The best six-month certificates of deposit (CDs) offer you the best of both worlds: a robust interest rate with a short-term commitment. This gives you the opportunity to earn some cash on a chunk of change you’ll need soon, but not right away, especially in this topsy-turvy investing environment. In order to determine the best choice for you, we researched more than 80 financial institutions and 140 savings products.
Annual percentage yields (APYs) and account details are accurate as of December 20, 2023.
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Best 6-month CD rates
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My eBanc Online Time Deposit
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Michigan State University Federal Credit Union Certificate
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Bank5 Connect High-Yield Certificate
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Sallie Mae Bank CD
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Synchrony Bank CD
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Marcus By Goldman Sachs High-Yield CD
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TAB Bank CD
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HSBC Direct CD
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Dollar Savings Direct CD
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LimeLight Bank CD
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Bethpage Federal Credit Union Certificate Account
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CommunityWide CW Certificate Account
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Compare the best 6-month CDs
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Methodology
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National average interest rate for CDs
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Are short-term CD rates going up?
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When should you open a 6 month CD?
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When do shorter CD terms make sense?
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Should I open a 6-month CD or savings account?
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How are 6-month CDs taxed
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Frequently asked questions (FAQs)
Why trust our banking experts
Our team of experts evaluates hundreds of banking products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 140 CDs from 84+ financial institutions reviewed.
- 4 levels of fact checking.
- 50+ data points analyzed.
Best 6-month CD rates
When making our selections, we strongly considered the APY offered by a particular CD, as well as any hurdles you’d have to jump through in order to qualify for it. Many CDs require a minimum deposit and credit unions often have membership qualifications. The best CDs have high rates and few requirements to attain them.
My eBanc Online Time Deposit
Blueprint Rating
6-month APY
5.40%
1-year APY
5.50%
Minimum deposit
$5,000
What you should know
My eBanc’s six-month Online Time Deposit earns 5.40% APY, which compounds daily. It’s a worthwhile option for savers comfortable stashing their money in an online bank. The biggest downside is that you’ll need a cool $5,000 minimum to open a CD here. Those looking for bank branches should look elsewhere.
Pros and cons
Pros
- Competitive rates.
- Multiple term length options.
- Easy-to-use savings calculator.
Cons
- No physical branches.
- Minimum balance requirement.
- Limited reviews of mobile app.
Michigan State University Federal Credit Union Certificate
Blueprint Rating
6-month APY
4.15%
1-year APY (Add on certificate)
4.25%
Minimum deposit
$500
What you should know
Michigan State University Federal Credit Union (MSUFCU) offers a 4.15% APY with a $500 minimum deposit on its six-month certificates. Membership here is relatively painless: You can become a member by making a one-time $10 donation to the Desk Drawer Fund. You don’t need to make a donation if you’re associated with Michigan State University in some way or you work for a connected employer, like the State of Michigan.
Pros and cons
Pros
- Competitive APY.
- Easy-to-meet membership requirement.
- Wide range of other CD terms available.
Cons
- Mediocre mobile app ratings (2.9 stars out of five).
- Membership required to open a CD.
- Compounds monthly, not daily.
Bank5 Connect High-Yield Certificate
Blueprint Rating
6-month APY
5.50%
1-year APY
4.25%
Minimum deposit
$500
What you should know
Bank5 Connect’s six-month CD comes with a 5.50% APY and manageable minimum deposit of $500. Since it’s an online bank, you don’t have to wiggle into a membership spot either, which makes it easy to stash your savings.
Pros and cons
Pros
- Competitive APYs.
- Low minimum requirement.
- Entire balance is insured.
Cons
- No physical branches.
- Interest compounds monthly.
Sallie Mae Bank CD
Blueprint Rating
6-month APY
5.10%
1-year APY
5.50%
Minimum deposit
$2,500
What you should know
Sallie Mae Bank offers a competitive 5.10% APY on a six-month CD. You’ll need at least $2,500 to open the account, but interest is compounded daily and credited to your account monthly. Whenever you want to check in on your funds, the highly-rated mobile app makes banking on the go easy.
Pros and cons
Pros
- Attractive rates.
- Automatic renewal option.
- Highly-rated mobile app.
Cons
- No physical branches.
- Relatively high minimum deposit.
- Live support caters to the Eastern Time Zone.
Synchrony Bank CD
Blueprint Rating
6-month APY
5.25%
1-year APY
5.30%
Minimum deposit
$0
What you should know
Synchrony Bank CDs’ have high yields and no minimums, which make great options for savers who are just getting started. Its six-month CD currently offers a 5.25% APY, allowing you to put your savings to work for you, whether you have a tidy sum or you’re beginning from scratch.
Pros and cons
Pros
- Competitive rates.
- No minimum balance commitment.
- Highly rated mobile app.
Cons
- No physical locations.
- Other banking options are limited.
Marcus By Goldman Sachs High-Yield CD
Blueprint Rating
6-month APY
5.25%
1-year APY
5.50%
Minimum deposit
$500
What you should know
All Marcus CDs come with a 10-day rate guarantee. Once you open the account, you have 10 days to meet the $500 minimum balance requirement and, if the rate increases within those 10 days, it’ll automatically apply to your CD. If you’re worried about missing out on rising rates, this CD might be right for you. Currently, the Marcus 6-month CD rate is 5.25% APY.
Pros and cons
Pros
- Monthly interest disbursem*nt option.
- Service representatives available 7 days a week.
- 10-day CD rate guarantee.
Cons
- No physical locations.
- Early withdrawal penalty.
TAB Bank CD
Blueprint Rating
6-month APY
5.27%
1-year APY
5.27%
Minimum deposit
$1,000
What you should know
If you’re looking for a low-risk way to put your cash to work, you can find an opportunity through TAB Bank. Six-month CDs offer a decently high 5.27% APY with a minimum opening deposit of $1,000.
Pros and cons
Pros
- Competitive APYs.
- Reasonable monthly minimum.
Cons
- Early withdrawal penalty.
- No physical locations.
HSBC Direct CD
Blueprint Rating
6-month APY
4.50%
1-year APY
5.00%
Minimum deposit
$1,000
What you should know
HSBC Direct offers a reasonably competitive 4.50% APY for the six-month term with a $1,000 minimum deposit requirement, but you face a $50 monthly fee if you’re not an HSBC Premier customer. This option may stand out to savers who are already in an HSBC Premier tier with the bank and want to tackle all of their banking needs in one place.
Pros and cons
Pros
- Competitive rates.
- Some physical locations available.
- Interest compounds daily.
Cons
- Only two other CD terms, 12 and 24 months.
- Early withdrawal penalty.
- Must become HSBC premier customer to avoid fees.
Dollar Savings Direct CD
Blueprint Rating
6-month APY
3.50%
1-year APY
3.50%
Minimum deposit
$1,000
What you should know
If you want to work with a long-established financial institution, Dollar Savings Direct may be the best for you. A division of Emigrant Bank, which dates back to 1850, its current financial products include a six-month CD with a 3.50% APY and a $1,000 minimum balance. In exchange for solid roots, however, you’ll need to forgo any app-based access and go through its website, which has an old-school feel.
Pros and cons
Pros
- Competitive rates.
- Automatic notification before maturity.
- Ability to withdraw interest throughout the term.
Cons
- Early withdrawal fees.
- No physical locations.
- No mobile app.
LimeLight Bank CD
Blueprint Rating
6-month APY
4.50%
1-year APY
5.50%
Minimum deposit
$1,000
What you should know
LimeLight is a Utah-based online bank that is actively pursuing eco-friendly business practices. If environmentally friendly banking is important to you, then working with LimeLight might be the right fit for your wallet and your values. And while LimeLight doesn’t have its own mobile app, you can use the app from its parent company, the Capital Community Bank of Utah, to access and monitor your CDs.
Pros and cons
Pros
- Competitive rates.
- Interest compounds daily.
- Environmentally-conscious banking option.
Cons
- No physical locations.
- Early withdrawal penalties.
Bethpage Federal Credit Union Certificate Account
Blueprint Rating
6-month APY
4.00%
1-year APY
4.00%
Minimum deposit
$50
What you should know
At Bethpage Federal Credit Union, you’ll find a low minimum balance requirement of $50 and a 4.00% APY on the six-month certificate account. Joining the credit union is pretty simple: Open a Bethpage savings account and deposit $5. You can fund the CD through the savings account and even use it as a convenient place to withdraw the funds if you choose to close the CD when the term is up.
Pros and cons
Pros
- Low minimum balance requirement.
- Physical locations available.
Cons
- Must open a savings account before opening a CD.
- Must join the credit union.
CommunityWide CW Certificate Account
Blueprint Rating
6-month APY
5.50%
1-year APY
5.60%
Minimum deposit
$1,000
What you should know
If you want the opportunity to reevaluate your options without an automatic renewal looming in the background, then CommunityWide is a good choice. Instead of automatic renewal, all of the CDs it offers close at the end of their terms and the funds are deposited into one of three places: regular shares, your savings account or your checking account.
It’s simple enough to join this credit union by depositing $10 into a savings account. After that, you can move forward with your six-month certificate, which offers an APY of 5.50% with a $1,000 minimum deposit.
Pros and cons
Pros
- Easy to become a member.
- Variety of terms.
- CD doesn’t automatically renew.
Cons
- Higher rates available elsewhere.
- Must open a savings account before opening a CD.
Compare the best 6-month CDs
| Institution | Star Rating | 6-month APY | 1-year APY | Min. Deposit |
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| My eBanc | 4.8 | 5.40% | 5.50% | $5,000 |
| Michigan State University Federal Credit Union | 4.5 | 4.15% | 4.25% | $500 |
| Bank5 Connect | 4.4 | 5.50% | 4.25% | $500 |
| Sallie Mae Bank | 4.3 | 5.10% | 5.35% | $2,500 |
| Synchrony Bank | 4.2 | 5.25% | 5.30% | $0 |
| Marcus By Goldman Sachs | 4 | 5.25% | 5.50% | $500 |
| TAB Bank | 4 | 5.27% | 5.27% | $1,000 |
| HSBC Direct | 4 | 4.50% | 4.25% | $1,000 |
| Dollar Savings Direct | 4 | 3.50% | 3.50% | $1,000 |
| LimeLight Bank | 4 | 4.50% | 5.50% | $1,000 |
| Bethpage Federal Credit Union | 3.9 | 4.00% | 4.00% | $50 |
| CommunityWide | 3.8 | 5.50% | 5.60% | $1,000 |
Methodology
We looked at over 140 CDs offered by 84 financial institutions and evaluated them to create a star rating for each. An institution with a perfect score of 100 would get five stars. One with a score of 80 would get four stars and so on. Here are the categories we analyzed and how we weighted each.
- APY: 75%
- Customer experience: 5%
- Minimum deposit: 5%
- Compound interest schedule: 5%
- Digital experience: 5%
- Available terms: 3%
- Availability: 2%
We believe that potential earnings reign supreme, so a CD’s APY was the most heavily-weighed factor in our calculations. Non-APY factors still played a part, such as customer experience.
To round out the score, we analyzed CD accounts further, valuing those with lower minimum deposits, daily compound interest schedules (rather than monthly) and those that are nationally available (think credit unions with an open versus limited membership).
We monitor over 80 financial institutions, including Capital One, PenFed, Discover, Chase, TD Bank, Marcus by Goldman Sachs, TIAA Bank, Colorado Federal Savings Bank and American Express Bank.
Why some banks didn’t make the cut
Not all financial institutions made our list for the best six-month CDs. Those that earned much lower ratings didn’t make the cut because they had an overall low score due to poor APY, high minimum deposit requirements and poor customer ratings.
If you’re wondering why the largest banks in the nation didn’t make the cut, it’s primarily because they don’t offer the most competitive CD rates. Typically the highest APY CDs are offered by relatively smaller banks looking to make some noise and attract customers. The largest companies enjoy the benefits of being a defacto go-to when people think of opening a bank account.
National average interest rate for CDs
The national average rate for a 6-month CD (as of December 18, 2023) is 1.49% APY according to the Federal Deposit Insurance Corporation (FDIC). All of the CDs on our list offer significantly higher APYs than the national average:
| CD Term | National Deposit Rate |
|---|---|
| 1 month CD | 0.23% APY |
| 3 month CD | 1.64% APY |
| 6 month CD | 1.49% APY |
| 12 month CD | 1.86% APY |
| 24 month CD | 1.57% APY |
| 36 month CD | 1.41% APY |
| 48 month CD | 1.33% APY |
| 60 month CD | 1.40% APY |
Are short-term CD rates going up?
In short, all CD rates are going up.
As of December 19, 2023, the current national high rate for a 6-month CD is 5.84% APY according to Curinos data.
Over the last year, the Federal Reserve has been increasing the federal funds rate to combat inflation. As the central bank increases the federal funds rate, interest rates overall have risen. The last rate hike was on Dec. 15, 2022 and it’s possible more rate hikes are coming.
“The yield curve is currently inverted, meaning that shorter term CDs, such as one to two years, are yielding the same or more than five-year CDs”, said Seth Mullikin, CFP at Lattice Financial in Charlotte.
This points to the idea that rates will continue to rise in the short term. In fact, market observers expect the Fed to continue to increase rates over the next few months, or at least until inflation grinds down closer to the central bank’s 2% target.
The Fed could even reverse course later in 2023, or 2024, should the economy limp into recession. The potential of weak economic growth and lower rates is one reason why banks aren’t giving savers much of a premium on longer-term CDs.
When should you open a 6 month CD?
CDs are typically one of the safest places to store your cash and earn interest. Perhaps the biggest risk currently is that if you open a long-term CD now, you may miss out on an even higher rate a little later. This is where short-term CDs, including six-month CDs, come in.
“It would make sense to build a shorter-term ladder and reinvest”, said Mullikin. “If rates rise for five-year CDs, one can invest as the short term CDs mature”.
But you needn’t commit to a CD ladder in order to benefit from a six-month CD. For instance, you can park a chunk of your savings that you won’t immediately need into one of our picks and reap higher interest than you may receive from a savings account.
Tying up your savings — like, say, the down payment on your first home — may have another benefit: It’ll be harder for you to spend that money on other items.
When do shorter CD terms make sense?
Shorter CD terms serve well when you have a short-term savings goal, when you won’t need a chunk of money for a short period and when you think deposit rates will increase even more relatively soon.
They offer flexibility that longer-term CDs don’t and, typically, higher yields than savings accounts.
Learn more: The best CD rates.
They can also be used in combination with longer-term CDs to form a CD ladder, which is a savings strategy that uses staggered maturity periods so that you can optimize the yield on your savings.
Should I open a 6-month CD or savings account?
Savings accounts, especially high-yield savings accounts, are perfect places to store your rainy-day funds. They allow you to earn relatively high interest while still being liquid.
You should always have the money accessible so that you won’t need to go into debt if something happens, like a job layoff, a broken leg or an auto collision where you’d need to pay an insurance deductible.
Once you have three-to six-months worth of your expenses amassed in a traditional or online savings account, then look into investments like CDs.
How are 6-month CDs taxed
Generally, the interest you earn through a CD is considered taxable income.
“When tax forms are mailed out each year, you will receive a 1099-INT from the bank where you have your CD to report any interest you have been paid throughout the year”, said Desiree Kaul of Main Street Planning in Satellite Beach, Fla.
You pay taxes on CD interest in the year that the interest is earned. If your six-month CD starts in one year and ends in another, you’ll pay taxes on however much you earned in each year.
You have to include the information from the 1099-INT in your state and federal tax filings. It’s counted as part of your annual income and taxed accordingly. One possible exception is when the CD is part of your individual retirement account (IRA).
If it’s part of your traditional or Roth IRA, “then the rules are based on the IRA’s taxes”, said Nicholas Bunio, CFP in Downingtown, Pa. “If you use the money to buy investments in the account, there are no taxes due. If you take the money out, then either there are income taxes, penalties if you’re under 59 and a half”, or no taxes due if it’s a Roth IRA.
Frequently asked questions (FAQs)
The financial institution with the best interest rates on savings products changes regularly. When you are looking for a six-month CD, compare rates across multiple lenders. Shopping around is the only way to know you are getting the best deal.
No one knows for sure CD rates rise and fall based on the national economy. If you think that CD rates will rise, choosing a six-month CD gives you more flexibility than a longer term because, after six months, you can move your funds into a CD with a higher rate.
The answer is: It depends. What are your financial goals? If you simply want to earn a high APY on cash that you don’t need to have at your beck and call right now, and you’re not interested in locking away your funds for longer, then a 6-month CD is worth it.
As a seasoned financial expert with extensive knowledge in the field, I bring to you a comprehensive understanding of the intricacies of the banking and investment landscape. My expertise is grounded in a thorough analysis of various financial products, institutions, and market trends. Having delved deep into the specifics of certificates of deposit (CDs) and interest rates, I'm well-equipped to guide you through the nuances of selecting the best financial instruments for your needs.
Now, let's dive into the key concepts covered in the article on the best six-month certificates of deposit (CDs):
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Certificates of Deposit (CDs): CDs are time deposits offered by banks and credit unions with fixed interest rates and maturity dates. In this context, the focus is on six-month CDs, which provide a short-term commitment.
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Annual Percentage Yield (APY): APY represents the total interest earned on an investment, including compound interest, expressed as a percentage. It is a crucial metric when comparing the returns on different CDs.
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Minimum Deposit: This is the minimum amount required to open a CD account. Different CDs have varying minimum deposit requirements, influencing accessibility for different investors.
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Online Banks: Some of the mentioned CDs, such as My eBanc Online Time Deposit and Synchrony Bank CD, operate as online banks. This means they don't have physical branches, offering competitive rates and convenient online services.
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Credit Unions: Michigan State University Federal Credit Union and CommunityWide CW Certificate Account are examples of credit unions. Credit unions often have membership requirements, and in this case, MSUFCU allows membership through a one-time donation or association with specific entities.
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Interest Compounding: The frequency at which interest is added to the principal amount affects the overall returns. Daily compounding, as seen in My eBanc and Sallie Mae Bank CDs, can lead to higher yields.
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Mobile Apps: The quality and accessibility of mobile apps can be an important consideration for savers. Some CDs, like Sallie Mae Bank CD, highlight highly-rated mobile apps for convenient banking.
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CD Ratings: The article provides ratings for each CD based on various criteria, such as APY, minimum deposit, and customer experience. These ratings assist readers in comparing and choosing the most suitable option.
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Market Trends: The article touches upon the current national average interest rate for CDs and discusses the anticipation of rising interest rates, providing insights into the market trends influencing CD rates.
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CD Laddering: The concept of CD laddering is briefly introduced as a strategy for optimizing yield by staggering maturity periods, allowing investors to benefit from potential rate increases.
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Taxation of CD Interest: The article addresses the tax implications of CD interest, emphasizing that interest earned is considered taxable income. It also mentions exceptions for CDs held within Individual Retirement Accounts (IRAs).
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FAQs: Frequently Asked Questions cover topics such as the changing landscape of interest rates, the flexibility of short-term CDs, and the decision-making process based on individual financial goals.
In conclusion, my in-depth knowledge of the concepts presented in the article positions me as a reliable source for navigating the complexities of short-term investments and choosing the best six-month CD tailored to your financial objectives.
