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1-Year CD Rates from Online Banks 2024

Certificates of deposit (CD) rates from online banks are often above average if you are willing to open and manage your account using the Internet. Most online banks offer an online application and money can be transferred to fund the CD via an electronic transfer, check, wire, or credit card. You can view a financial snapshot of any online bank by clicking on its name and then the Financial Details tab.

Highest One-Year Online CD Rates - May 21, 2024

1 Year CD National Average: 0.84% ?

Advertiser Disclosure

Early Withdrawal Penalty is 3 months interest.
Rate History: 5.41% → 5.77% → 5.41%

| Mar 19, 2024

I have 5 other cd's at competing banks and have not had trouble. I tried 3 times today to open one w/ bradesco and it repeatedly declines my app after I input the code they sent me. Customer service was no... Read More

Rate History: 5.35% → 5.40%

| Feb 12, 2020


Early Withdrawal Penalty is 6 months interest.
Rate History: 5.70% → 5.25% → 5.45% → 5.00% → 5.38%

| Nov 12, 2023

Finworth looks legit, but their online disclosures and incomplete and you cannot reach them by phone and they don't respond to inquiries. I am moving along and you should too. Read More

Rate History: 3.00% → 5.00% → 5.38%

| Jul 7, 2022

Insbank 1 yr is 1.5 % 18month is 1.6% 7-7-2022

Early Withdrawal Penalty is 6 months interest.
Rate History: 5.46% → 5.65% → 5.50% → 5.35%

| Mar 21, 2023

Parent seems to be owned by a large Chilean bank. Not saying this is good or bad, but it is complication, especially in the current environment. Read More

Early Withdrawal Penalty is 180 days interest.
Rate History: 5.35% → 5.25% → 5.35% → 5.40% → 5.31%

| Sep 30, 2023

CFG overs very competitive Interest rates on their High Yield Savings account. I did everything ONLINE and have not had any issues with their service. Read More

Early Withdrawal Penalty is 90 days interest.
Rate History: 5.50% → 5.35% → 5.25% → 5.10% → 5.31%

| Aug 26, 2022

Too slow to raise rates. Read More

Early Withdrawal Penalty is 180 days interest.
Rate History: 5.35% → 5.36% → 5.31%

| Jan 30, 2024

Have an IRA rollover, they don't take IRAs any longer.

Special Easy Start Certificate only applies to a maximum deposit of $3,000.
Rate History: 5.30% → 4.95% → 5.30%

| Feb 25, 2023

HORRIBLE SERVICE. My son's campus checking account was hacked and over $9000 was stolen. Fraud department was impossible to reach and we waited on phone several days for over 2 hours at a time. They too...

Early Withdrawal Penalty is 30 days interest.
Rate History: 5.65% → 5.25% → 5.15% → 4.95% → 5.30%

| May 6, 2023

Fully functional bank account that would be great for my needs, but the quarterly interest payment thing is a real nuisance. I wish they would change it. It isn't market.

Warning: Early Withdrawal Penalty is 12 Months interest.
Rate History: 5.00% → 5.50% → 5.00% → 5.60% → 5.30%

| Jul 6, 2023

This is an example of a bad bank. Their online process for purchasing a CD is horrible. You fill it out and it rejects it after all of your private information is disclosed. They there customer service is ... Read More

Early Withdrawal Penalty is 6 months interest.
Rate History: 5.00% → 5.25% → 5.40% → 5.30%

Early Withdrawal Penalty is 3 months interest.
Rate History: 5.50% → 5.40% → 5.30%

| Jul 1, 2022

not really an onllne bank. compare this interface that gives you no information with that of any other bank (I cannot even confirm the rate). cannot switch in and out of cds or np cds. just not an online b... Read More

Early Withdrawal Penalty is 180 days interest.

| Mar 19, 2022

Problem with ties to puppy mills. I closed a cct.

Early Withdrawal Penalty is 90 days interest.
Rate History: 5.65% → 5.25% → 5.10% → 5.25%

Early Withdrawal Penalty is 180 days interest.
Rate History: 5.00% → 5.25%

| Nov 21, 2023

A real pain in the *** process to try and get approved! They were unable to match my drivers license photo with my live image after several times trying! Went to limelight bank instead and got approved in ...

Early Withdrawal Penalty is 180 days interest.
Rate History: 5.60% → 5.55% → 5.50% → 5.35% → 5.25%

| Aug 13, 2023

Yup Bread has 5k daily and 30k monthly limit on ach transfers. It's low but there are other banks who have similar ach limits if not lower like Valley Direct Bank and BMO Alto. The part that bothers me i... Read More

| Jul 1, 2022

Very easy opening process and wonderful staff.

Early Withdrawal Penalty is 90 days interest.
Rate History: 5.63% → 5.75% → 5.60% → 5.50% → 5.20%

| Apr 27, 2023

have had 3 cd accounts. all interactions with instructions for disposition of funds were never exactly enacted as discussed and requests for confirmatory emails never sent with details as terms discussed. ... Read More

Rate History: 5.15% → 5.60% → 5.40% → 5.20%

| Apr 20, 2024

Save your tears for another day. Very frustrating. 1-star. Read More

Rate History: 4.80% → 4.75% → 5.20% → 5.00% → 5.15%

| Dec 27, 2022

They gave a hard time with their cashier's check. They returned my deposited check that was emitted by them. Could you believe?

Early Withdrawal Penalty is 90 days interest.
Rate History: 5.65% → 5.45% → 5.55% → 5.00% → 5.15%

| Nov 12, 2022

I was shopping for deposit rates in August, and NerdWallet, a site I had previously trusted, had it on their list. I was unaware they took deposits. They are the only bank that ever duplicated a transactio...

Warning: Early Withdrawal Penalty is 270 days interest.
Rate History: 5.37% → 5.30% → 5.25% → 5.20% → 5.15%

| Dec 18, 2023

I submitted a CD application 18 months 5.50 APY over a week ago and my application was declined no reason was given, I have the funds in another bank for transfer, credit score over 800. I think the reason... Read More

Rate History: 5.55% → 5.40% → 5.55% → 5.38% → 5.15%

Rate History: 4.85% → 5.00% → 5.30% → 4.90% → 5.10%

| Jan 2, 2024

Like others, I've been with Capital One and its predecessor ING Direct since 2007. I've also been getting cheap bank rates on my savings account and didn't realize that there was something better, although... Read More

Early Withdrawal Penalty is 180 days interest.
Rate History: 5.55% → 5.50% → 5.30% → 5.15% → 5.05%

| Apr 20, 2024

You really cannot prepare for how bad the customer service is on this one until you try to try to open and account and then need to call to find out why it wasn't funded promptly with your ACh bank instruc... Read More

Rate History: 5.18% → 5.02%

| Jun 1, 2021

Update: STAY AWAY FROM THIS BANK! They have no clue how to run an online bank. This bank is not ready for prime time. Nothing but problems. Customer service is dismal at best.

Early Withdrawal Penalty is 90 days interest.
Rate History: 5.40% → 5.30% → 5.15% → 5.30% → 5.00%

| May 2, 2022

Barclays is the worst. Transfer speeds even worse than Synchrony now. Service is worse than anything. Save yourself the trouble of getting sucked into rates that are sometimes competitive and choose anythi...

Early Withdrawal Penalty is 90 days interest.
Rate History: 4.80% → 5.30% → 5.00%

| Oct 23, 2023

Synchrony Bank recently closed 3 of my accounts with them and this decision was completely unwarranted. I had two Guitar Center cards and one Levin Furniture card. I found out about this through a push not... Read More

Rate History: 0.05% → 5.30% → 4.95% → 5.00%

| Apr 18, 2018

Worst experience of my life. Did not fund and gave $25 to my own charity. Read More

$1,000 minimum deposit to open an account. A penalty may be imposed for early withdrawal. Account fees may reduce your earnings.
Rate History: 4.75% → 4.80% → 5.15% → 5.17% → 5.00%

| May 21, 2021

avoid this Read More

| Jul 9, 2023

Looks like indexed savings is now at 5.31%. Down, but it still beats anything else here. Why aren't you highlighting this for your readers? Read More

Early Withdrawal Penalty is 90 days interest.
Rate History: 5.50% → 5.00%

| Nov 18, 2023

bad bank hold your deposit over months without credit in your account, no interest, they don’t want pay you interest , they want your money with 0% interest. Read More

Early Withdrawal Penalty is 90 days interest.
Rate History: 5.50% → 5.35% → 5.25% → 5.10% → 4.95%

| Aug 2, 2023

Sallie mae is just a horrible institution. We've done business with them before and swore on the holy bible not to go near there again, but a 18 mos cd at 5.55% brought us back.

Warning: Early Withdrawal Penalty is 2% of the account balance.
Rate History: 5.25% → 5.05% → 4.95% → 4.80% → 4.95%

| Jul 3, 2023

A 2% early withdrawal fee on a 1-year CD is almost equally insane as a 270 day one.

Rate History: 5.20% → 5.25% → 5.15% → 5.00% → 4.90%

| Feb 15, 2024

best bank on the list but no longer the most competitive Read More

Early withdrawal penalty is one-fourth the amount of interest that would have been earned had CD been held to maturity.
Rate History: 5.00% → 4.90% → 4.85%

| Nov 12, 2023

This was terrible as Everbank. Then it was terrible as TIAA. Now it is terrible as Everbank again. Not sure where they are going with the branding, but still terrible. (Bestcashcow's system is forcing ... Read More

Rate History: 5.40% → 5.25% → 4.85%

| Nov 18, 2023

bank delayed 1-2days to credit into your account, pay less interest.

Rate History: 5.24% → 5.13% → 5.02% → 4.76%

| Dec 14, 2022

Agree with Jaben to stay away from docfcu. They don't appreciate loyal members and easily turn down any requests after a delayed response. I have closed my accounts and moved my funds to better institutio...

Rate History: 5.10% → 5.25% → 5.35% → 5.00% → 4.75%

Early Withdrawal Penalty is 6 months interest.

| Jan 5, 2024

Easy to use site, great rates and good customer svc. Can get to real bankers via voice, chat or live video. Read More

Rate History: 5.00% → 5.00% → 4.90% → 4.80% → 4.70%

| Jan 10, 2024

AVOID at all costs. We read the addendum to the final page of the LENGTHY account agreement mailed to us after completing the online portion. Guess what? It gives this sweet seeming Discover Bank access to... Read More

Rate History: 1.00% → 4.60%

| Apr 25, 2022

broke the machine, braddah

Rate History: 5.10% → 4.75% → 4.50%

| Aug 13, 2023

Been a customer for a couple of years now with interesting checking, been a happy customer. They give you a $10 reimbursement on atm fees per statement cycle. They pay you to leave your money there curre... Read More

Rate History: 4.50% → 4.50%

| Dec 21, 2023

Very easy to setup 6 month 5.35% CD from cornerstone account Read More

Warning: Early Withdrawal Penalty equals one year of interest.
Rate History: 5.30% → 4.50%

| Mar 17, 2023

STAY AWAY ! They closed my accounts with no warning. After multiple successful direct deposits and mobile checks deposits, they claimed one of the three checks I deposited a few days ago was fake. No...

Rate History: 4.00% → 4.50%

Rate History: 5.25% → 4.50%

| Dec 25, 2023

I joined in PENFED in Spring Of 2023 after 15 yrs of belonging to one of the banking giants. I found my accounts dwindling fast unexplained decreases. I decided to close the account but had to return a mer...

Rate History: 4.00% → 4.35%

| Nov 8, 2023

I see nothing exciting about AmEx Bank. Sign on is a hassle and the rates are adequate. Multiple accounts are not summarized. To cancel maturing CDs require phoning in or snail mail. Above average serv... Read More

CTBC Bank Corp. (USA)
4.30% $5,000 Learn More

Rate History: 4.50% → 4.85% → 4.75% → 4.25%

Rate History: 3.50% → 4.25%

Early Withdrawal Penalty is all interest earned.
Rate History: 4.00% → 4.25% → 4.00%

| Mar 30, 2021

These guys are the best local bank. Very responsive.

Amboy Direct
4.00% $10,000 Learn More

Early Withdrawal Penalty is 1% of principal.

| Dec 30, 2018

Garden14 Read More

Early Withdrawal Penalty is 180 days interest.
Rate History: 5.00% → 5.00% → 3.50%

| Jun 13, 2023

I'll steer clear of Dollar Savings Direct and My Savings Direct until they guarantee users at both online divisions their best rates. Banks have the right to segment their customers yes, but these games w... Read More

Rate History: 4.75% → 1.25% → 5.65% → 1.25% → 2.00%

| Apr 30, 2019

No issues. I feel confident using them. Read More

Rate History: 0.05% → 2.00%

| Jan 29, 2024

Tried to enter information on line to open a 5 year CD, multiple time and wasn't accepted. Talked to a live person who was of no help at all. My credit score is over 800 and I have plenty of money in oth... Read More

| Aug 13, 2019

I filled out the application 10 days ago answering all questions and sent a file with a copy of my drivers license to Western Bank. I received an email saying that a banker would call me within one busines...

Rate History: 1.65% → 1.01%

| Jan 27, 2023

The worst bank I have ever had Read More

Rate History: 0.30% → 0.70%

| Nov 28, 2022

While USAA was at one point a great option for all your banking needs, the service has deteriorated so much that I'm currently in the process of changing banks after more than 2 decades. The final straw w... Read More

Rate History: 0.45% → 2.02% → 0.45%

| Aug 28, 2022

Rates are totally uncompetitive now.

| Feb 25, 2023

I have been working for this company more than 5 years. I would not recommend any investment with First Citizens Bank. They are the worst performer on the market based on the customer and employee reviews... Read More

Early Withdrawal Penalty is 181 days interest.

| Jun 10, 2022

This bank hasn't raised their rates! Maybe I was sleeping but I need to get out of here fast. Read More

| Dec 21, 2022

Stay away from this bait and switch bank that uses teaser rates. They lowered my interest rate twice in the first 2 months of opening my account. They said they had the right to change their rate at any ti... Read More

| Aug 7, 2020

Had a car loan with them. Paid it off because I was selling the vehicle. They told me it would take 10 business days to clear the transaction (it was immediate via electronic) and was out of my account th... Read More

Edu Federal Credit Union
0.10% $500 Learn More
All rates listed are Annual Percentage Yield (APY). The Min listed is the minimum deposit account balance required to obtain the rate listed.

Summary: Today's Highest Online CD Rates - May 2024

Bank Institution Product Term Interest Rate (APY)
Charles Schwab Bank, SSB 1-Year 5.40% APY with $1,000 minimum
Finworth, a division of InsBank 1-Year 5.38% APY with $50,000 minimum
TotalDirect, a division of City National Bank of Florida 1-Year 5.35% APY with $25,000 minimum
Dollar Savings Direct, a division of Emigrant Bank 3-Year 5.00% APY with $1,000 minimum
M.Y. Safra Bank 3-Year 4.70% APY with $500 minimum
First Internet Bank of Indiana 3-Year 4.66% APY with $1,000 minimum
First Internet Bank of Indiana 5-Year 4.55% APY with $1,000 minimum
BMO Alto, a division of Bank of Montreal Harris 5-Year 4.50% APY with no minimum
Department of Commerce 5-Year 4.34% APY with $500 minimum


One-Year CD - Online Banks 2024

Certificates of Deposit (CDs) are offered by most banks in a variety of maturity dates. The 1-year rates in the table above are listed in descending order based on Annual Percentage Yield (“APY”) which is the rate of return that you will earn, when adjusted for compounding, over a 12 month period, and the way in which banks are required by US banking regulations to advertise their CD rates.

A certificate of deposit represents a time commitment between a depositor (someone who has money to put in the bank) and a bank. The depositor agrees to leave a specified amount of money in the bank for a set period of time. The bank agrees to keep the money safe and to provide a fixed rate of return.

A 1-year CD has a very brief time commitment and can also generate a rate of return above the prevailing savings rate. Therefore, many people use 1-year CDs to slightly augment their rates of return over savings with only slightly more risk than they would have if they were entirely in savings accounts and money market accounts.

FDIC Insurance

Provided the bank is FDIC-insured and the deposit amount is within FDIC limits, the principal is also secured by an agency of the United States federal government against loss. Further information about FDIC insurance is found in this article and if you have specific questions about your own circumstances you should use the FDIC’s Electronic Deposit Insurance Estimator.

CD Risk

The principal of a CD is safe and insured as long as the deposit amount is FDIC limits. Interest that accrues and is paid or deposited to the principal also is safe as long as the total balance remains within FDIC limits.

A CD however bears two significant risks:

  • Liquidity risk

    If you think you may need access to your principal during the period of the time commitment for a major purchase or an unforeseen expense, CDs are generally not a good place to store money. The terms of most CDs outline the penalty that will be assessed in order to access your capital. This penalty is usually assessed in terms of time periods. For example, a common penalty on a 1-year CD is 3 months, although you should always check this carefully in the terms and conditions before opening a CD as it could be longer. Banks and credit unions are not obliged to offer an early withdrawal penalty, and may change or remove or even refuse to honor the early withdrawal penalty in their paperwork. For further details, please read this article. BestCashCow never recommends a strategy involving the purchase of a CD when you have a high likelihood that you will need your capital.
  • Inflation risk

    Since CDs are considered a very safe investment when you stay within FDIC and NCUA-limits, they often do not pay much over the anticipated rate of inflation, and can often pay under this rate. Were interest rates to rise (or the inflation rates to rise), the real or inflation -adjusted value of your CD can drop over time, especially when you factor in the tax consequences of ownership of a CD. In the event of rates rising, you may be able to use the early withdrawal penalty to get your principal but for the reasons mentioned above, BestCashCow does not recommend relying on such a strategy.

Be sure to think about how CDs fit into your overall portfolio objectives.

CD Laddering

An effective strategy used by many to bolster their savings strategy is to own CDs with various maturities. In other words, a depositor with $400,000 and put $100,000 in a 3 month CD, $100,000 in a 6 month CD, $100,000 in a 9 month CD and $100,000 in a one-year CD, then your liquidity risk in highly diminished because you are always near maturity on one of your CDs. (Note that no more than 2 of these CDs should be at the same bank in order to avoid exceeding FDIC limits).

The reality is that we are in a very low interest rate environment, and any CD with a maturity of less than 1 year is going to pay below, perhaps well below, the prevailing rates in the leading online savings accounts or at brick-and-mortar banks. Therefore, the strategy outlined above would be largely absurd in the current environment.

A laddering strategy that would make more sense for the same depositor who might otherwise hold $400,000 in cash would be to put $100,000 in a one year CD every three months. Liquidity risk in the same way is diminished as the depositor is never more than 3 months from maturity, yet the depositor is picking up some small improvement over the best savings rates than where all of his money to be in cash.

Laddering strategies can also involve longer term CDs, but one that involves terms as little as 1 year can improve on the savings rates with minimal impairment to your liquidity.

More information on CD laddering is available in this article.

How Interest is Paid

The method of distributing the interest earned on a CD varies by bank. Some banks pay interest monthly, other semi-annually, and others at the maturity of the CD. In general, online banks pay the interest electronically either by adding it to the principal balance or with an ACH transfer back to the depositor's primary linked checking account. Other online banks may pay via a check in the mail.

Interest Rate

Currently, the most competitive banks offer 1-year rates that are slightly above the top online savings and money market rates. Depositors need to decide if they want the fixed rate of the CD or the flexibility of the savings account (savings accounts do not come with any term time requirements).

In a rising rate environment, it is generally better to keep money flexible and liquid and put it into either short term CDs or savings or money market accounts.  In a falling rate environment, it is generally better to lock the rate using a CD or some other fixed rate investment. In a stable rate environment, you may be able to collect a small premium in exchange for your loss of liquidity.

Online banks generally offer CDs available to residents of any of the 50 states. The CD must be opened online and funded either by online transfer or by mail.


What are CD rates?

CD rates are the fix rate that the bank pays a depositor for entering a CD for the entire term of a CD. They are expressed in annual percentage yield (“APY”) terms, so that they are standardized. $100,000 invested in a one year CD at 1% will be worth $101,000 at maturity in exactly 1 year. $100,000 invested in a two-year CD at 1.50% will be worth $101,500 in exactly 1 year and worth $103,022.50 at maturity (assuming the interest is not paid out before maturity, but is added to the principal). Please see BestCashCow’s Savings & CD Calculator to better understand the magic of compounded interest over time.

Do CDs Pay Interest Monthly or Yearly?

When opening a CD, it is important to consider how interest is credited or paid. Interest can be credited to the CD monthly, quarterly or annually. For those CDs of one year or less, interest may be credited only at maturity.

When interest is paid, the CD holder may have arranged for the interest to be mailed to them as a check. The other option is for the interest to be added to the principal of the CD.

Regardless of how and when interest is paid, it is required to be expressed (standardized) by all banks in the form of an annual percentage yield (“APY”) rate.

How Is Interest on CDs Taxed?

Interest on CDs is taxed as ordinary income. Your bank will provide you with a 1099-INT detailing the interest that you must report on your tax return at the end of each year. Regardless of whether interest is paid in the form of a check or added to principal, CD holders need to report the interest in the year in which it is paid. Purchasing a Certificate of Deposit of one-year or less that pays a single lump sum interest payment at maturity may defer tax on interest until the following year, but otherwise holders of CDs should generally expect to pay ordinary taxes on interest earned in every year in which they hold a CD. Further detail is found in IRS Publication 550 (page 5).

Why Are CD Rates So Low?

CD rates on terms of 1 and 2 years were very constantly low for many years from 2009 to 2015 as the Fed Funds rate was held at zero following the great recession. Rates on longer term CDs were occasionally more interesting during this period (depending more heavily on the level and direction of the US Treasury Bond).

The US Federal Reserve’s action towards normalizing interest rates has been painfully slow (resulting from Brexit, European financial instability, etc.), and CD rates have remained at levels that are very low by historical norms. However, we have seen CD rates rise in 2016 and 2017 as the Federal Reserve has begun to slowly raise the Fed Funds rate.

Are CD rates going up or down? When are they expected to rise?

If the Federal Reserve accelerates its plan to raise the Fed Funds rate or if global economic developments were to cause US treasury rates to rise, we would quickly see higher CD rates. However, the global economic environment is uncertain with European long-term interest rates being negative. Should the US also enter a recession and the US 10-year Treasury rate fall still further, it is possible that CD rates could fall further.

What is a good rate for a CD?

BestCashCow lists the best CD rates available from online banks above, and the best rates from local banks and credit unions. A good rate is the best rate that you can find at an FDIC or NCUA-insured institution, provided that it compensates you adequately over the best savings rates for the liquidity that you are giving up. Only you can determine based on your own personal circumstances whether that is a good CD rate for you. BestCashCow’s Savings & CD Calculator can help you to understand how much more interest a CD can generate over a savings account.

Is there an advantage to a 12-Month Certificate of Deposit over Online Savings Accounts?

At any moment in time, there is ordinarily a premium to an online 12-month CD rate over an online savings rate. The table below demonstrates the spread between the two over the last several years. Whether it makes sense for you to take advantage of these higher rates in the 12-month rate depends on your own need for liquidity and your view on whether and how fast savings rates will rise.

What are the advantages of online one-year CDs?

  • Funds deposited in FDIC banks and within insurance limits are protected by the full faith and credit of the United States government.
  • CDs provide a predictable, set rate of return.
  • The CD can be opened from the comfort of your house.
  • The CDs are generally available to any resident of the United States.

What are the disadvantages of one year CDs?

  • One year CDs pay interest rates that are just above the leading rates offered on online and branch-based savings and money market accounts. There is a very slight premium for having the money locked up for one year. Your own circumstances and tax rate will help you to determine if that premium provides adequate compensation to you for your loss of liquidity.
  • The deposited money is committed for one year.
  • The account must be opened online and all inquiries must be conducted online or via the phone.
  • Depending on the bank, the opening and funding process can take several days to weeks although the bank generally locks the rate once the application has been received and approved.

All banks listed on BestCashCow are FDIC insured; strongly recommends that you stay within FDIC insurance limits and that if you are unsure of how the limits affect you, please visit the FDIC website.

To understand all of the income generating options available to a saver, please view the Income Generating Investments Comparison Chart.

What to Look for in an Online CD Account:

FDIC and NCUA Insurance - In order to secure the viability of the US banking system, the Federal government provides insurance to a maximum amount of $250,000 per individual per institution (or $500,000 for joint account holders). This insurance is provided to banks through the FDIC and to credit unions through the NCUA. All banks listed on BestCashCow are FDIC insured; most, but not all, credit unions listed on BestCashCow are NCUA insured. Ordinarily, all deposits (CDs, Checking, Savings Accounts) held in the same type of ownership are added together and insured to $250,000, funds held in different types of ownership (Individual, Joint, Trust, Retirement) may fall under separate insurance provisions. In order to determine if your financial institution is insured and to ascertain your coverage limits, please visit - as appropriate - either and use the BankFind functionality or and use the Share Insurance Toolkit. We recommend that you deposit funds in only FDIC and NCUA insured institutions and that you do not exceed coverage limits.

Minimum Deposit - There is such competition for your money that the best CD rates are often available for sums as little as $500.

Term and CD Rates- Three month and six month certificates of deposit rates do not dramatically exceed those in online savings and money market accounts, and money market funds. Moreover, investors in states with higher state tax, such as New York and California, in an ordinary environment (not 2011) will perform equally well in a three-month US Treasury Bond or pre-refunded municipal bonds after they account for the fact that interest produced on those products are tax advantaged.

Generally, longer the CD term, the higher the CD rate. In general, the term you choose depends on how long you want to tie up your funds and also what you think will happen to interest rates.

Interest rates will fall. Then it is better to put money into longer-term CDs to maintain the high rate as long as possible.

Interest rates will rise. Put money into short term CDs. By keeping your cash more liquid, you can re-invest it as rates go up.

Interest rates will remain flat. In this case, going for longer-term CDs will help you maximize your interest income.

Learn more about getting the best CD rates.

Avoiding CD Pitfalls:

Early Withdrawal - Any certificate of deposit will bear substantial penalties for early withdrawal, if it is even allowed. Ordinarily, the penalty for early withdrawal will be a loss of all of your accrued interest, but there are certain circumstances where banks will also assess penalties that will result in a loss of some of your principal.

Recent Articles

3 Simple Reasons to Never Ever Buy a Brokered Certificate of Deposit

On and off from February to May of 2023, US financial markets witnessed something that they ordinarily do not experience. We saw 1-year and 18-month brokered CDs rise to levels that were competitive with 1-year or 18-month online CDs, as some of the nation's largest banks raced to quickly fortify their balance sheets in the wake of the failures of Silicon Valley Bank, Signature Bank and Republic Bank.

For many depositors - especially high net worth depositors with lots of money in brokerage accounts - these products appeared compelling. They could gain competitive yields from banks they recognized and that are not ordinarily rate competitive (Chase, Bank of America, Wells Fargo, Truist, etc.) up to FDIC limits without the need to open online CD accounts all over the place. Concerns over a possible Federal government default from an unwillingness of the part of Congress to raise the debt ceiling made CDs still more attractive and accelerated customer flows from Treasurys into brokered CDs.

Almost a year later brokered CD rates are no longer competitive with online CDs.

Some still like what they perceive to be more liquidity in brokered CDs due to the absence of early withdrawal penalties.

At the same time, many BestCashCow readers who rushed into these brokered CDs that are nearing their maturity are trying to get out of them shortly before maturity (often in order to roll into longer-dated CDs and Treasuries before rates continue to fall).

They are reporting that brokered CDs do not offer the additional liquidity that has been perceived due to the following:

1.The market to dispose of brokered CDs does not exist, or if it does, it is not accessible through the major brokers or through online brokers.  Bids that are solicited are so far from the market that huge losses would be incurred if sold.

2. While these products were sold without commission, every broker in the country is going to charge a significant commission upon sale.  Even online brokers that may allow you to sell other fixed income products without commissions charge at least 10 basis points on any sale of brokered CDs before maturity.

3. There are also losses if held to maturity.  Brokered CDs are often structured so that maturity is on a Friday or over the weekend.  Either the broker or the bank is earning interest during this period, but the customer is losing interest.  In many cases, customers do not realize that the issue date was several days after their money was withdrawn from their accounts.   So, the customer loses days of interest on both the purchase and the sale.

Bottom line: Compare online CD rates on sites like BestCashCow or and stick with them over brokered CDs. One-year and longer term CDs remain more attractive than comparable US Treasurys, even for depositors in the highest state and local tax brackets.

You Have Not Missed Your Chance to Lock in Long-Term Cash At Higher Rates

Rate information contained on this page may have changed. Please find latest cd rates.

US Treasury rates came down dramatically last week, with the 1-year falling from 5.32% to as low as 5.01%, with still more pronounced declines along the longer end of the curve (the 10-year, for example, crashed from 4.55% to 4.20%).

Many are suddenly wondering if they have missed their chance to lock in great rates for long periods of time.

The answer is that you have not.

Your first option is to check CD rates. I wrote on November 21, before the latest move on Treasury rates, that CDs were offering more attractive yields than US Treasury bonds even for depositors in the highest tax brackets of the highest tax locales. The good news is that - at least as of now - most banks have not lowered their CD rates. 

Check one-year CD rates here.

Check five-year CD rates here.

You may find still higher rates where you live.

Check local CD rates here.

A second option is to have a look at US agency bonds. These bonds, particularly those issued by the Federal Farm Credit Bank, the Federal Home Loan Bank and the Tennessee Valley Authority, have the same tax attributes as US Treasury bonds (interest is state and local tax exempt). If you believe that interest rates on long-term US government debt have seen their highs, these instruments may be worth a look as they offer a premium over Treasury bonds that can widen out above 100 basis points if you are willing to go out beyond 10 years. Most of these instruments are callable, but you can mitigate that risk by buying notes that are trading at significant discounts.

I caution again that agency bonds may not be appropriate for any more than very small positions.   The US government has a moral obligation to bail out these agencies if they go into default, but that has never been tested, leaving credit risk that is technically greater than US Treasury bonds. Also, while we may have seen the peak in this cycle for short interest rates, the government's debt situation could make buying any longer-term bonds here more risky.

Your third option is simply to close your eyes and start diving into a portfolio that may include CDs, Treasury bonds and perhaps agencies with different maturities now. It of course is still possible that we may have seen the peak in short-term Treasury yields, but the rates are still attractive versus where they were when 2023 began (or when any other year in the prior 15 began). If you can see past the day-to-day or even week-to-week movements, you may find that when we end 2024 hindsight will show that it was not too late to lock in now.

Certificates of Deposit Are Now More Attractive than US Treasurys Across All Maturities for All Tax Brackets

Rate information contained on this page may have changed. Please find latest cd rates.

Interest rate moves over the last 23 months have been so pronounced that most banks - including online banks - have struggled to offer their customers certificate of deposit rates that compete with what those same customers can get in US Treasury markets.   This has been especially true for those higher earners who live in cities like New York, Boston, Chicago, San Francisco and Los Angeles who benefit from the state and local tax exclusions that apply to interest from US Treasurys or certain federal agencies, like Federal Home Loan Bank (FHLB) and Federal Farm Credit Bank (FFCB).   (Residents of Washington State, Florida, Texas or other states without state income tax, or those with low state income tax rates, cross the threshold where CDs are more attractive more quickly).

US Treasury markets have leveled off and banks have become more competitive. Earlier this year there was a period when one-year CDs were more attractive than one-year Treasuries to even those who benefit greatly from the state and local tax exclusions on Treasurys.  Now, those same people will find that fully taxable CDs offer them a higher after tax yield than Treasurys across virtually all maturities.  

As of this writing, these are the highest nationally available CD rates:

9-month CD @ 5.75%

12-month CD @ 5.67%

18-month CD @ 5.80%

24-month CD @ 5.50%

48-month CD @ 5.20%

60-month CD @ 5.25%

You also may find higher rates locally at branch banks by checking BestCashCow's local CD tables, or a completing site like RatesAndInfo.

Even if you are one of the fortunate or unfortunate people to be paying the top local tax rates in the country (which seldom pierce 10%), you are going to earn more in CDs right now.  

US Treasury and US agency instruments may still make sense for some depositors who may require greater liquidity, but their rates, even after accounting for the tax benefits, may be less competitive with CDs moving forward.

Bottom line: The "I can do better in Treasurys" cocktail chatter has run its course.