future.

The minimum deposit for a CD is $1.

You can typically roll over a Certificate of Deposit (CD) that matured yesterday into another CD. Most financial institutions offer a grace period after a CD’s maturity, during which you can transfer the funds to a new CD. This grace period varies but is commonly around 7 to 10 days from maturity. It’s vital to act within this window to avoid automatic renewal or transfer of the funds to a different account type.

Bank Certificates of Deposit (CDs) are savings accounts with a fixed interest rate and term. When you deposit money in a bank for a specified period, the bank pays you interest in return. Withdrawing funds before the term ends may incur penalties. CDs are a low-risk investment option for earning interest on savings.

Finding a guaranteed 7% interest rate on traditional savings or investment products like CDs or high-yield savings accounts is highly unlikely. Multi-year guaranteed annuities, often called CD annuities, offer a fixed interest rate for a specified term and currently offer between 5% and 6%, depending on the term and the issuer.

For traditional CDs, the interest earned is taxable in the year it is credited to your account, even if you don’t withdraw it. Taxable interest means you need to report and pay taxes on this interest annually. However, the tax treatment differs for CDs held within an Individual Retirement Account (IRA). Interest earned on IRA CDs grows tax-deferred, meaning you won’t owe taxes on the interest until you begin taking distributions, typically in retirement.

Liquidity and interest rates are the main differences between a money market account and a CD. A money market account is more liquid, allowing you to access funds more easily than a CD, which locks in your money for a specified term. However, money market accounts typically offer lower interest rates than CDs. Additionally, money market accounts may require a minimum balance to maintain to qualify for the advertised interest rate, whereas CDs typically have fixed rates regardless of account balance.

CD (Certificate of Deposit) rates are generally fixed, meaning the interest rate you agree upon when opening the CD remains the same throughout its term. This fixed rate allows for predictable returns, making CDs a popular choice for those seeking stability in their investment.

Yes, you can have multiple CD accounts. Many people open multiple CDs at different banks or the same financial institution, but with varying terms and rates. This strategy, known as a CD ladder, can help manage liquidity needs and take advantage of different interest rates, optimizing returns over time while ensuring investment parts mature at different intervals.

APY stands for Annual Percentage Yield. It refers to the amount of interest you earn on a CD (Certificate of Deposit) over a year, considering the effect of compounding interest. APY provides a more accurate depiction of your earnings than the simple interest rate because it includes how often the interest is applied to the balance.

Yes, CD rates are guaranteed for the term of the certificate of deposit once you open an account and make a deposit.

The best time to invest in certificates of deposit (CDs) is typically when interest rates are high. High interest rates mean you can lock in a better return on your investment for the duration of the CD term. During periods of high rates, investing in longer-term CDs can be particularly advantageous, as you secure a higher rate for a more extended period, protecting your investment against potential drops in interest rates in the near future.

Typically, the longest term available for a certificate of deposit (CD) is 10 years. Some financial institutions may offer CDs with terms as long as 10 years, providing a fixed interest rate for the duration of the term.

Generally, bank CD rates are not negotiable. Most banks set their CD interest rates based on broader economic conditions and the Federal Reserve’s rates, which are typically fixed and standardized for all customers.

IRA and regular CDs differ in how they’re funded and taxed. An IRA CD is a type of retirement account that offers tax benefits. Regular CDs are funded from regular savings and don’t have tax advantages. IRA CD earnings grow tax-free or tax-deferred, while regular CD earnings are taxed yearly.

A callable CD is a type of certificate of deposit that gives the issuing bank the right to terminate the CD before its maturity date. Typically, the bank will offer a higher interest rate for callable CDs as an incentive for the risk that they might “call” it or pay it off early. If the bank decides to call the CD, it will return the principal and any accrued interest to the depositor. This option is usually exercised when interest rates fall, allowing the bank to refinance the debt at a cheaper rate.

APY (Annual Percentage Yield) includes compounding interest, showing the accurate yearly return. The interest rate is the simple annual interest without compounding. APY provides a more accurate measure of CD earnings.

No. It’s too short a time to earn significant interest, and other short-term options may provide more flexibility without locking up your money.

Yes. The interest rate on a 3-month CD is typically expressed as an annual percentage yield (APY), meaning it shows the annualized return if you were to keep reinvesting over a full year.

No. It’s too short, and interest rates are decreasing. It’s better to get a long-term CD for potentially higher returns.

No. It’s too short a time to earn meaningful interest, and other options provide more flexibility for short-term savings.

Yes. We’re currently transitioning from a high-interest rate environment to a lower one, so locking in a high rate now can be a smart move for long-term savings.

Yes. Just like other CDs, 6-month CD rates are typically expressed as an annual percentage yield (APY), reflecting the annualized return if held for a full year.

No. It’s too short a time to earn significant interest, and other short-term savings options may offer more flexibility.

No. Not all CDs are compounded daily; some may be compounded monthly, quarterly, or even annually. It depends on the terms set by the bank or credit union offering the CD.

Yes. CDs offered by FDIC-insured banks are federally insured for up to $250,000 per depositor per institution. The NCUA similarly insures credit union CDs.

Yes, if you’re saving for retirement or older than 59 1/2, annuities offer tax-deferred growth and lifetime income options. No, if you’re younger and may need the money before retirement, you might want to consider other investment options since annuities typically have penalties for early withdrawals.

Long-term CDs are worth the money if you’re younger and can wait until the term is completed. They are not worth the money if you need access to the funds ASAP due to early withdrawal penalties.

Not really. Banks may increase interest rates for very short-term CDs, but they’re generally not worth it due to the short duration and minimal returns.

It depends on the bank. While bank CDs are insured, insurance companies may be considered safer since they tend to experience fewer closures compared to banks.

Bonds can yield a higher return than CDs, especially now that interest rates are decreasing, making them a potentially more attractive option for long-term growth.

Yes, brokerage CDs are FDIC-insured as long as they are issued by an FDIC-insured bank, with coverage up to $250,000 per depositor, per institution.

Yes. The interest earned on CD accounts is subject to federal and state income taxes.

Yes. CD interest rates are locked in for the duration of the term, meaning they won’t change until the CD matures.

Not always. CD interest can be paid monthly, annually, or at maturity, depending on the terms set by the issuing bank or credit union.

CD rates are typically fixed, meaning the interest rate remains the same throughout the term. However, some banks offer variable-rate CDs, where the interest rate can fluctuate based on market conditions.

No. Interest rates are decreasing.

No. The interest earned on CDs is subject to federal and state income taxes.

No. The money you invest in a CD is not tax-deductible. However, the interest earned is subject to taxation.

No, unless it’s an IRA CD. Regular CDs do not offer tax deferral, and the interest earned is taxed annually.

Yes, CDs are generally safe from bank failures if they are issued by FDIC-insured banks, as they are insured up to $250,000 per depositor, per institution.

No. CDs are not directly affected by the stock market since their returns are based on fixed interest rates, not market performance. However, broader economic conditions can influence interest rate trends.

It depends on your goals. CDs usually offer higher fixed interest rates, but lock up your money for a set period. Money market accounts provide more flexibility and access to funds but often have lower interest rates.

CDs typically earn compound interest, meaning the interest is added to the principal, and future interest is calculated on the new total. However, some may offer simple interest, depending on the terms.

No. CDs and bank accounts at the same institution are combined under the same FDIC insurance limit, which covers up to $250,000 per depositor, per institution, per ownership category.

No. CDs are not considered liquid because your money is locked in for a fixed term, and withdrawing early usually results in penalties.

In the event of a government default, FDIC insurance still protects CDs up to $250,000 per depositor, per institution. However, a default could lead to broader economic instability, potentially affecting interest rates and the banking system’s overall health.

Yes. CDs are generally safe during a market crash because they are not tied to the stock market. As long as an FDIC-insured bank issues them, your investment is protected up to $250,000 per depositor, per institution.

Yes. CDs are generally safer than money market funds because they are FDIC-insured up to $250,000. In contrast, money market funds, which are investment products, are not insured and can be affected by market fluctuations.

No. Credit union CDs are not FDIC insured, but they are insured by the National Credit Union Administration (NCUA) up to $250,000 per depositor, providing similar protection to FDIC insurance.

Not really. You can often do better with an IRA Fixed Annuity, which may offer higher returns and more flexible options for retirement income.

Yes, the principal in market-linked CDs is typically FDIC insured up to $250,000 per depositor, per institution. However, any returns tied to market performance are not guaranteed and may vary.

When markets expect interest rates to fall, banks and credit unions lower yields on longer-term CDs to avoid locking in high payouts for years. This tactic creates an inverted yield curve, where short-term rates are higher than long-term rates. It reflects the expectation that future rates will be lower, so locking into a long CD today may pay less than rolling over shorter CDs in the near term.

Banks set rates to manage deposits strategically. A short-term CD locks in your money, so the bank doesn’t need to offer as high a rate to keep it. Savings accounts, however, allow withdrawals anytime, so banks may offer a temporarily higher APY to attract funds they can later reprice downward. This sales tactic is often more about marketing and deposit strategy than a reflection of the product’s safety or value.

I Bonds include both a fixed rate and an inflation adjustment that changes every six months, so when inflation is elevated, their yield can temporarily exceed CD rates. CDs have fixed rates set by banks based on market conditions and competition, not inflation. While the U.S. government backs both—FDIC for CDs and the Treasury for I-Bonds—the difference lies in how returns are calculated, not in risk. I-Bond rates can fall sharply when inflation drops, while a CD locks in your return for the term.

Money market rates tend to track the Fed funds rate closely, so if cuts continue, yields could dip into the mid-to-high 4% range by year’s end and potentially lower in 2026. The inverted yield curve—where short-term rates are higher than long-term rates—is a sign the market expects further cuts. Callable CDs, especially longer terms like 5 years, are likely to be redeemed early if rates drop, so treat their high yields cautiously. If your priority is locking in above 4% for 2–4 years, focus on non-callable CDs or Treasuries, even if yields are slightly lower than today’s money market rate, to avoid reinvestment risk.

Brokerage CDs are structured for easy trading on the secondary market, which is why many pay simple interest or compound less often. They focus on predictable payouts rather than maximizing compounding. Banks, by contrast, use daily compounding to boost APY and attract depositors. Even if a brokerage CD’s rate looks higher, a bank CD with daily compounding may yield more over the same term—especially if the brokerage CD is callable, allowing the issuer to redeem it early if rates drop.

Banks adjust rates based on how they want to attract and hold deposits. A short-term CD locks your money in, so the bank doesn’t need to entice you with a higher rate. In contrast, a savings account’s rate can be changed anytime, so banks may offer a higher APY to lure deposits they can reprice later. It’s often a marketing move, not a reflection of the CD being riskier or less valuable.

If both truly pay 5% annually, the yield is about the same over one year. The difference comes from how interest is calculated and paid. CDs usually have fixed rates and terms, so your return is locked in for the year. Money markets can have variable rates, meaning the 5% may change, potentially lowering or increasing your earnings. CDs also may compound differently, but without rate changes, the difference is negligible.

CD rate matching is more common at credit unions than at banks, as credit unions tend to be more flexible in competing for deposits. Large national banks rarely offer it, while smaller community banks may match rates to retain customers. In most cases, you need to be an existing customer or credit union member to request a match, but some smaller institutions will extend the offer to new customers. However, credit unions still require you to meet membership eligibility first.

Banks set CD rates based on several factors, including their need for deposits, competition, and expectations for future interest rate changes. An unusually high 18-month rate often reflects the bank’s strategy to attract deposits during a specific economic window. If banks expect rates to fall in the near future, they may offer a higher rate now for mid-term CDs to lock in funding before lowering rates later. This sales tactic creates a “sweet spot” where they can attract customers without committing to higher payouts for too long.

Most CDs don’t allow adding funds after opening. To deposit more, you’ll need to open a new CD or consider a flexible CD if offered.

Not always. Despite requiring $100,000 or more, jumbo CDs sometimes pay the same—or less—than standard CDs. Always compare.

Occasionally, but mostly at smaller banks or if you’re a preferred customer. Most rates are set and non-negotiable.

At a 22% federal tax bracket, you’d owe about $2,200. The exact amount depends on your income and state taxes.

Yes, your bank sends Form 1099-INT if you’ve earned at least $10 in interest.

If you have a huge deposit, for example, $500,000 at 5%, it earns about $25,000 per year before taxes.

The main drawback is low returns compared to inflation and other investments. Your money is locked up, and you can’t take advantage of rising rates during the term.

Not obsolete, but less popular since high-yield savings and annuities often pay more with similar safety.

Rates usually fall as the Federal Reserve cuts interest rates to stimulate the economy