Image Courtesy: www.pixabay.com
Image Courtesy: www.pixabay.com
You are viewing rates from banks across California
Below are 5-year CD Rates from banks that are located in California. Five-Year Certificates of Deposit (CD) are generally the longest term CD that most banks will offer. They tend to offer the highest rates but require the longest commitment. Five year CDs are especially popular in a declining interest rate environment as depositors can lock money in at the highest rate possible for the longest period of time. They are also popular with depositors who are willing to lock up money for five years in return for extra yield.
CA - August 4, 2025
5 Year CD National Average : 0.92% ?
| Banks | APY | MIN | MILES ? | |
|---|---|---|---|---|
|
4.20% |
$10,000 |
- |
Learn More
|
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Early Withdrawal Penalty is 730 days interest. |
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|
Neil | 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 |
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|
4.15% |
$0 |
- |
Learn More
|
|
|
Rate History: 4.00% → 4.15% |
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|
mcriss | 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 |
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|
4.00% |
$1,500 |
- |
Learn More
|
|
|
Early withdrawal penalty is 365 days interest. |
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|
m abram | Jul 4, 2025 Bread's current 6-month CD is 4.45%, not 4.35%. Read More |
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|
4.00% |
$25,000 |
- |
Learn More
|
|
|
Rate History: 3.05% → 3.50% → 4.11% → 4.00% |
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|
79Thru | 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 |
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|
4.00% |
$500 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 90 days interest. |
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|
JBaker65 | 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. Read More |
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|
3.97% |
$1,000 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 360 days interest. |
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|
Beenthere | Jan 30, 2024 Have an IRA rollover, they don't take IRAs any longer. Read More |
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|
3.95% |
$25,000 |
- |
Learn More
|
|
|
Warning: Early Withdrawal Penalty is 2% of the account balance. |
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|
Frank M | Jul 3, 2023 A 2% early withdrawal fee on a 1-year CD is almost equally insane as a 270 day one. Read More |
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|
3.91% |
$500 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 90 days interest. |
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|
Richard | Jul 1, 2022 Very easy opening process and wonderful staff. Read More |
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|
3.87% |
$10,000 |
- |
Learn More
|
|
|
Rate History: 4.49% → 4.44% → 4.28% → 4.07% → 3.87% |
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|
samcasino | Mar 5, 2021 The best rate on any CD or savings account is .40% Read More |
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|
3.80% |
$5,000 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 6 Months' Interest. |
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|
jp2 | 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 |
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|
3.80% |
$2,500 |
- |
Learn More
|
|
|
Rate History: 4.00% → 3.85% → 3.75% → 3.80% |
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|
HAL1975 | 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. Read More |
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|
3.75% |
$0 |
- |
Learn More
|
|
|
Chris | Aug 31, 2022 never had a problem moving money in/out. After trying a couple banks with higher rates but less service will be moving my money back here. Read More |
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|
3.75% |
$500 |
- |
Learn More
|
|
|
Rate History: 4.10% → 4.00% → 3.80% → 3.60% → 3.75% |
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|
A Terkowitz | Feb 15, 2024 best bank on the list but no longer the most competitive Read More |
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|
3.75% |
$1,000 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 180 days interest. |
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|
Yat 1965 | Mar 19, 2022 Problem with ties to puppy mills. I closed a cct. https://www.americanbanker.com/news/tab-bank-dragged-into-seedy-world-of-puppy-mill-loans-by-fintech-partner Read More |
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|
3.75% |
$1,000 |
- |
Learn More
|
|
|
Warning: Early withdrawal penalty is 3.00%. |
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|
denied_soft_credit_pull | Jan 10, 2024 Applied for the Joint 5.50% Hi Yield Savings special. (Note: some places reference it is guaranteed for 6 months, other parts of website only guarantee rate for 3 months). We applied and surprising denied ... Read More |
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|
3.65% |
$500 |
- |
Learn More
|
|
|
Rate History: 3.60% → 3.75% → 3.65% → 1.25% → 3.65% |
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|
TJK | 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 |
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|
3.60% |
$1,000 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 180 days interest. |
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|
Rob H. | 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 ... Read More |
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|
3.51% |
$10,000 |
- |
Learn More
|
|
|
Warning: Early withdrawal penalty is 2% of principal |
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|
Hello VirtualBank? | Dec 22, 2018 I know VirtualBank has monitored these comments in the past and answered here. This is important because they do not respond to questions submitted through the website. I am trying to find out the pena... Read More |
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|
3.50% |
$2,500 |
- |
Learn More
|
|
|
Rate History: 3.90% → 3.75% → 3.50% → 3.40% → 3.50% |
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|
AVOID_ READ_CAREFULLY | 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 |
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|
3.50% |
$1,000 |
- |
Learn More
|
|
|
Early withdrawal penalty is one-fourth the amount of interest that would have been earned had CD been held to maturity. |
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|
smithy1968 | Mar 20, 2025 A non-customer-friendly organization that just switches between two contaminated brands trying to bring back some sort of goodwill that it had before it started selling fake foreign currency CDs in 2006 an... Read More |
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|
3.50% |
$0 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 6 months interest. |
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|
NS123 | Mar 15, 2023 Thank you for the reviews above. I was wondering why I was only getting 0.3% when interest rates have gone up. Why CapitalOne360 is putting loyal and long time customers at a disadvantage is beyond me. ... Read More |
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|
3.50% |
$0 |
- |
Learn More
|
|
|
Rate History: 3.90% → 3.60% → 3.50% → 3.40% → 3.50% |
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|
Rad | 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 |
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|
3.50% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 2.27% → 3.95% → 2.27% → 3.50% |
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|
3.50% |
$0 |
- |
Learn More
|
|
|
Rate History: 4.00% → 3.90% → 3.75% → 3.50% |
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|
highstream | 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 |
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|
3.50% |
$500 |
- |
Learn More
|
|
|
Rate History: 4.00% → 3.75% → 3.50% |
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|
Mike Brown | 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 |
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|
3.45% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 3.95% → 3.85% → 3.80% → 3.45% |
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|
george | Feb 9, 2021 The wonderful assistants at Beal Bank are wonderful. Rebeca took great care of me and made sure all my concerns were addressed. Read More |
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|
3.45% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 3.95% → 3.85% → 3.80% → 3.45% |
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|
3.40% |
$2,500 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 180 days interest. |
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|
overdrawn | 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... Read More |
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|
3.35% 0.35% |
$250,000 $1,000 |
- |
Learn More
|
|
|
Rate History: 3.45% → 3.65% → 3.35% |
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|
NORTY FLATZ | Dec 3, 2019 Have done business with "Hope's" San Diego branch for a few years. Always courteous and helpful. Looking forward to doing business with them in the future. Read More |
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|
3.25% |
$0 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 180 days interest. |
||||
|
LenaL | 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... Read More |
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|
3.20% |
$500 |
- |
Learn More
|
|
|
Rate History: 3.20% → 3.35% → 3.20% |
||||
|
3.10% |
$10,000 |
- |
Learn More
|
|
|
Rate History: 2.02% → 2.00% → 3.25% → 3.10% |
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|
Carrandrewb | Aug 5, 2022 The worst customer service during covid. I lost my wallet they were nit understanding when things were shutting down. I knew covid was going to be bad and did not want to be around people. They did nit eve... Read More |
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|
3.00% |
$500 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 30 months interest. |
||||
|
2.85% |
$0 |
- |
Learn More
|
|
|
Early Withdrawal Penalty is 180 days interest. |
||||
|
Jenny Kingston | Jun 10, 2024 I guess customer service is in the US (not sure). I'd rather that someone in the Philippines answered though. These people are so poorly trained and ill informed that I do not trust them with my personal... Read More |
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|
2.75% |
$5,000 |
- |
Learn More
|
|
|
james | 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 |
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|
2.75% |
$500 |
- |
Learn More
|
|
|
Jim S | Dec 21, 2023 Very easy to setup 6 month 5.35% CD from cornerstone account Read More |
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|
2.75% |
$5,000 |
- |
Learn More
|
|
|
Rate History: 3.00% → 2.75% |
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|
Dana E. | Mar 20, 2016 Good solid bank. Read More |
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|
2.53% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 3.05% → 2.53% |
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|
2.32% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 2.27% → 2.32% |
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|
rick | Nov 3, 2023 site does not update at all, totally wrong rates listed Read More |
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|
2.00% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 3.00% → 2.50% → 2.00% |
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|
not perfect but | Apr 25, 2023 with all of these online bank, including the well known ones, delaying transfers forever in order to fund these high rates, this one still executes inbound and outbound transfers immediately. Read More |
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|
2.00% |
$1,000 |
- |
Learn More
|
|
|
J Dally | 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 |
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|
2.00% |
$0 |
- |
Learn More
|
|
|
Rate History: 2.00% → 3.00% → 2.00% → 3.00% → 2.00% |
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|
Stella | Apr 30, 2019 No issues. I feel confident using them. Read More |
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|
2.00% |
$0 |
- |
Learn More
|
|
|
Azoic | Feb 25, 2022 I joined Citi with a Costco-VISA card. An Accelerate followed, and then a checking account. Costco-VISA is necessary for using a credit card at Costco, otherwise cash is necessary. Accelerate Savings w... Read More |
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|
2.00% |
$1,500 |
- |
Learn More
|
|
|
Ryan | Feb 13, 2018 Is it legal to bring someone into the branch and shake them down and threaten them when they want to redeem their CD upon maturity (as opposed to allowing it to automatically renew)? If not, these guys an... Read More |
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|
2.00% |
$10,000 |
- |
Learn More
|
|
|
Rate History: 2.00% → 2.50% → 2.00% |
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|
Hayley7788d@outlook.com | Jan 2, 2023 Terrible customer service by investment side. Fees too high , too full of themselves Read More |
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|
1.85% |
$1,000 |
- |
Learn More
|
|
|
1.77% |
$1,000 |
- |
Learn More
|
|
|
1.75% 1.25% |
$100,000 $2,500 |
- |
Learn More
|
|
|
1.75% |
$1,000 |
- |
Learn More
|
|
|
1.50% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 2.50% → 1.50% |
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|
RYAN S | 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 |
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|
1.40% |
$100,000 |
- |
Learn More
|
|
|
1.40% |
$100,000 |
- |
Learn More
|
|
|
1.39% |
$10,000 |
- |
Learn More
|
|
|
1.31% |
$10,000 |
- |
Learn More
|
|
|
Rate History: 1.51% → 1.31% |
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|
1.30% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 1.05% → 1.30% |
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|
ruler009 | May 26, 2017 Before009 Read More |
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|
1.26% |
$10,000 |
- |
Learn More
|
|
|
1.25% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 2.50% → 1.25% |
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|
Azblondie007 | Feb 24, 2020 I had been with USAA for 20 years. Had my checking, savings, auto and renters insurance and 2 credit cards with them. I work in the service industry and make a good portion of my income in cash tips. For 4... Read More |
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|
1.24% |
$10,000 |
- |
Learn More
|
|
|
1.20% |
$10,000 |
- |
Learn More
|
|
|
1.16% |
$10,000 |
- |
Learn More
|
|
|
1.15% |
$100,000 |
- |
Learn More
|
|
|
1.11% |
$10,000 |
- |
Learn More
|
|
|
1.10% |
$1,000 |
- |
Learn More
|
|
|
1.06% |
$100,000 |
- |
Learn More
|
|
|
1.05% |
$100,000 |
- |
Learn More
|
|
|
1.01% |
$100,000 |
- |
Learn More
|
|
|
scott | Mar 9, 2021 the worst bank I've ever dealt with in my 72 years Read More |
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|
1.01% |
$10,000 |
- |
Learn More
|
|
|
1.01% |
$10,000 |
- |
Learn More
|
|
|
Small Company | Apr 9, 2020 I would stay away from this bank. It was much better run when it was Valley Community Bank, but went into the toilet when it was bought by Bay Commercial Bank. Their online banking terms and conditions cha... Read More |
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|
1.00% |
$10,000 |
- |
Learn More
|
|
|
1.00% |
$100,000 |
- |
Learn More
|
|
|
maris | Mar 2, 2019 does require us citizenship? Read More |
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|
1.00% |
$10,000 |
- |
Learn More
|
|
|
1.00% |
$10,000 |
- |
Learn More
|
|
|
1.00% |
$100,000 |
- |
Learn More
|
|
|
0.99% |
$100,000 |
- |
Learn More
|
|
|
0.90% |
$10,000 |
- |
Learn More
|
|
|
0.90% |
$10,000 |
- |
Learn More
|
|
|
0.90% |
$10,000 |
- |
Learn More
|
|
|
0.90% |
$10,000 |
- |
Learn More
|
|
|
0.89% |
$10,000 |
- |
Learn More
|
|
|
0.85% |
$100,000 |
- |
Learn More
|
|
|
0.85% |
$10,000 |
- |
Learn More
|
|
|
0.80% |
$10,000 |
- |
Learn More
|
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|
0.80% |
$10,000 |
- |
Learn More
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|
0.80% |
$10,000 |
- |
Learn More
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|
0.80% |
$10,000 |
- |
Learn More
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|
0.80% |
$10,000 |
- |
Learn More
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|
0.80% |
$10,000 |
- |
Learn More
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|
0.75% |
$10,000 |
- |
Learn More
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|
|
0.75% |
$100 |
- |
Learn More
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|
0.75% |
$100,000 |
- |
Learn More
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|
|
0.75% |
$100,000 |
- |
Learn More
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|
|
kristinalouise | Dec 6, 2018 I have to say, as a local business owner, I purposefully chose to work with a 'local business bank'. I moved my checking over when I incorporated and assumed that I would go to them when my needs increased... Read More |
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0.75% |
$100,000 |
- |
Learn More
|
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|
0.75% |
$10,000 |
- |
Learn More
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0.75% |
$10,000 |
- |
Learn More
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|
0.75% |
$100,000 |
- |
Learn More
|
|
|
0.75% |
$1,000 |
- |
Learn More
|
|
|
Rate History: 0.25% → 4.32% → 0.75% → 3.03% → 0.75% |
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|
nonsense | May 21, 2021 avoid this Read More |
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|
0.70% |
$10,000 |
- |
Learn More
|
|
|
kristinalouise | Dec 6, 2018 I have to say, as a local business owner, I purposefully chose to work with a 'local business bank'. I moved my checking over when I incorporated and assumed that I would go to them when my needs increased... Read More |
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0.65% |
$10,000 |
- |
Learn More
|
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|
RHG | Jan 29, 2019 The Bank does not have this product. Read More |
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|
0.65% |
$10,000 |
- |
Learn More
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scott | Mar 9, 2021 the worst bank I've ever dealt with in my 72 years Read More |
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0.65% |
$100,000 |
- |
Learn More
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0.60% |
$10,000 |
- |
Learn More
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0.60% |
$100,000 |
- |
Learn More
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0.60% |
$10,000 |
- |
Learn More
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BENNIE BROOKS | Mar 25, 2015 OLIVER NORTH AIR LINES GOVERNOR BLANCO Read More |
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|
0.55% |
$100,000 |
- |
Learn More
|
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|
laberta ewing | Mar 17, 2015 I called this bank to start a CD and was told needed $250,000 to get the offered rate??? The page shows $10,000 as a minimum amount. Very False advertising and a waste of time for many. Read More |
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0.55% |
$100,000 |
- |
Learn More
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0.55% |
$10,000 |
- |
Learn More
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|
0.55% |
$0 |
- |
Learn More
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Thomas DeMauro | Aug 28, 2022 Rates are totally uncompetitive now. Read More |
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|
0.50% |
$1,000 |
- |
Learn More
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RTN1949 | Jun 2, 2022 I've been a customer since CIT emerged from the financial crisis as a real competitor in this space (14 years or so). Zero complaints about anything over this time ... until today. Now they are offering a... Read More |
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0.50% |
$10,000 |
- |
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0.50% |
$10,000 |
- |
Learn More
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0.50% |
$1,000 |
- |
Learn More
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sharzns | Jun 17, 2022 Midfirst doesn't seem to encourage any accounts other than checking. I have two. I've tried opening others, but they talk me out of it every single time. Read More |
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0.50% |
$10,000 |
- |
Learn More
|
|
|
0.50% |
$1,000 |
- |
Learn More
|
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|
0.50% |
$10,000 |
- |
Learn More
|
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|
Harry Reese | Jul 22, 2015 Fix your automated system so I can find information after you close Read More |
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0.50% |
$100,000 |
- |
Learn More
|
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|
0.50% |
$100,000 |
- |
Learn More
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|
0.48% |
$10,000 |
- |
Learn More
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|
0.47% |
$100,000 |
- |
Learn More
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|
0.45% |
$10,000 |
- |
Learn More
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|
0.45% |
$10,000 |
- |
Learn More
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|
0.45% |
$10,000 |
- |
Learn More
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0.45% |
$10,000 |
- |
Learn More
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0.45% |
$10,000 |
- |
Learn More
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0.45% |
$100,000 |
- |
Learn More
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|
0.45% |
$10,000 |
- |
Learn More
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0.40% |
$10,000 |
- |
Learn More
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0.40% |
$10,000 |
- |
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0.40% |
$10,000 |
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Michael strubert | Jun 8, 2021 Someone from Beneficial State Bank tried to cash a fraudulent check on my EECU account for $469.99. On 6/1/21. Read More |
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0.40% |
$50,000 |
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0.40% 0.25% |
$1,000 $500 |
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Ugg | Jun 12, 2023 US Bank reported me to dult Protective Services because my husband is 85 and I am63. He got sick and went into a nursing hime for 3 months. My husband always handled the financial affairs. I had to take ov... Read More |
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0.35% |
$10,000 |
- |
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laberta ewing | Mar 17, 2015 I called this bank to start a CD and was told needed $250,000 to get the offered rate??? The page shows $10,000 as a minimum amount. Very False advertising and a waste of time for many. Read More |
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0.35% |
$10,000 |
- |
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0.30% |
$10,000 |
- |
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0.30% |
$10,000 |
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Bauhinia C | Mar 15, 2023 Oh Natty natty natty, haha the fact you need to take out (probably a second) loan for $160,000 on a $625,000 sends up all kinds of red flags. The bank was right to run away from YOU dear hahaha. Read More |
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0.27% |
$10,000 |
- |
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0.25% |
$10,000 |
- |
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0.25% |
$2,500 |
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dbestway@gmail.com | 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... Read More |
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0.25% |
$10,000 |
- |
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UtahJazz1 | 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 |
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0.20% |
$1,000 |
- |
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wertlkgt | Mar 28, 2022 Vaporware. Was approved to open an account. I logged in on several different browsers with differing rendering codes--each time got nothing but 3 circles running left to right for up to a half hour when I ... Read More |
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0.20% |
$1 |
- |
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Cory,Baldwin | Oct 18, 2016 IF the Cd's our that high then way i'm i the last to find out what The apys are. Read More |
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0.15% |
$500 |
- |
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Rate History: 0.15% → 0.01% → 0.15% |
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0.15% 0.10% |
$1 $0 |
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Austin | Aug 25, 2021 I have banked with Umpqua in Gig Harbor since 2013 and although there money market rates are not good didn’t have much problem until I moved to Spokane and started using this branch on south hill. They ... Read More |
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0.15% |
$10,000 |
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0.15% |
$500 |
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MrBond | 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 |
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0.10% |
$10,000 |
- |
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0.05% |
$2,500 |
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Rate History: 0.03% → 0.05% |
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Seeko | Mar 28, 2023 On line banking gives a confirmation number when paying bills. But it doesn’t confirm that the bill will be paid only that they have the information. Ridiculous. Read More |
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0.03% |
$25,000 |
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GAM | May 18, 2019 Had checking and savings for years when living in Philly. Went into PNC 2.35 APY high yield savings. They have thus far maintained rate. Easy web site and great customer phone service. Still maintain check... Read More |
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0.03% |
$100,000 |
- |
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Treasure | Jul 24, 2023 BOFA is a den of people thieves camouflaged as bank operatives. There’s a soon to be uncovered carrel of money laundry there. They took all my money and don’t want to release it to me for no particular... Read More |
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0.00% |
$10,000 |
- |
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BestCashCow strives to maintain the most accurate rates. If you believe a rate is not accurate, please let us know.
Five-year CDs are the big kahuna of the CD world. While banks may offer six-year, seven-year, or even 10-year CDs, the five-year is the longest of the most commonly offered terms. The 5-year CD is therefore often the highest offer at your local bank. Therefore, the temptation for those looking for yield is to open one, deposit money, and forget about it for five years. This could be a mistake. In rising rate environments a five-year CD may not be a good investment.
Like every other CD term, five year CDs from FDIC insured banks are protected up to FDIC limits (generally $250,000 per account holder per bank). If your deposit is over the FDIC limit then you may not receive the uninsured money in case of a bank failure.
The principle threat to a a five year CD is inflation. If the CD is opened in a low rate environment, and rates and inflation subsequently rise, then inflation will erode the value of the certificate of deposit over its five years. For example, if a depositor opened a five year CD in year 1 with a yield of 2.05% APY and inflation at 1.5%, then the real return is .55 percentage points. But if inflation rises the next year to 2.5% and stays there for the next four years, then the CD in real terms is losing money every year: 2.05% - 2.5% = -.45%.
While it is impossible for anyone to predict too far into the future, savers should be cognizant of the economic environment before locking up money for a five year time-period. Our rate analysis page provides some insight into where we think rates will go.
On the other hand, if rates are falling and will continue to do so for some time due to an economic recession then it makes sense to lock in a higher rate with a five year CD. Savers who opened five year CDs in 2008 immediately after the financial crisis were able to lock in rates in the 6% range, a great move considering two years later a five year CD paid below 3%.
Five-year CDs currently pay about 1.00% more in interest than a one year CD. In general, CDs of this duration are best opened as part of a laddered CD portfolio or if the depositor thinks that rates will either stagnate or drop over the next couple of years.
Opening a five year CD in a branch is relatively easy and similar to every other CD term. Most banks require the customer be a resident of the United States and most branch-based banks ask that the account be opened in the bank. Funding can be performed by transferring money that is already located at that bank or by check or ACH transfer from another bank. The CD can be opened that day and the rate locked.
With longer term CDs, savers should make sure they put a record of the CD in a safe place and that if they move, they forward their new address to the bank. In cases where the bank cannot find the CD holder, the bank may hand the funds over to a state authority as a lost deposit, and it will require onerous paperwork to reclaim the money.
All banks listed on BestCashCow are FDIC insured; BestCashCow.com 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.
Find out how much extra money you can earn by moving your bank money into an account that pays more.
Use or Change these Amounts And Rates