Best 10-Year CD Rates
10-year CDs offer a guaranteed rate of return over 120 months, but you’ll pay a penalty if you withdraw your money early. Here are the five best options on the market.
Written by
Luke Daugherty
Luke Daugherty is a freelance writer, editor, and former operations manager. He covers personal finance, operations, marketing, and sustainable business, as well as many of his personal passions. His work, bylined and ghostwritten, has appeared in The Balance, CNET, CIO Magazine, Entrepreneur, and more.
Last Update on Jan 10, 2024
Table of Contents
Certificates of deposit (CDs) are often a go-to investment for risk-free, guaranteed short-term returns over a few months or a few years. However, 10-year CDs can be a good place to stash your money for a fixed return over a longer period.
The best 10-year CDs offer above-market yields, small minimum deposit requirements, and other features to bolster your return. These 120-month savings products are less common than some shorter-range options, but we’ve sorted through some of the top choices for you to find our three favorites.
The 3 Best 10-Year CD Rates of 2024
Discover Certificates of Deposit
Fees
No opening or maintenance fees
Interest Compounding
Compounds daily
Bank Rating
One of the top online banks
120-Month APY
3.80%
Minimum Deposit
$2,500
Interest Compounded
Daily
Early withdrawal penalty
24 months simple interest
Show More Details
Why We Picked It?
Discover Bank offers one of the largest sets of CD products, with terms ranging from three months to 10 years. Its 10-year CD rates are currently slightly lower than some of its shorter-term options, but its 3.80% APY is one of the best you can find for a 120-month term. Discover offers a highly rated digital banking experience for modern-day savers, but its high $2,500 minimum deposit may be too much for some consumers.
Pros:
- Excellent 10-year APY
- No opening or maintenance fees
- One of the top online banks
Cons:
- Early withdrawal penalty of 24 months interest
- High minimum deposit
- APY is lower than Discover’s 3-year and 5-year CDs
Additional Details
- Discover offers a top-rated digital banking experience
- Interest compounds daily
- Nine-day grace period after account reaches maturity, during which you can add funds, change terms, or close the account
EmigrantDirect Certificate of Deposit
Minimum Deposit for 10-year CD
Low
Interest Withdrawal
Can withdraw interest at any time
Interest Compounding
Compounded daily and paid monthly
120-Month APY
2.75%
Minimum Deposit
$1,000
Interest Compounded
Daily
Early withdrawal penalty
180 days interest
Show More Details
Why We Picked It?
Emigrant Bank, a New York savings institution, originally opened its doors in 1850. Its online division, EmigrantDirect, offers various digital savings products, including CDs ranging from six months to 10 years. Its 10-year CD rate isn’t as high as some competitors, but it’s competitive and offers a low minimum deposit. This is a great option for small savers who want a guaranteed return from a long-trusted institution.
Pros:
- Relatively competitive APY
- Low minimum deposit for 10-year CD
- Withdraw interest at any time
Cons:
- Early withdrawal penalty of 180 days of interest
- American Dream Savings Account required to open a CD
- APY isn’t higher than some of EmigrantDirect’s shorter CD terms
Additional Details
- Emigrant Bank has been in business since 1850
- Interest compounded daily and paid monthly
- 10-day grace period after account matures, during which you can add money, adjust terms, or close the account
MySavingsDirect Certificate of Deposit
APY
Above-average
Interest Withdrawal
Can withdraw interest at any time
Interest Compounding
Compounded daily and paid monthly
120-Month APY
2.00%
Minimum Deposit
$1,000
Interest Compounded
Daily
Early withdrawal penalty
180 days interest
Show More Details
Why We Picked It?
EmigrantDirect isn’t the only online division of Emigrant Bank. Consumers can also access the bank’s CD accounts with MySavingsDirect, which offers similar CDs and terms, albeit with a slightly lower APY. If you’re willing to open a savings account with MySavingsDirect this low-minimum-deposit 10-year CD may be a great option.
Pros:
- Above-average APY
- Low minimum deposit requirement
- Withdraw interest at any time
Cons:
- Early withdrawal penalty of 180 days of interest
- MySavings Account required to open a CD
- 10-year APY isn’t higher than 5-year APY
Additional Details
- MySavingsDirect is another online division of Emigrant Bank
- Interest compounded daily and paid monthly
- 10-day grace period after account matures, during which you can add money, adjust terms, or close the account
10-Year CD Basics
A 10-year CD is a type of savings account. However, unlike traditional savings or money market accounts, a 10-year CD pays a fixed interest rate over a term of 120 months. At the end of that term, your account reaches maturity, and you can withdraw your funds or roll them into a new CD.
Because the account pays a set rate, you can’t add additional funds after opening your account. Typically, if you withdraw your original deposit before the term ends, you’ll pay a penalty.
Understanding 10-Year CD Operations
When you open a 10-year CD, you agree to leave your money in the bank for 120 months in exchange for a guaranteed rate of return. You’ll agree to the bank’s current interest rate when you make your initial deposit. For most CDs, interest compounds daily or monthly, so you’ll earn interest on interest as the account grows. However, some CDs pay a simple rate on the initial deposit only.
If you withdraw your initial deposit, you’ll pay a penalty, which is usually equal to a few months or years of interest earned on the account. Some CDs allow you to withdraw interest without paying a penalty, as long as you leave the principal intact.
Once the account reaches maturity, you can usually withdraw your funds and earnings or add to the balance and roll it into a new CD.
10-Year CD Rate Trend
As savings deposit accounts, CD rates are closely tied to the federal funds rate, the Federal Reserve’s target lending rate for commercial banks. Because of aggressive Fed rate hikes since early 2022, CD rates have risen quickly over the same timeframe.
Although the Federal Deposit Insurance Corporation (FDIC) doesn’t publish rates for 10-year CDs, these rates are typically similar to rates for 5-year CDs. Since their low point of 0.24% in November 2021, average 5-year CD rates have risen steadily, reaching as high as 1.41% in August of 2023 before dipping slightly.
With the Fed signaling that it will likely raise rates again to continue fighting inflation late in 2023, rates on 5-year and 10-year CDs are likely to climb even more before the year ends.
Pros and Cons of Investing in 10-Year CDs
Although CDs offer predictable, low-risk returns, they’re not always the best choice for investors. Here are some of the biggest pros and cons to consider before opening a 10-year CD.
Pros
- Guaranteed yield
- Often better rates than savings and money market accounts
- FDIC insured
- 10-year CDs often have better returns than very short-term accounts
Cons
- Funds locked up for 120 months
- Expensive penalties for early withdrawals
- May get better yields on 1-year, 2-year, or 3-year CDs
Short-term vs. long-term CDs
Certificates of deposit are available in a variety of term lengths, ranging from one month to 10 years. You can usually expect the best rates from 12-month or 24-month CDs, but returns vary depending on Fed actions and other market conditions.
If you opt for CDs with terms of less than one year, you’ll typically earn a much lower rate since the bank doesn’t keep your money for as long. However, many banks offer short-term promotional CDS with higher rates. For CDs of five years or more, you’ll usually see lower rates than on one-year or two-year accounts, but you can leverage compounding interest over a much longer period.
To decide on the right CD term for you, consider how long you can live without the money you invest. You should also weigh your general investing goals and consider where CDs fit within the big picture.
Comparing Different CDs
As you begin shopping for CDs, it’s helpful to start with current national averages. As of September 2023, 5-year CDs averaged an APY of 1.38%, and 10-year CDs offer similar yields, so anything higher will offer above-average returns. For 120-month terms with higher balances, it’s also especially important to make sure the account offers compounding interest.
However, APY isn’t the only important consideration. For instance, banks may differ significantly when it comes to minimum deposits, and those with high deposit requirements may be out of reach for you. Consider early withdrawal penalties and the option to withdraw interest, too. Ideally, you won’t have to touch your principal, but you should be comfortable with the potential penalty if you need to make an emergency withdrawal.
Brokered CDs are another option to consider alongside traditional bank CDs. These accounts often offer a higher APY and allow you to sell them on the secondary market — a huge plus if you need the funds sooner rather than later. However, keep in mind that the brokerage may be able to redeem the CD before it matures, and you might have to pay intermediary fees.
Steps To Open A 10-Year CD
Opening a CD is usually similar to opening a bank account:
- Compare 10-year CD options and select an account.
- Add funds to meet the minimum deposit or more.
- Sign the agreement, which will set terms such as APY, maturity date, and more.
In some cases, you may have to open a basic checking or savings account with the bank before you can open a CD.
Alternatives To 10-Year CDs
CDs aren’t the only accounts that offer strong returns on your deposits. Nowadays, many online, high-yield savings accounts offer higher APYs than 10-year CDs, and you don’t have to lock up your funds to get these returns. Some banks even offer high-yield checking accounts with decent APYs. These usually won’t be as high as the yield on a 10-year CD, but you can add or remove money anytime.
Series I savings bonds, also known as I bonds, are another short-term savings tool worth considering. I bonds combine fixed and inflation-adjusted rates, which adjust every six months to help you compete with the current inflation rate. They’re often one of the best ways to keep pace with inflation, and you can buy up to $10,000 in I bonds in a calendar year. However, many CDs currently outperform I bonds, which are set at 4.30% as of September 2023.
Frequently Asked Questions (FAQs)
Is A 10-Year CD Worth It?
A 10-year CD offers a low-risk way to earn a guaranteed return on your deposit. If you’re confident you won’t need access to the money for 120 months, it can be a smart investing choice. However, many CDs with shorter terms currently offer higher yields, so it may be wise to consider these options.
What’s The Best Interest Rate On A 10-Year CD?
Although the average APY on 5-year and 10-year CDs currently sits around 1.37%, some accounts offer much higher returns. The best 10-year CDs we reviewed boast APYs between 2.00% and 4.00%.
How High Will 10-Year CD Rates Go?
It’s impossible to predict how much higher 10-year CD rates might go in 2024, but they are likely to continue rising as long as the Fed continues to raise its benchmark rate.
Is CD Interest Taxed?
CD interest is taxed as ordinary income on your annual tax returns, and you’ll receive a 1099-INT from the bank at the end of the year. For CDs that mature in the same year they’re opened, you’ll report all interest at once. For long-term CDs, you’ll report the income incrementally as you accrue interest each year.
Luke Daugherty
Author
Luke Daugherty is a freelance writer, editor, and former operations manager. He covers personal finance, operations, marketing, and sustainable business, as well as many of his personal passions. His work, bylined and ghostwritten, has appeared in The Balance, CNET, CIO Magazine, Entrepreneur, and more.
More from CDs
