Best Certificates of Deposit (CDs) in Iowa for 2025
- CDs let you earn a guaranteed interest rate for a set period.
- Banks can charge early withdrawal penalties if you take money out of your account before your CD matures.
- Iowa banks and credit unions offer competitive rates, but online banks are also worth a look.
- When comparing CDs, consider the rates, maturity terms and minimum opening deposit requirements.
Certificate of deposit (CD) accounts are designed to help you grow your money for a set term. Once your term ends, you can roll your savings into a new CD or use them to fund one of your financial goals.
When opening a CD or savings account, Iowa residents can choose from local banks, credit unions, or online banks. Learn which Iowa banks offer the best CD rates now.
Best CD Rates in Iowa
Popular Banks and Credit Unions in Iowa
1. Bank Iowa: Bank Iowa is a community-focused bank that offers plenty of CDs with solid rates. You can open a standard CD with as little as $500, while special CDs, which offer the highest rates, require $5,000 to open.
2. Dubuque Bank & Trust: Dubuque Bank & Trust makes the list of best CD rates in Iowa thanks to its special 8-month CD option. You’ll need $1,000 to open this account at a branch; online account opening isn’t available.
3. Luana Savings Bank: If you’re looking for long-term CDs, you’ll find them here. Luana Savings Bank offers CDs with terms up to 8 years, and all CDs require $2,000 to open. Rates are competitive across the board.
4. Veridian Credit Union: Veridian Credit Union offers standard CDs that require a $1,000 opening deposit, and jumbo CDs that have a $100,000 opening deposit minimum. Veridian is great if you want to open a CD for teens or kids, since these accounts earn the highest CD rates overall.
Online Banks Offering CDs
You might consider opening a CD account with an online bank if you’re comfortable banking from your laptop or mobile device. Here are a few things to know about online CD accounts.
Higher interest rates: Online banks usually have lower overhead costs than traditional banks. That means they can afford to pay higher CD rates to savers, which is more interest for you.
Low minimum deposits: You may need less money to open a CD account at an online bank vs. a traditional bank or credit union. Some online banks have no minimum deposit requirement at all.
Low or no fees: Online banks may be more fee-friendly than brick-and-mortar banks. The biggest fee to watch out for is an early withdrawal penalty, which may apply if you take money from a CD before maturity.
Quick account setup: Opening a CD account online is usually quick and easy. You’ll fill out the application and share your bank account details to make your opening deposit.
FDIC insurance: The FDIC insures banks so that if one fails, depositors can get their money back. Most online banks are FDIC-insured, just like brick-and-mortar banks.
Mobile app convenience: If you’re opening a CD online, you need to be able to manage your money. Online and mobile banking help you stay connected on the go.
Find the Best Online CD Rates
Which online banks have the best CD rates? Here are four possibilities you might consider.
1. Bread Savings: Bread has CD terms ranging from 3 months to 5 years, with the best rates reserved for the 6-month CD account. You’ll need $1,500 to open a CD here, which is higher than what some online banks require.
2. Ponce: Ponce Bank offers CDs with terms from 1 to 60 months, including a special 7-month CD that earns an excellent rate. The minimum deposit is $500 to $1,000; the amount you’ll need depends on which CD term you choose.
3. Western Alliance Bank: Western Alliance Bank partners with Raisin to offer CD rates that surpass some of the best online banks. You’ll need just $1 to open your account, which is great if you don’t have a lot of cash to deposit.
4. Ally Bank: Ally Bank lets you choose from several different types of CDs, including a no-penalty CD that allows you to take money out early without a fee. None of Ally’s CD products has a minimum deposit requirement.
Who should consider an online CD? You might prefer them if you’re comfortable managing your money online and don’t necessarily need branch banking access. Comparing online CDs to CDs at Iowa banks can help you decide which one is right for you.
Factors to Consider When Choosing a CD in Iowa
We’ve profiled some of the best banks in Iowa for CD savers, but it’s helpful to do your own research. Here are a few things to keep in mind as you shop around for CDs.
Interest Rates
Iowa CD rates are on par with what you can find offered in other states and online, though some banks pay more interest than others. Check out rates at banks in your local area, then compare them to banks in other parts of the state to see where CD rates are the highest.
Term Length
Your choice of CD term makes a difference since you want to give your money enough time to earn some decent interest, but you don’t want to lock it in longer than you need to. Look at how rates correspond to different term lengths at any Iowa banks you’re considering.
Minimum Deposit
Opening deposit requirements can vary from one bank to the next. Some banks may have no opening deposit requirement, while others might expect you to have $1,000, $10,000 or even $100,000 to get started with CDs.
Accessibility
If you’re leaning toward a local bank, look at where its branches and ATMs are located. If you’re considering an Iowa credit union, ask about shared-branch banking. This feature can let you access your CD savings at other credit unions that are part of a shared network.
Pros and Cons of CDs
There are a lot of things to like about CDs, but they may not work for everyone. Here’s how the pros and cons measure up.
Pros
- CDs offer fixed rates so you can easily predict how much interest you’ll earn.
- You may earn a higher rate with a CD than a high-yield savings or money market account.
- Your rate will not change during your CD term, so you won’t have to worry about it going down.
- CDs are a safe and secure way to save, without the risk that other investments carry.
Cons
- You’ll need to be comfortable locking your money in for a certain time.
- Taking money from a CD early could trigger a withdrawal penalty, costing you some or all of the interest earned.
- CDs tend to offer a lower return rate than stocks or other investments.
- Changing interest rates make CDs less attractive for long-term savings.
CDs Can Give Your Savings a Boost
CDs can help you diversify your savings and grow your money if you’re earning a competitive rate. You might open one CD or build a ladder that includes multiple CDs with different maturity terms. Ready to level up your savings strategy? Compare the best CD rates available now.
FAQs
Iowa taxes CD interest, along with other forms of income. Residents pay a flat income tax rate of 3.8%. Your bank should send you a 1099 at the end of the year that shows how much CD interest you earned. You’ll use this form to complete your federal and state tax returns.
Minimum deposit requirements for Iowa CDs vary by bank. You may need a few hundred dollars or a few thousand dollars to open a CD account. If you’re building a ladder of CDs, you’ll need to be able to meet the opening deposit requirement for each account you open.
Iowa credit unions can establish membership requirements that determine who can join. Membership may be based on where you live, work, worship, or attend school. Some credit unions, like Veridian, extend membership to everyone, regardless of where they live.
