Want a risk-free investment that earns you more than 5% a year? Try these CDs. (2024)

With CDs, you tie up your savings for a fixed term. In exchange, you get interest rates that outpace what traditional savings accounts offer—right now, some CDs offer rates that exceed 5%.

So, if you’re ready to part with your cash and earn more, the Fortune Recommends™ editorial team has rated and ranked the best CDs.

The highest current CD rates for our top picks*

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The 10 best CD rates overall

Here’s our rundown of the top 10 CDs according to our research, including the key figures you should know before you open an account.

Note: APYs are updated weekly, but are subject to change. Please refer to the website of each provider for the most up-to-date information.

1. BMO Alto: for savers who prefer a big bank

About: BMO Alto is an online banking division of BMO Financial, one of the largest banks in the U.S. Currently, BMO Alto offers just two products: a high-yield savings account and CDs ranging from six months to five years.

Key numbers

Minimum opening deposit: $0

Why we picked it

BMO Alto was one of two banks on our list with no minimum opening deposit, making it a solid choice for savers who want to dip their toes into CDs for the first time. BMO Alto also offers some of the highest interest rates on our list—savers can earn an impressive 5.65% APY on its 1-year CD.

BMO Alto is an online-only bank with limited customer service options—you can only contact them via phone.

Other CD rates*

*While our methodology only considered 1-, 3-, and 5-year CDs, here are the other CD terms available if you’re looking for more options:

2. MYSB Direct: for savers interested in investing for the long run

About: MYSB Direct, a.k.a. M.Y. Safra Bank, is headquartered in New York City and operates a single branch there. Its products include personal checking and savings accounts, lending services, and more.

Key numbers

Minimum opening deposit: $500

Why we picked it

If you want a safe place to put money that you’ll need a few years from now, consider opening a 5-year CD with MYSB Direct. Of the banks on our list, MYSB offered one of the highest 3-year CD APYs, clocking in at 5.05%. However, MYSB also has one of the heftiest early withdrawal penalties, so be prepared to keep your hands off your money or pay up.

MYSB Direct has one physical location in New York City, but you can reach customer service via email or phone.

Other CD rates

3. First Internet Bank: for savers with at least $1,000 to invest

About: First Internet Bank was established in 1999, operating online with headquarters in Indiana. The bank provides savings accounts, money market accounts, and CDs, among other consumer banking services.

Key numbers

Minimum opening deposit: $1,000

Why we picked it

First Internet has APYs that top 4.50% on all of the CDs we evaluated. While you’ll need at least $1,000 to take advantage of these high APYs, the minimum opening deposit is reasonable compared to other banks’ requirements

Plus, if you ever need to contact customer service, First Internet Bank has stellar customer service even though it’s a digital bank with no physical locations: You can access customer service via email, chat, or phone.

Other CD rates

4. Bread Savings: for savers who prefer a digital bank

About: Bread Savings, formerly Comenity Direct Bank, is an online bank—part of Bread Financial—that offers CDs ranging from one to five years and a high-yield savings account.

Key numbers

Minimum opening deposit: $1,500

Why we picked it

Bread Savings had the highest minimum deposit requirement on our list, but it offers one of the most competitive APYs on its 1-year CD: 5.60%.

However, there may be costs associated with your CD. Accountholders should be aware of fees charged for outgoing wire transfers, official check requests, and paper statement fees.

Bread Savings is a digital bank. If customers need help, they can call or send a secure message through its banking portal.

Other CD rates

5. First National Bank of America: for savers who want to make partial withdrawals from their CD

About: Founded in 1955, First National Bank of America (FNBA) offers a handful of banking products, such as checking and savings accounts, CDs, and mortgages. Though FNBA is available nationwide, it has a handful of locations in Michigan.

Key numbers

Minimum opening deposit: $1,000

Why we picked it

Though FNBA’s minimum opening deposit requirement of $1,000 may be steep for some, you’ll get a generous APY in return: All of their CDs have APYs above 4.50%.

Customers can opt for a partial withdrawal of their funds—though this could mean missing out on some compound interest.

You can access FNBA’s customer service via phone or online request.

Other CD rates

6. Crescent Bank: for savers who just want a CD and don’t need other bank account options

About: Founded in 1991 in New Orleans, Crescent Bank has a variety of products such as CDs, mortgages, and check and savings accounts. Not all of its banking products are available nationwide, but its CDs are.

Key numbers

Minimum opening deposit: $1,000

Why we picked it

Crescent Bank has a higher minimum opening deposit, but you’ll be rewarded handsomely for tying your money up in one of their CDs. You can get an APY above 5% on both their 1-year and 18-month CDs. Plus, if you invest in their other CDs, you’re guaranteed an APY above 4.50%, at least for now.

Crescent Bank has a handful of locations in Louisiana, but customers nationwide can access help via phone call.

Other CD rates

7. Alliant Credit Union: for savers who prefer a credit union over a bank

About: Founded in 1935, Alliant Credit Union is a not-for-profit credit union offering accounts—such as savings accounts and certificates—and lending products like auto loans and mortgages.

Key numbers

Minimum opening deposit: $1,000

Why we picked it

Alliant made our list because of its solid APYs and variety of customer support options. However, you must be a member to start investing and need at least $1,000 to start.

Membership eligibility is extended to current or former employees of Alliant’s partner organizations, residents or workers in a Chicago-area community, or members of Foster Care to Success, a non-profit, with Alliant covering the $5 one-time membership fee.

If you choose Alliant as your financial home, it is a digital credit union, so you won’t have access to physical branch locations. You will, however, be able to contact customer service via email, chat, or phone.

Other CD rates

8. Prime Alliance: for savers who want the highest APYs on 1- and 3-year CDs

About: Founded in 2004, Prime Alliance is a Utah-based bank offering products like checking and savings accounts, CDs, and IRA CDs.

Key numbers

Minimum opening deposit: $1,000

Why we picked it

Currently, shorter-term CDs have APYs that beat out rates on longer-term ones. If you opt for a Prime Alliance CD with a duration of less than three years, you can score an APY above 5%.

And if you need assistance from Prime Alliance customer service, you can reach them via phone or email.

Other CD rates

9. Quontic Bank: for the saver who wants a community digital bank

About: Quontic Bank is a digital bank that first started as a community bank in New York City in 2009. Quontic offers products like savings accounts and mortgage products.

Key numbers

Minimum opening deposit: $0

Why we picked it

Quontic Bank’s CDs made our list for a few reasons. High APYs paired with a minimum deposit of $500 make these CDs a viable option for savers who want to earn interest on their funds without having to deposit a lot of money.

Other CD rates

10. Barclays: for savers who are just getting started

About: Barclays is a London-based bank that offers a handful of banking products to customers in the U.S., such as CDs, with terms ranging from one to five years. It doesn’t have any physical locations in the U.S.

Key numbers

Minimum opening deposit: $0

Why we picked it

Barclays’ CDs boast competitive APYs with no minimum opening deposit, which means you can cash in on high APYs regardless of how much money you have to save.

Customer service is available via phone or chat.

Other CD rates

Best CD Rates by term length

In most cases, financial institutions will vary the APY of a CD depending on the length of time you’re willing to deposit the money for. While this doesn’t always mean you’ll earn a higher rate over a longer term, comparing products by term length is worth it to ensure you’re getting the most bang for your buck.

The tables below will show examples of top rates by term length. Information in the Notes columns will describe basic information about qualifications for these accounts, however, you should always refer to the institution itself for the most accurate information. Rates are updated weekly on Wednesdays.

Best 1-month CD rates

Best 3-month CD rates

Best 6-month CD rates

Review our full list of the best 6-month CD rates.

Best 9-month CD rates

Best 1-year CD rates

Review our full list of the best 1-year CD rates.

Best 18-month CD rates

Best 2-year CD rates

Best 3-year CD rates

Review our full list of the best 3-year CD rates.

Best 4-year CD rates

Best 5-year CD rates

Review our full list of the best 5-year CD rates.

Best 10-year CD rates

Complete guide to CDs

There are several terms and strategies you should familiarize yourself with in order to develop a CD strategy that works well for you. Here are some of the basics:

What is a certificate of deposit?

With CDs, or certificates of deposit, customers receive a fixed interest rate in exchange for tying up their money for a fixed period.

After a CD reaches maturity—or the end of its term—you can withdraw the money you deposited initially, plus any earned interest. Some CDs are penalty-free, so customers can withdraw funds before the term ends, but most CDs charge a penalty that’s usually worth a few days or months of interest.

Types of CDs

There are various types of CDs you can choose from depending on how much money you’d like to deposit into your CD, whether you’d prefer to have access to your money before maturity, and more. A few of the most common types of CDs include:

Brokered CDs

Brokered CDs are purchased and sold through a brokerage account, rather than through a traditional banking institution and may offer higher APYS than CDs offered by banks.

Jump CDs

Jump CDs, also known as bump-up or step-up CDs, allow you to upgrade or "jump" to a higher rate should the rate on your CD term increase after you've opened your account.

No-penalty CDs

This type of CD does not charge a penalty for withdrawing funds before your CD reaches maturity. This type of CD is less common than other CD types and may also offer lower APYs than traditional CDs.

Compare: No-penalty CDs vs. savings accounts

How are CD rates determined?

CD rates are set by your individual bank or financial institution. Although, there are several factors that can influence these rates. This includes the length of your CD term and type of CD, the amount of your initial deposit (some CDs offer tiered interest rates), benchmark interest rates set by the Federal Reserve, and temporary promotional offers offered by your financial institution.

What is the APY on a CD?

APY stands for "annual percentage yield." It's a way to calculate the total amount of interest that you can earn on an investment such as a CD in one year, taking into account the effect of compounding interest.

The APY of a CD will depend on the interest rate offered by the bank or financial institution, the frequency of compounding (daily, monthly, annually, etc.), and the length of the term of the CD.

What are CD ladders and how do they work?

For savers who are on the fence about locking away their funds in a CD for an extended amount of time, you’re not alone. While some CDs offer terms that are just a few months long, other CDs take years to mature. Still, longer-term CDs can be a surefire way to boost your savings.

One way to have the best of both short-term savings accounts and long-term is to set up a CD ladder. This is a savings strategy where you invest in several CDs with varying maturities. This way, you’ll benefit from higher rates on longer-term CDs, while still keeping some of your funds accessible in the near term. Learn more in our guide to CD ladders.

Do I have to pay taxes on CD interest?

If you opt for a CD as your primary savings vehicle, you should be aware that interest earned on the funds you deposit are considered taxable interest by the IRS. Your financial institution will typically send you a 1099-INT statement for any interest earned over $10, and the amount you owe will depend on how much interest you’ve earned and your tax bracket.

If you withdraw funds from your CD early, you can also expect to see those penalties on your 1099-INT form.

Is a certificate of deposit considered a safe investment?

Certificates of deposit are considered safe investments so long as they are helped by FDIC- or NCUA-insured financial institutions which insure your deposits up to $250,000 per depositor, per bank, for each account ownership category or up to $250,000 per share owner, per insured credit union, for each account ownership category.

How to choose the best CD

Every CD is a little different, so you’ll want to pay close attention to the account features and fine print before deciding where to put your savings. You’ll want to consider a few factors when choosing a CD:

• Term length: Your CD’s term length tells you how long it takes to mature. CD term lengths can be as short as one week or as long as 10 years. Choose a term length that meets your needs and aligns with your financial goals.
• APY: The annual percentage yield on your account significantly affects how much your money will grow. The higher the rate, the more you can expect to earn in interest.
• Minimum deposit: Most, but not all, banks and credit unions require that you invest a minimum amount of money to open a CD. The minimum opening deposit can range from a few dollars to thousands. Most CDs require depositing a lump sum and don’t allow additional contributions. Make sure you can meet the minimum opening deposit requirement.
• Penalties: Not all CDs carry early withdrawal penalties, but if yours does, you could lose out on your earned interest and some of your principal balance. You may not be able to plan for an early withdrawal, but it’s good to know the penalty if you need to touch your money early.
• Deposit insurance: FDIC and NCUA insurance provides depositors with insurance coverage if their bank or credit union fails—up to $250,000 per depositor or share owner. Double-check that your account is insured to protect your money if there’s a bank failure.

How to calculate CD earnings potential

To calculate your earnings from a CD, you’ll need touse the following formula: A = P(1+R/N)(NT). Where ‘A’ represents the value of your CD, including interest. ‘P’ is equal to your principal balance or initial deposit. ‘R’ represents your yearly interest rate, in this case it would be your APY. ‘N’ represents the compound frequency of your CD in a given year, and ‘T’ represents the number of years until your CD’s maturity date.

Pros and cons of CDs

While CDs can be attractive for their high interest rates, they aren’t a perfect fit for everyone. Let’s review some of the pros and cons.

Advantages of certificates of deposit

CDs offer many advantages for savers, including higher APYs and fixed rates, which may offer greater returns over time. Additionally, CDs are offered in a variety of terms, making it a viable option for savers with short- and long-term goals.

Disadvantages of certificates of deposit

CDs don’t offer the same liquidity as other savings accounts. Should you need to access your funds, you’ll likely be charged a penalty for doing so. Additionally, your overall returns upon your CD’s maturity date could be impacted if the inflation rate increases at a faster pace than your interest earnings.

Alternatives to CDs

CDs differ from other savings accounts in a few key ways. This type of account not only functions differently, but it may be better suited for a certain type of consumer who is saving for a goal with a specific timeline.

• Access to your savings: CDs don’t offer the same level of access to your savings that a traditional savings account or money market account would. Once you agree to your CD term, your money will sit, untouched, and accrue interest for the duration of your term until your CD hits maturity. Making a withdrawal early would result in an early withdrawal penalty.
• CDs usually offer higher APYs at a fixed rate: One of the major selling points for a CD account is that, typically, CDs offer a fixed APY at a higher rate than other types of savings vehicles. That means that you’ll be able to take advantage of a higher rate for an extended period of time, and you’ll have the peace of mind knowing that once you’ve locked in your rate, your APY won’t fluctuate during your term in response to external factors like federal funds rate increases.

CDs vs. high-yield savings accounts

High-yield savings accounts work in the same way as traditional savings accounts. It’s a deposit account at a credit union or bank that you can use for saving and earning interest on your money—usually at a higher rate. This type of savings account differs from CDs in that they offer greater access to your funds, rather than requiring you to lock away your funds for a set amount of time. As such, there's no penalty for making withdrawals.

CDs vs. money market accounts

Money market accounts function as a hybrid between savings accounts and checking accounts. Similar to CDs, these accounts typically offer much higher APYs than checking accounts, but may still offer some of the same features including check writing, debit card access, and the ability to make withdrawals and deposits via ATM. Like a CD, this type of account may also be of interest to savers who have the ability to make a larger opening deposit.

Read more: Compare CDs vs. money market accounts

CD rates by state

While many banks are available nationwide, there are also hundreds of smaller institutions that may only serve customers in a more localized region. Here are the banks in each U.S. state with the highest CD rates.

View CD rates in:

• California
• Florida
• New Jersey
• New York
• Texas

Our methodology

The Fortune Recommends^TM team compared certificates of deposit (CDs) from more than 45 major banks, credit unions, and online-only banks that offered one-, three-, and five-year CD terms. Our top picks are available to customers across the U.S. no matter where you’re located, subject to the terms of each CD.

For our best overall CD rates, we ranked the best overall CDs on the following categories and weighted each category as outlined in the percentages below:

• Annual percentage yield (APY) on a one-year term (25%): This number represents the real rate of return on your balance; the higher the APY, the better. We weighted the APY for each CD term the same amount.
• APY on a three-year term (25%)
• APY on a five-year term (25%)
• Minimum deposit requirement (20%): To open a CD at any financial institution, the institution will require that you deposit a minimum dollar amount. We thought a lower minimum was preferable and rated banks with lower minimum deposit requirements higher.
• Customer service (5%): Top picks offer customers three ways to get in contact: chat support, by phone, or email. Among the three options, we gave phone support the most weight.

We think the best CDs offer APYs twice the national average for one-year, three-year, and five-year terms. We didn’t include brokered CDs on our list, which are riskier because they are sold on the secondary market through brokerages.

CD rates, fees, and minimum deposit requirements may be limited-time offers, and APYs are subject to change. The FDIC or NCUA insures all the banks and credit unions on this list. Terminating your CD before it matures may incur a penalty fee, which varies by bank and credit union.

Frequently asked questions

In which situation would a certificate of deposit (CD) be the best banking choice?

A CD may be the best banking choice for you if you are saving for a long-term goal with a specific timeline in mind. To avoid early withdrawal penalties or potentially forfeiting any interest earned on the funds in your CD, you want to be sure that you won't need access to your money before your CD's maturity date.

What is the minimum balance for a certificate of deposit?

The minimum balance for a CD will depend on your financial institution. There is no set minimum across the board. However, most institutions will require a minimum deposit between $500 and $1,000. Some may require higher or lower opening deposits.

Is it better to get a CD at a bank or at a credit union?

As long as you meet the membership requirements needed to join a credit union and verify that the financial institutions you're considering are FDIC or NCUA members, both banks and credit unions offer similar products, including CDs. Rates will vary across the board.

Can you add money to a CD?

When you invest in a CD, you typically deposit one lump sum and then leave it alone until the account reaches maturity. However, some financial institutions offer special types of "add-on" CDs that allow you to deposit additional funds after the initial deposit. The amount and frequency of deposits you're allowed to make depend on the particular account.

Are short-term or long-term CD rates better?

Generally speaking, long-term CDs offer higher interest rates than short-term CDs. This is because banks reward you with a higher return for committing your money for a longer period of time.

The drawback is that while you may earn more interest with a long-term CD, your money will also be tied up for a longer period. If it turns out you need your money sooner and withdraw it before the CD matures, you'll have to pay an early withdrawal penalty, which eats into your earnings.

However, the current economic environment can also affect CD rates. In periods of rising interest rates, shorter-term CDs can become more attractive because you can reinvest the funds more frequently at higher rates. This is sometimes referred to as a "CD ladder" strategy, where you stagger the maturity dates of your CDs to balance the benefits of short-term and long-term CDs.

Overall, whether it's better to choose a short-term or long-term CD depends on your goals, as well as the current interest rate environment. Learn more about how to invest in CDs in our guide.

What is considered a good CD rate?

A "good" CD rate can be somewhat subjective. That's because you need to strike a balance between the best rate available and the longest amount of time you can afford to keep your money tied up. For example, if you find a CD offering 5% APY, but it requires you to keep your money on deposit for five years, the interest rate may not be worth it. You might need your money sooner, or rates could go higher while you're stuck earning a lower return.

Generally, a CD rate that's above the national average is a solid choice. Before deciding if a CD is worth it, compare accounts from multiple banks and see which one offers the highest rate for the term length you want.

Is now a good time to lock in a CD?

CD rates are the highest they've been in years. So yes, it's a good time to put your money in a CD. However, you'll want to be careful about choosing a term length that's too long. The Fed has indicated that it isn't done raising rates, and chances are that CD rates will continue to go up. So if you do lock your money into a CD, aim for a term of two years or less.