CDs are similar to Online Savings Accounts and Money Market Accounts, in that they offer great returns without risk. CDs are different because they “lock up” your money for a specific period of time. You’ll be charged a fee if you want to access your money before the end of the term.
Even though CDs have less liquidity than regular savings or checking accounts, they may offer a higher return. This is particularly true if you choose a longer-term CD, such as a 60 month CD rather than a 12 month CD.
As of this writing, the Federal Deposit Insurance Corporation reported that the national average CD rate ranged from 0.15% up to 1.21%, depending on the CD’s term.
Many banks, however, offer significantly higher CD rates for consumers who are willing to do some research. We compared the CD rates of dozens banks and financial institutions. Start your search for a high yield CD here.
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The importance of Certificates of Deposit
- CDs are best for long-term saving. CDs are not ideal for short-term money needs because they lock your funds in for a specified period (usually between 12 and 60 months).
- Your funds are safe with CDs. Thanks to FDIC coverage, CDs are a safe place to store your money while earning interest.
- Check CD fees. If you want to withdraw your money earlier, most CDs will charge a fee. Be sure to understand the fees involved before you open this account.
- Online banks may offer better rates. Online banks may offer better rates than brick-and-mortar banks. Compare CD rates between legacy banks and online institutions.
The best CD rates can help you achieve your goal of finding a superior investment for the short term. We compared the best online banks and financial institutions to help you narrow down your options. Our ranking was based on the interest rates and other features offered by each bank.
Reviews of the Best Certificates of Deposit Accounts
When choosing where to open your certificate of deposit, there are several factors to take into consideration. You should consider whether you would like to open the CD in person, or online. Also, take into consideration the applicable rates and terms, as well as the fees for early access to your money.
You can find out more about the CD rates of each bank we have profiled and other important details in the following reviews.
PNC Bank
PNC bank provides a wide range of banking products including certificates of deposits. The CDs are free of monthly fees and you can check your account online or via the BBVA app.
The CD term can range from one month up to ten years. CDs that have longer timelines are rewarded with higher rates. You will be charged if you withdraw your money before the term has ended.
You will pay $25 and 1% of your CD’s value if you withdraw it early. If you want to cash out your CD early with a term longer than one year, you will pay $25 plus 1% of the amount withdrawn.
CD rates:Online cds that have terms ranging from 11 months up to 36 months pay up to 4.04% APR.
CIT Bank
CIT bank offers a variety of CDs that offer excellent terms. The 11-month CD with no penalties is a standout because it has a high return rate. You will not be penalized if you withdraw your money earlier.
CIT Bank offers CDs of various lengths and jumbo CDs that are available for deposits over $100,000. No account opening or maintenance fees are charged for any of CIT Bank’s CDs.
CD rates:CIT Bank pays a range of APYs on CDs, ranging from 0.30% up to 4.65% depending on the term. The best rates are available on 18-month CDs that pay 4.60% APY. They also offer an 11-month CD with no penalty at 4.10% as of this writing (02/3/23).
Discover the best way to buy
You can choose a CD lasting anywhere between three months and 120 months with Discover. No fees are charged to open a CD. This includes account opening or maintenance fees. However, the minimum deposit amount is $2,000.Discover is also unique in that it has reasonable penalties for early withdrawals. For CDs that have a term less than a year, the penalty is three months simple interest. The penalty for early withdrawal of a CD lasting between one and four years is only six months simple interest.
CD rates: The 120-month (10 year) CD offers the highest rate, with a current 4.10% APY. However, it is a long wait. If you are willing to give up your money for only 12 months, then you can earn an interest rate of 4.75%.
Marcus by Goldman Sachs
Marcus by Goldman Sachs, a popular online banking service for personal loans and savings accounts with high yields, also offers CDs that are rewarding. The terms of its CDs are from seven months to six-years, and a $500 minimum deposit is required to start.
Marcus by Goldman Sachs offers a 10-day rate guarantee, which allows you to increase your CD’s advertised rate if it increases within 10 days.
CD RatesSome CDs from Marcus by Goldman Sachs pay the highest rates, currently 2.60% annual percentage yield. Marcus by Goldman Sachs offers special CD rates for a limited time, such as 0.65% on a 9-month CD.
What’s holding it back:Marcus Goldman Sachs only offers online banking, so you can’t open your CD personally.
Synchrony Bank
We selected Synchrony Bank as our top pick because they don’t require a minimum CD balance and offer competitive rates. It has a 15-day rate guarantee that allows you to increase your rate in the event of a rate hike within 15 days after your CD purchase.The terms range from 3 months to 60 months. The fees charged for early withdrawals of their CDs is also reasonable. Early cash-outs of CDs that have a term of 12 months or less are charged 90 days simple interest.
CD rates:Five year (60 month) CDs are currently paying 2.60% annual percentage yield (APY), and four-year CDs (48 months) pay 2.30%.
What’s holding it back:Synchrony Bank cds are designed to be opened online and maintained. If you want a more personalized experience, or prefer to do your banking in person, you should consider another bank.
Find the best CD rates
You should consider other factors before opening a CD account. When compiling the list of the banks offering the best CD rates in 2023, we considered the following:
Rates and Terms
We gave priority to banks who offer the best CD rates, but we also focused on those banks which offered at leastone CD that had an APY at least twice the national average CD rate. BBVA did not score well in this section, but we included them because they have no account fees and a good reputation among the major U.S. banks.
Account Fees
We only looked at banks that do not charge fees for opening a CD. We chose banks which do not charge monthly maintenance fees.
Early Withdrawal penalties
We looked at banks that had reasonable early withdrawal fees. We also looked for accounts or CDs that did not charge a penalty for early withdrawals.
FDIC Insurance
We only included in our rankings institutions that provide FDIC insurance. This insurance protects up to $250,000. per account holder.
What you need to know about certificates of deposit
You might be wondering how they work or why people opt for this option if you’ve never had a CD account before. Consider these important factors before opening a CD.
- CDs are superior to other deposit products. According to FDIC figures, the national average CD rate is four times higher than the national average savings account rate.
- CDs with longer maturities offer higher yields. Longer-term commitments can result in higher returns. FDIC data indicates that the average annual percentage rate (APR) for a CD of one month is just.02%, which is not much higher than a simple savings account.
- Rates of CDs can increase or decrease over time. The current interest rate environment is used to determine CD rates, which includes benchmark interest rates. You may get a higher CD rate when benchmark rates rise.
- Rates for CDs can be higher when you deposit larger amounts. You may qualify for a jumbo CD if you deposit $100,000 or more. This CD type requires a large minimum deposit but the banks will pay APYs higher to lock in additional funds.
The Best CD Rates for 2023
The Bottom Line: Lock in the Highest CD rates
A certificate of deposit is one of your best options for growing your money. CDs offer guaranteed returns and low risk, making them a great choice for investors who want to diversify their portfolios while locking in higher rates.
It’s crucial to compare the APYs and terms of different credit unions and banks before choosing a CD to ensure you get the best possible rate. If you’re looking for the best CD to suit your needs, shop around and compare offers. You can also consult with financial advisors.
You can find the best CD for you by doing thorough research and comparing. This will give you peace of mind and the highest possible rate.
