CD rates are on the rise, and many banks are offering terms that last less than a year. Just a few minutes spent searching for the best CD rates could earn you extra money for months or years to come.

Because CDs generally pay a fixed interest rate over a specified period of time, finding higher CD interest rates rate today will continue to pay off for you over the life of that CD.

Learn more about CDs and how they work, compare rates, and find the best CD accounts.

Which Banks Have the Best CD Rates?

Hundreds of banks offer CDs, and there’s fierce competition among them to offer the best rates. Use our MoneyRates CD rate-finder tool below to sort through the list to find a CD that fits your financial goals.

Best Certificate of Deposit Accounts

CD rates at some banks are on the rise. As a result, several banks have unveiled new CD products to reflect rising interest rates. Here are some of the best we found.

Bread™

Best for a good selection of maturity dates

Bread has just unveiled some new CD rates in a variety of timeframes and has raised rates several times to coincide with the Federal Reserve raising rates. As the Fed continues to raise rates, Bread is worth watching to see what new, higher rates it will continue to offer.

What makes it one of the best: You’ll find some great rates on Bread’s CDs that range from one to five years, along with a better-than-average savings account APY as well.

Read our Bread™ review

Brio Direct

Best short-term rates

Brio has consistently offered great CD rates, but the online bank’s latest rates really deserve a second look.

What makes it one of the best: If you can’t tie up your money for a long period of time, Brio is worth a look. The shorter-term rates offered by Brio, including a nine-month CD, offer rates that are higher than the national average.

Marcus by Goldman Sachs

Best high-yield CD

Marcus is another bank that has bumped up the APYs on its CD offerings recently. This is another bank to watch for raising CD APYs as the Fed continues to bump up rates.

What makes it one of the best: Some short-term CD APYs have been increased by a percentage point, while some longer-term CDs are now offering over 4%.

Read our Marcus by Goldman Sachs review

Ponce Bank

Best CD with a low initial deposit

While several banks offer good CD rates, the opening deposits required can keep many people from being able to put their money into one.

What makes it one of the best: Ponce Bank makes CDs attainable for people who don’t have $1,000 or more to open a CD account. You can start with a low starting amount and then add to your account.

Read our Ponce Bank review

Ally Bank

Best variety 

From its no-penalty CD to its raise-your-rate CD and its high-yield CD, Ally Bank offers a wide variety of CDs for consumers who need flexibility in how they manage their money.

What makes it one of the best: You could have some leeway in withdrawing money before the maturity of your CD and even getting a higher rate if rates go up within 10 days of opening your account.

Read our Ally Bank review

Current CD Rate Trends

CD rates started to fall after seeing a slow rise a few years back. They began falling in 2019 and fell even faster after the coronavirus pandemic struck. Right now, they are on an upswing, which is great news for consumers who want to start putting money away.

The best CD rates for one- and five-year CDs continue to be much better than the average in each category. This makes it well worth shopping around for the best CD rate you can find.

Typically, online CD interest rates are higher than rates available from CDs at traditional, branch-based accounts.

MoneyRates.com studies have found this rate advantage applies to one-year and five-year CD rates, but you can expect it to also be true of all CD lengths.

12-month CDs Are Competitive

Lots of banks are offering one-year CDs, and they want your business. Banks, credit unions, and online banks are making their 12-month CDs very competitive by unveiling some of the highest interest rates we’ve seen on them in some time. 

The rising interest rates some banks are offering on their one-year CDs are good news whether you have $500, $5,000, or $50,000 because one year is a short amount of time for most people to tie up money that they can earn over 3% or even higher interest on. 

Look for banks to continue wanting to offer the best rates on their 12-month CDs, and consider buying a few of them at varying times to lock in some great interest rates. 

Long-term CD Interest Rates on the Rise

While CD interest rates have dropped steadily since the 1980s, they have been rebounding in recent times. While some banks have failed to raise their rates as a result of interest rates going up, others are unveiling some great CD offers. 

Because interest rates are on the rise, you should continue to watch CD rates and consider laddering your CDs to continue to reap the benefits of higher interest rates. 

Choices for Consumers 

Despite the reduced reward for choosing a long-term CD, a falling rate environment might encourage you to choose longer CD terms if you can afford to commit your money for a longer period of time.

CD laddering is a technique you can choose to get some benefit from the best CD rates while still having a portion of your money become available at regular intervals.

Times, when interest rates are changing, make it especially important to shop around before you open a CD account.

When rates are on the move, banks offering CDs adjust their rates at different times and by different amounts. That can change where the best CD rates are to be found.

Looking ahead, there is not much room for rates to fall further.

The Federal Reserve has indicated it has not ruled out raising rates again in the near future in order to protect the economy from inflation.

How CDs Work

Unless you are already familiar with CDs, understanding a little about how they work might help you choose the CD that has the best CD rates for you.

CD Interest Rates, Terms, and Minimum Balance Requirements

A CD is a deposit instrument that requires you to commit to keeping your money in the account for a specified period of time. In return, the bank will typically agree to pay you a fixed interest rate for that length of time.

Some banks vary their CD interest rates depending on how much you deposit. In such cases, you have to meet a minimum balance requirement in order to qualify for the advertised rate.

A reward for committing your money for a specified period of time is that CDs generally pay higher interest rates than savings accounts or money market accounts. In most cases, the longer you commit to a CD, the higher the interest rate will be.

• The length of time you agree to commit your money for is known as the CD term.
• The date at which that term expires is known as the maturity date.

Can You Cash In Your CD at Any Time?

CD terms come in a variety of lengths, with the most common ones offering the best CD rates ranging from as little as one month to five years or longer.

If you want to take money out of the CD before the maturity date, you will usually have to pay an early withdrawal penalty.

That early withdrawal penalty is important to consider before you lock your money up in a CD.

While a longer commitment is an opportunity to earn more interest, it also limits your access to your money.

Having to pay an early withdrawal penalty may negate the rate advantage you gained by choosing a longer-term CD. That’s why shorter-term CDs may be a better idea for some people.

How Safe Are CDs?

CDs can be perfect for low-risk investors.

CDs offered by federally insured banks or credit unions are protected by deposit insurance.

This covers up to $250,000 worth of deposits per customer at each participating financial institution.

If you have more than one account you can only be insured for a maximum of $250,000 across all accounts. You can, however, gain more insurance coverage by spreading accounts across multiple institutions.

There are some CD products whose rates can vary under certain circumstances and a few that don’t charge an early withdrawal penalty. However, these exceptions are fairly rare.

What Should You Look for When Choosing a CD?

You could spend all day comparing CDs, but there’s a more efficient way to shop for the best CD rate.

Here’s how to narrow your search:

Select Your CD Term

The starting point for choosing a CD should be to decide how long you can afford to lock up your money. That makes it easier to compare rates based on the same CD length.

Most CDs are issued for uniform time periods such as one year, three years, five years, or longer.

Sometimes banks issue CDs with slightly irregular time periods such as 13 months rather than one year as a special promotion. These may meet your needs well enough to be included in your search.

Confirm Deposit Insurance

If you want full safety for your CD, you should limit your comparison shopping to products backed by the FDIC (Federal Deposit Insurance Corporation) or the NCUA (National Credit Union Administration).

Investigate Early Withdrawal Penalties

You should try to avoid paying an early withdrawal penalty by choosing a CD term that expires before you are likely to need to access your money. However, it’s still a good idea to compare early withdrawal penalties when choosing a CD just in case something goes wrong.

If two CDs have roughly the same term and the same interest rate, it can be a good tie-breaker to choose the one with the lower early withdrawal penalty.

Compare Fixed Interest Rates

Comparing interest rates is fairly straightforward if you are looking at CDs with the same term length.

However, make sure that the rates you are comparing are fixed interest rates for the full term of the CD.

Know the Maturity Date

Knowing the maturity date helps you confirm the length of the CD term and allows you to plan ahead for when you cash out your CD or roll it over into a new one.

Verify Minimum Balance Requirements

The MoneyRates CD rate comparison tool lets you specify the size of the CD you want to find the best CD rates based on minimum balance requirements.

This is important because you should base your rate shopping on products that are available to your account size.

How MoneyRates Tracks the Best CD Rates

Though CD rates are locked in for the term of the CD, the rates banks offer on new CD accounts can change at any time.

MoneyRates actively researches CD rates from week to week to bring you the most current information available.

Researchers for MoneyRates regularly monitor close to a thousand CD products from hundreds of financial institutions.

These CD accounts represent a range of different terms and minimum balances, giving you plenty of CDs to choose from in searching for one that will meet your needs.

Also, the rates collected by MoneyRates are sorted into different term-length categories and averages are calculated for each of those categories.

These averages are used as the basis for the interactive rate trend chart found above.

Those averages can give you some context in evaluating whether a given CD product’s rates are above or below average.

Richard Barrington has been a Senior Financial Analyst for MoneyRates. He has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications. Richard has over 30 years of experience in financial services. He has earned the Chartered Financial Analyst (CFA) designation from the Association of Investment Management and Research (now the “CFA Institute”).

Richard Barrington

Financial Analyst

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