Colorado

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Colorado CD Rates – 5-Year

You are viewing rates from banks across Colorado





Below are 5-year CD Rates from banks that are located in Colorado. 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.

CO - July 30, 2025

5 Year CD National Average : 0.92% ?

Banks APY MIN MILES ?

Early Withdrawal Penalty is 730 days interest.
Rate History: 4.10% → 4.20% → 4.15% → 4.05% → 4.20%

| 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: 4.00% → 4.15%

| 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

Warning: Early Withdrawal Penalty is 2% of the account balance.
Rate History: 4.20% → 4.15% → 4.10% → 3.95% → 4.05%

| Jul 3, 2023

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

Early withdrawal penalty is 365 days interest.
Rate History: 3.90% → 3.80% → 3.50% → 3.90% → 4.00%

| Jul 4, 2025

Bread's current 6-month CD is 4.45%, not 4.35%. Read More

Rate History: 3.05% → 3.50% → 4.11% → 4.00%

| 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 90 days interest.
Rate History: 4.00% → 3.75% → 3.25% → 3.75% → 4.00%

| 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

Early Withdrawal Penalty is 360 days interest.
Rate History: 4.24% → 4.09% → 3.67% → 3.65% → 3.97%

| Jan 30, 2024

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

Early Withdrawal Penalty is 90 days interest.
Rate History: 3.00% → 4.11%

| Jul 1, 2022

Very easy opening process and wonderful staff. Read More

Early Withdrawal Penalty is 6 Months' Interest.
Rate History: 4.35% → 4.00% → 3.80%

| 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

Rate History: 4.00% → 3.85% → 3.75% → 3.80%

| 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

| 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

Rate History: 4.10% → 4.00% → 3.80% → 3.60% → 3.75%

| Feb 15, 2024

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

Early Withdrawal Penalty is 180 days interest.
Rate History: 4.00% → 3.75% → 3.25% → 3.81% → 3.75%

| 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

Rate History: 3.60% → 3.75% → 3.65% → 1.25% → 3.65%

| 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 180 days interest.
Rate History: 4.50% → 4.15% → 4.00% → 3.75% → 3.60%

| 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

Warning: Early withdrawal penalty is 2% of principal

| 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

Rate History: 3.90% → 3.75% → 3.50% → 3.40% → 3.50%

| 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

Early withdrawal penalty is one-fourth the amount of interest that would have been earned had CD been held to maturity.
Rate History: 4.00% → 3.90% → 3.65% → 3.45% → 3.50%

| 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

Early Withdrawal Penalty is 6 months interest.
Rate History: 4.05% → 4.05% → 3.90% → 3.75% → 3.50%

| 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

Rate History: 3.90% → 3.60% → 3.50% → 3.40% → 3.50%

| 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: 4.00% → 3.90% → 3.75% → 3.50%

| 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

Rate History: 4.00% → 3.75% → 3.50%

| 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

Rate History: 3.95% → 3.85% → 3.80% → 3.45%

| 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

Early Withdrawal Penalty is 180 days interest.
Rate History: 4.00% → 4.00% → 3.40%

| 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

Rate History: 3.45% → 3.65% → 3.35%

| 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

Rate History: 2.90% → 3.30%

| Oct 11, 2020

You probably thought - as did I - that you were looking at a site that belongs to and was the responsibility of Gateway First. After all it includes their headings, selected financial statements, many pag... Read More

Early Withdrawal Penalty is 180 days interest.
Rate History: 4.15% → 3.75% → 3.50% → 3.75% → 3.25%

| 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

Rate History: 2.02% → 2.00% → 3.25% → 3.10%

| 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

Early Withdrawal Penalty is 30 months interest.
Rate History: 3.50% → 3.00% → 2.50% → 3.00%

Early Withdrawal Penalty is 180 days interest.
Rate History: 4.10% → 4.00% → 3.90% → 3.60% → 2.85%

| 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

| 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

| Dec 21, 2023

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

Rate History: 3.00% → 2.75%

| Mar 20, 2016

Good solid bank. Read More

Rate History: 3.05% → 2.53%

Rate History: 2.27% → 2.32%

| Nov 3, 2023

site does not update at all, totally wrong rates listed Read More

Rate History: 3.00% → 2.50% → 2.00%

| 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

| 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: 2.00% → 3.00% → 2.00% → 3.00% → 2.00%

| Apr 30, 2019

No issues. I feel confident using them. Read More

| 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

Rate History: 2.00% → 2.50% → 2.00%

| Jan 2, 2023

Terrible customer service by investment side. Fees too high , too full of themselves Read More

1.75%

$100,000

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| May 29, 2020

Dua Read More

1.53%

$10,000

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1.51%

$100,000

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Rate History: 2.50% → 1.50%

| 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

1.41%

$10,000

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1.41%

$100,000

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1.38%

$100,000

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1.35%

$10,000

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Rate History: 1.05% → 1.30%

| May 26, 2017

Before009 Read More

1.26%

$10,000

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1.26%

$500

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1.26%

$10,000

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Rate History: 2.50% → 1.25%

| 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

| Sep 21, 2020

I am fed up with how poorly this bank is run. I have made deposit and given a receipt with the wrong amount more than once. I have received other customer's cancelled checks. The online bank site is a mess... Read More

1.25%

$100,000

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1.20%

$1,000

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1.20%

$10,000

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1.20%

$10,000

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1.16%

$10,000

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1.16%

$10,000

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1.16%

$10,000

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1.16%

$10,000

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1.15%

$10,000

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1.15%

$10,000

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1.10%

$10,000

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1.05%

$10,000

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1.01%

$10,000

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| 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

| Nov 4, 2021

Not a very helpful bank. Find another ! Read More

1.00%

$10,000

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1.00%

$100,000

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1.00%

$10,000

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1.00%

$10,000

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1.00%

$10,000

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1.00%

$10,000

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1.00%

$100,000

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0.95%

$10,000

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0.95%

$10,000

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0.95%

$100,000

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0.95%

$10,000

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0.95%

$100,000

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0.90%

$10,000

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0.90%

$10,000

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0.90%

$10,000

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0.90%

$10,000

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0.90%

$100,000

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0.90%

$100,000

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0.85%

$10,000

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| Jul 1, 2021

What day of the month do you report to the credit bureaus Read More

0.85%

$10,000

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0.85%

$10,000

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0.80%

$10,000

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0.80%

$10,000

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| Sep 10, 2019

215,000.00 Read More

0.80%

$10,000

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| Feb 4, 2020

Academy was great helping me open a new account Read More

0.75%

$10,000

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0.75%

$10,000

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0.75%

$10,000

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0.75%

$10,000

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Rate History: 0.25% → 4.32% → 0.75% → 3.03% → 0.75%

| May 21, 2021

avoid this Read More

0.70%

$10,000

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0.65%

$1,000

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0.60%

$100,000

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0.60%

$10,000

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| Mar 25, 2015

OLIVER NORTH AIR LINES GOVERNOR BLANCO Read More

0.60%

$10,000

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0.55%

$10,000

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0.55%

$100,000

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| Aug 28, 2022

Rates are totally uncompetitive now. Read More

0.50%

$10,000

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| 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

0.50%

$10,000

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0.50%

$10,000

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| 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

| Dec 11, 2023

only series EE currently. I have I series and have to mail them in Read More

| 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

| Nov 9, 2023

Unhappy with ATM on Southside. I.bank with wafd they closed. Told wsfd customers can get cash with card. Employees are very nosy with slanderous gossip. I'm treated like a criminal. That why I don't use i... Read More

| Jun 1, 2020

UMB does not honor the rate posted here! Read More

| Nov 9, 2023

Unhappy with ATM on Southside. I.bank with wafd they closed. Told wsfd customers can get cash with card. Employees are very nosy with slanderous gossip. I'm treated like a criminal. That why I don't use i... 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... Read More

| 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

| 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

Rate History: 0.15% → 0.01% → 0.15%

| 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

0.12%

$500

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Rate History: 0.03% → 0.05%

| 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

0.05%

$10,000

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| 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

| 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

0.01%

$10,000

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All rates listed are Annual Percentage Yield (APY). The Min listed is the minimum deposit account balance required to obtain the rate listed.

Branches Info around zip 10007


Branch Street City State
Beal Bank USA
Denver Branch
154 Steele Street Denver CO
FirstBank
Frisco Branch
960 N.Ten Mile Drive Frisco CO
Zions Bank
Durango Downtown Branch
890 Camino Del Rio Durango CO
JPMorgan Chase Bank, National Association
Coal Mine & Kipling Banking Center B Branch
9859 West Coal Mine Avenue Littleton CO
High Country Bank
High Country Bank Branch
7360 West Us Highway 50 Salida CO
BOKF, National Association
Highlands Ranch Branch
9561 S. University Blvd Highlands Ranch CO
Champion Bank
Champion Bank Branch
16790 Centre Court Parker CO
Century Savings and Loan Association
Century Savings And Loan Association Branch
233 East Main St Trinidad CO
Century Savings and Loan Association
Century Savings And Loan Association Branch
233 East Main St Trinidad CO
First Pioneer National Bank
Holyoke Branch
150 South Interocean Street Holyoke CO
First National Bank, Cortez
First National Bank, Cortez Branch
2258 E. Main Street Cortez CO
NBH Bank
Nbh Bank Branch
Wapiti Ave Rifle CO
Gunnison Savings and Loan Association
Crested Butte Branch
501 Elk Ave Crested Butte CO
Park State Bank & Trust
Park State Bank & Trust Branch
710 W Hwy 24 Woodland Park CO
Golden Belt Bank, FSA
Fort Morgan Br Branch
321 Ensign Street Fort Morgan CO
Four Corners Community Bank
Cortez Branch
343 E. Main St. Cortez CO
FMS Bank
Fms Bank Branch
520 Sherman Street Fort Morgan CO
First National Bank
Arapahoe Bank And Trust Branch
7777 East Arapahoe Road Englewood CO
First Southwest Bank
First Southwest Bank Branch
720 Main Street Alamosa CO
First National Bank, Cortez
First National Bank, Cortez Branch
2258 E. Main Street Cortez CO
First Pioneer National Bank
Holyoke Branch
150 South Interocean Street Holyoke CO
Equitable Savings and Loan Association
Limon Branch
888 Main Street Limon CO
Yampa Valley Bank
Yampa Valley Bank Branch
600 South Lincoln Avenue Steamboat Springs CO
First Western Trust Bank
Dtc Cherry Hills Branch
6501 East Belleview Avenue, Suite 200 Englewood CO
Points West Community Bank
Good Samaritan Branch
805 Compassion Drive Windsor CO
FMS Bank
Fms Bank Branch
520 Sherman Street Fort Morgan CO
The State Bank
Falcon Branch
7495 Mclaughlin Road Peyton CO
Mountain Valley Bank
Mountain Valley Bank Branch
461 Main Walden CO
Farmers State Bank of Calhan
Falcon Branch
Meridian Road & Sthy 24 Peyton CO
The Pueblo Bank and Trust Company
Drive-In Facility Branch
Sixth Street And Grand Avenue Pueblo CO
Del Norte Bank
Del Norte Bank Branch
705 Grand Avenue Del Norte CO
CoreFirst Bank & Trust
Corefirst - Vallagio Branch
10130 E. Dry Creek Road Englewood CO
Points West Community Bank
Good Samaritan Branch
805 Compassion Drive Windsor CO
MNB BANK
Burlington Colorado Branch
17999 Us Highway 385 Burlington CO
North Valley Bank
North Valley Bank Branch
9001 North Washington Street Thornton CO
The Dolores State Bank
Mancos Valley Bank - Cortez Location Branch
27780 Hwy 160 Cortez CO
GNBank, National Association
Valley State Bank Branch
204 South Fourth St Lamar CO
The Dolores State Bank
Mancos Valley Bank - Cortez Location Branch
27780 Hwy 160 Cortez CO
San Luis Valley Federal Bank
San Luis Valley Federal Bank Branch
401 Edison Avenue Alamosa CO
The Gunnison Bank and Trust Company
Crested Butte Branch
6th And Gothic Crested Butte CO
FNB Bank
Kirk Branch
2988 County Road M Kirk CO
High Country Bank
High Country Bank Branch
7360 West Us Highway 50 Salida CO
Del Norte Bank
Del Norte Bank Branch
705 Grand Avenue Del Norte CO
Home Loan State Bank
Home Loan State Bank Branch
205 N. 4th Street Grand Junction CO
Integrity Bank & Trust
Powers Center Point Branch
5550 Powers Center Point Colorado Springs CO
Rocky Mountain Bank & Trust
Cheyenne Meadows Branch
755 Cheyenne Meadows Colorado Springs CO
RNB STATE BANK
Rawlins National Bank - Longmont Bra Branch
2001 North Main Street Longmont CO
Stockmens Bank
Stockmens Bank Branch
25 N. Cascade Avenue Colorado Springs CO
Herring Bank
Colorado National Bank Branch
3110 North Nevada Avenue Colorado Springs CO
San Luis Valley Federal Bank
San Luis Valley Federal Bank Branch
401 Edison Avenue Alamosa CO
Adams Bank & Trust
Firestone Branch
8308 Colorado Blvd Firestone CO
Rocky Mountain Bank & Trust
Cheyenne Meadows Branch
755 Cheyenne Meadows Colorado Springs CO
Grand Valley Bank
925 N. 7th Street Branch
925 North 7th Street Grand Junction CO
Farmers Bank
Farmers Bank Branch
119 First Street Ault CO
RNB STATE BANK
Rawlins National Bank - Longmont Bra Branch
2001 North Main Street Longmont CO
Academy Bank, National Association
Downtown Colo Sprs Main Branch
One South Tejon Street Colorado Springs CO
FirstOak Bank
Firstoak Bank-Pueblo Branch
1419 W Us Highway 50 Pueblo CO
5Star Bank
5star Bank Branch
Peterson Air Force Base, 455 W. Paine St., Bldg. 1485 Colorado Springs CO
Waypoint Bank
Mountain View Branch
24 South Weber Street Suite 151 Colorado Springs CO
The Farmers State Bank of Brush
Drive-In Facility Branch
205 Carson Street Brush CO
Redstone Bank
Redstone Bank Branch
15765 East Arapahoe Road Centennial CO
Timberline Bank
Montrose Branch
Oxbow Drive Montrose CO
Native American Bank, National Association
Native American Bank, National Association Branch
999 18th Street Denver CO
First National Bank
Arapahoe Bank And Trust Branch
7777 East Arapahoe Road Englewood CO
Armed Forces Bank, National Association
Fort Carson Facility Branch
6384 Wetzel Avenue, Building 1512 Fort Carson CO
First National Bank Colorado
Monument Branch
581 Highway 105 Monument CO
Native American Bank, National Association
Native American Bank, National Association Branch
999 18th Street Denver CO
Frontier Bank
Springfield Branch
808 Main Street Springfield CO
Frontier Bank
Springfield Branch
808 Main Street Springfield CO
ANB Bank
Fort Collins Branch
2108 Milestone Drive Fort Collins CO
Liberty Savings Bank, F.S.B.
Granby Branch
91 E. Agate Granby CO
MidFirst Bank
Kent Denver Br Branch
4000 E. Quincy Ave Englewood CO
Glacier Bank
Hot Springs Boulevard Branch
305 Hot Springs Boulevard Pagosa Springs CO
U.S. Bank National Association
Denver Federal Center Branch
One Denver Federal Center Building 41 Lobby Denver CO
InBank
North Convent Branch
320 North Convent St Trinidad CO
UMB Bank, National Association
Highlands Banking Center Branch
8190 South University Boulevard Littleton CO
InBank
North Convent Branch
320 North Convent St Trinidad CO
U.S. Bank National Association
Denver Federal Center Branch
One Denver Federal Center Building 41 Lobby Denver CO
First-Citizens Bank & Trust Company
Fort Collins Branch
2420 E Harmony Rd Fort Collins CO
First National Bank of Omaha
Csu Branch
1101 Central Avenue Mall Fort Collins CO
KeyBank National Association
Governor's Plaza Branch
9900 West Belleview Avenue Littleton CO
FNB Bank
Kirk Branch
2988 County Road M Kirk CO
Bank of America, National Association
Cherry Creek Branch
100 Filmore Street, Suite 100 Denver CO
Evergreen National Bank
Georgetown Branch
502 Sixth Street Georgetown CO


BestCashCow strives to maintain the most accurate rates. If you believe a rate is not accurate, please let us know.

PRODUCT INFORMATION

Five Year CDs - Branch Banks 2025

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.

Safety

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.

Inflation

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%.

Interest

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

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.

ADVANTAGES AND DISADVANTAGES OF FIVE YEAR CDs

Advantages of five year CDs

  • 5 year CDs provide the highest rate of the common CD terms.
  • The return is fixed for five years, which is an advantage in a flat or falling rate environment.

Disadvantages of five year CDs

  • The money is locked away for five years and cannot be withdrawn without a substantial penalty.
  • In a rising rate environment, inflation will reduce the value of the money in the CD over time.
  • Branch CDs require the saver to visit a branch and be subjected to cross-sell pitches and other marketing tactics.

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

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