The Best CD Rates 2024
As the Federal Reserve has continued to raise interest rates, those looking for a secure place to park their money can score big with a Certificate of Deposit (CD).
Written by
Zina Kumok
Last Update on Jan 10, 2024
Table Of Contents
A CD is like a savings account with a contract. Like savings accounts, CDs are insured by the FDIC, so your funds are protected. However, when you open a CD, you have to choose a term that determines how long your money is held by the bank.
When that term ends, you can withdraw your money fee-free. If you’re still interested, keep reading to see our top picks for CDs.
Barclay
High interest rates
No minimum opening deposit or balance requirement
Interest compounds daily
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Unlike other banks, Barclay does not have a minimum opening deposit or minimum balance requirement. They only offer regular CDs that come with an early withdrawal penalty.
This is one of the best CDs to open if you can’t afford to stash away a large sum, but still want a competitive interest rate.
| Term | APY | Minimum Deposit | Early withdrawal penalty |
|---|---|---|---|
| 12 months | 4.80% | $0 | 90 days of interest |
| 18 months | 4.80% | $0 | 90 days of interest |
| 24 months | 4.40% | $0 | 90 days of interest |
| 36 months | 4.30% | $0 | 180 days of interest |
| 48 months | 4.25% | $0 | 180 days of interest |
| 60 months | 4.35% | $0 | 180 days of interest |
Synchrony Bank
High interest rates
No minimum opening deposit or balance requirement
Short term options available
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Synchrony Bank offers a variety of CDs including bump-up CDs, which let you increase the interest rate at one point during the term.
They also offer one no-penalty CD, so you can close the account before the maturity date without owing any extra fees. Synchrony Bank also has a wider range of terms, so you can be more specific when selecting a CD.
| Term | APY | Minimum Deposit | Early withdrawal penalty |
|---|---|---|---|
| 3 months | 4.90% | $0 | 90 days of interest |
| 6 months | 4.80% | $0 | 90 days of interest |
| 9 months | 4.60% | $0 | 90 days of interest |
| 11-month (no-penalty) | 4.30% | $0 | N/A |
| 12 months | 4.40% | $0 | 180 days of interest |
| 60 months | 4.50% | $0 | 365 days of interest |
CIT Bank
Better-than-average rates
High opening minimum deposit
Rates vary wildly depending on the term
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CIT Bank has a $1,000 minimum opening deposit requirement for its CDs, which is higher than some of the other banks on this list. They also charge an early withdrawal penalty. However, their 11-month no-penalty CD has a 4.90% interest rate, one of the best available for no-penalty CDs.
The rates are high for short-term CDs, but drop drastically for longer terms. If you want to hold your money for a longer term, you may want to choose a different bank.
| Term | APY | Minimum Deposit | Early withdrawal penalty |
|---|---|---|---|
| 6 months | 5% | $1,000 | 90 days of interest |
| 11 months (no-penalty) | 4.90% | $1,000 | N/A |
| 12 months | .30% | $1,000 | 90 days of interest |
| 13 months | 4.65% | $1,000 | 180 days of interest |
| 18 months | 4.60% | $1,000 | 180 days of interest |
| 36 months | .40% | $1,000 | 180 days of interest |
| 48 months | .50% | $1,000 | 360 days of interest |
| 60 months | .50% | $1,000 | 360 days of interest |
BMO
High interest rates
Long term CDs available
High opening deposit
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While BMO offers high interest rates on its CDs, it also charges a steep early withdrawal penalty. The fee is 180 days of interest on a 13-month CD or 270 days of interest on a 25-month CD.
Make sure you can afford to keep the money parked in a CD for the full term. If you can’t, try picking a shorter CD. Another downside is the $1,000 opening minimum deposit, which may be higher than what some savers can afford to spend.
| Term | APY | Minimum Deposit | Early withdrawal penalty |
|---|---|---|---|
| 13 months | 4.75% | $1,000 | 180 days of interest |
| 25 months | 4.50% | $1,000 | 270 days of interest |
| 35 months | 4.30% | $1,000 | 270 days of interest |
| 45 months | 4.30% | $1,000 | 365 days of interest |
| 59 months | 4.30% | $1,000 | 545 days of interest |
Marcus
Many different terms to choose from
Opening deposit required
Can choose from traditional CDs or no-penalty CDs
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Marcus offers the longest terms on this list, as well as the most variety. While they do have a minimum opening deposit requirement, it’s not as high as what other banks stipulate.
They do provide no-penalty CDs, but these have significantly lower rates than even other no-penalty CDs on the market.
| Term | APY | Minimum Deposit | Early withdrawal penalty |
|---|---|---|---|
| 6 months | 4.25% | $500 | 90 days of interest |
| 7 months (no-penalty) | 0.45% | $500 | N/A |
| 9 months | 4.30% | $500 | 90 days of interest |
| 11 months (no-penalty) | 0.35% | $500 | N/A |
| 12 months | 4.75% | $500 | 180 days of interest |
| 18 months | 4.30% | $500 | 180 days of interest |
| 24 months | 4.35% | $500 | 180 days of interest |
| 36 months | 4.30% | $500 | 180 days of interest |
| 48 months | 4.00% | $500 | 180 days of interest |
| 60 months | 3.80% | $500 | 180 days of interest |
| 72 months | 3.70% | $500 | 270 days of interest |
Bread Financial
Interest compounds daily
Rates are higher than some competitors
High opening deposit requirement
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Bread Financial offers some of the best rates on this list, but they also have the highest minimum opening deposit requirement. However, if you can afford to lock away at least $1,500, then you could profit more than with other CDs.
Bread Financial does not offer no-penalty CDs.
| Term | APY | Minimum opening deposit | Early withdrawal penalty |
|---|---|---|---|
| 12 months | 5.20% | $1,500 | 90 days of interest |
| 24 months | 5.0% | $1,500 | 180 days of interest |
| 36 months | 4.50% | $1,500 | 180 days of interest |
| 48 months | 4.35% | $1,500 | 365 days of interest |
| 60 months | 4.25% | $1,500 | 365 days of interest |
What Exactly Is A Certificate Of Deposit (CD)?
A Certificate of Deposit, commonly referred to as a CD, is a financial product offered by banks and credit unions. It’s essentially a savings instrument, but with a twist. Unlike regular savings accounts where you can deposit or withdraw funds on a whim, a CD binds you and your money to a specific term or duration. Here’s a quick breakdown:
- Fixed Term: When you open a CD, you commit to leaving a certain sum of money untouched for a predetermined period. This term can range anywhere from a few months to several years, depending on what suits your financial goals.
- Guaranteed Interest Rate: In exchange for keeping your money with the bank or credit union for that fixed term, you are guaranteed a specific interest rate. This rate is typically higher than what regular savings accounts offer, making CDs an attractive option for many savers.
- Restricted Access: The catch with CDs is the limited access. If you want to withdraw your money before the end of the term, you’ll likely face a penalty. However, this isn’t a tactic to be mean—it’s a way for the bank to ensure they can use your funds reliably for the agreed period and to incentivize you to stick to your savings commitment.
- Safety: CDs are considered a low-risk investment. In the U.S., they are generally insured up to $250,000 per depositor at FDIC-insured banks or at NCUA-insured credit unions. This means even if the bank or credit union faces financial challenges, your money remains secure.
When Is It A Good Time To Invest In A CD?
When it comes to financial planning and investing, timing can be everything. With the fluctuating nature of markets, interest rates, and economic conditions, knowing when to put your money into an investment vehicle becomes paramount.
Reading the Interest Rate Landscape
Rising Interest Rate Environment
Typically, a good time to buy a CD is when interest rates are on an upward trajectory or are expected to rise. When you lock in a rate during such a time, your CD will yield higher returns over its term, especially if you’re opting for a longer duration.
Stable Economic Climate
CDs tend to shine brightest when the economic horizon looks uncertain or when volatile markets make riskier assets, like stocks, less appealing. In such climates, the guaranteed return and security of a CD can offer peace of mind.
Personal Financial Considerations
Financial Needs
Before purchasing a CD, evaluate your financial needs. If you anticipate significant expenses or think you might need access to your funds in the near future, you might want to hold off or opt for a shorter-term CD. Remember, the essence of a CD is that your funds are locked in, and early withdrawals can attract penalties.
Diversification Strategy
Financial advisors often tout the importance of diversification. If your portfolio is heavily skewed towards riskier assets, buying a CD can be a strategic move to balance things out, providing a stable, fixed-return component to your overall investments.
Retirement and Long-Term Goals
If you’re nearing retirement or have specific long-term financial objectives, CDs can offer a predictable growth route. For instance, laddering CDs—buying several CDs with different maturity dates—can provide regular income and capital preservation as you transition into retirement.
Being proactive, staying informed, and aligning your CD purchase with both macro-economic indicators and personal milestones can help ensure that you get the most out of this time-honored investment vehicle.
Frequently Asked Questions (FAQs)
How Do I Find The Best CD Rates?
The best way to find competitive CD rates is by comparing offerings from various banks and credit unions, either by visiting their websites or using a financial comparison website.
Does A Higher CD Rate Mean A Better CD?
Not necessarily. While a higher rate can result in more interest earned, other factors such as the bank’s reputation, customer service, and penalties for early withdrawal should also be considered.
What’s The Difference Between APY And Interest Rate?
Interest rate is the annual nominal rate your CD earns, while APY takes into account the effect of compounding interest, giving you a more accurate picture of your earnings.
What Term Length Should I Choose For My CD?
The term length should match when you’ll need the money. Longer terms usually offer higher rates but also have steeper penalties for early withdrawal.
What Happens When A CD Matures?
When a CD matures, you have a short grace period during which you can make changes, like withdrawing the money or rolling it over into a new CD. If you don’t, many banks will automatically renew the CD at the current rate.
Can I Withdraw My Money Before The CD Term Ends?
Yes, but most banks charge an early withdrawal penalty, which could wipe out any interest earned.
Are CDs A Good Investment?
CDs can be a safe investment for conservative savers because they are FDIC or NCUA insured. However, the return tends to be lower than riskier investments like stocks or bonds.
How Do I Open A CD?
You can open a CD at most banks and credit unions, either online, over the phone, or in person. You’ll need to provide personal information and funds for the deposit.
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