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Certificates of Deposit or CDs have one of the highest interest rates among bank accounts. “What are the best CD rates in my area?” is a common query many investors look for online. Typically, the best CD rates fall in the mid-4% for a year’s term and the mid-3% for three- to five-year terms. While CDs offer a substantial boost to savings, investors must lock up a fixed sum for a specified period.
This period is usually from three months to five years, and in return, investors receive a guaranteed interest rate for that window. High-yield CDs earn more money than high-yield savings accounts. Investors can pick from providers offering the best CD rates right now.
1. Marcus
A branch of Goldman Sachs, Marcus caters to online banking products. This also includes their vast CD lineup with terms ranging from six months to six years. Most banks set the term to a maximum of five years, but Marcus offers a six-year term option.
It offers one of the highest CD rates now, which is 4.30% APY (annual percentage yield) for a one-year CD. Its minimum investment requirement is $500, which is lower than most banks.
Marcus has two types of specialty CDs.
- Three no-penalty CD terms, including 13 months, 11 months, and seven months
- 20-month bump-up CD
Such specialty CDs are mostly rare. They also offer some perks beyond the usual CD.
- The flexibility to redeem a no-penalty CD before the maturity at no added cost.
- The potential to request a rate increase for a bump-up CD.
Marcus has zero opening or monthly fees. Upon withdrawing earlier than a standard Marcus CD, some penalties will be charged.
- The penalty is equivalent to three months’ earned interest for CD terms up to one year.
- CD terms ranging from one to five years incur a penalty of six months’ interest.
- The penalty for a six-year CD amounts to nine months’ earned interest.
These penalties are lower than those of most online banks. This is one of the top reasons to invest in the company’s CDs.
CD rates
- 1-year CD: Offers an APY of 4.30%
- 3-year CD: Offers an APY of 3.90%
- 5-year CD: Offers an APY of 3.80%
2. Alliant Credit Union
Founded in 1935, Alliant is one of the largest credit unions in the country and has solid CD rates. To become a member, consumers must agree to support Foster Care to Success, Alliant’s nonprofit partner. In return, Alliant makes a donation worth $5 on the customer’s behalf.
They have a minimum deposit requirement of $1000 for the CDs. Further, the CD terms usually range between three and five months.
Alliant does not have any opening or monthly costs. Their early withdrawal penalties are also friendlier than most banks. The penalty for a two-year or longer term CD is up to six months of dividends. But some banks charge over a year’s dividends for similar terms.
Alliant also offers jumbo and Individual Retirement Account (IRA) certificates for those looking for the best CD rates for retirees. They also have a high-yielding savings and checking account.
CD rates
- 1-year CD: Offers an APY of 4.50%
- 3-year CD: Offers an APY of 3.80%
- 5-year CD: Offers an APY of 3.65%
These are among some of the highest CD rates in the market today.
3. Bread Savings
Formerly called Comenity Direct, Bread Savings is an online-only banking division for Bread Financial. They have a lineup of online CD rates worth considering. Their CD terms usually range between three months and five years, but their minimum balance requirement is $1500, which is relatively higher than other online banks.
Fortunately, Bread Savings, like many others, has no opening or monthly fee. But they have a penalty for early withdrawal that is slightly steeper than that of other online banks.
- The penalty is approximately six months’ interest for CD terms of one to three years.
- The penalty amounts to one year’s worth of interest for CD terms of four and five years.
Bread Savings also provides a high-yield savings account, and there’s no checking account facility. Regardless, they offer one of the highest CD rates now.
CD rates
- 1-year CD: Offers an APY of 4.40%
- 3-year CD: Offers an APY of 3.50%
- 5-year CD: Offers an APY of 3.50%
4. BMO Alto
An online-only division of BMO, it operates under the BMO Financial Group. BMO Alto offers high CD rates and zero minimum opening deposit requirements, whereas most banks require deposits between $500 and $1000.
The company’s CD terms are usually between six months and five years, a standard range. All the money one puts across the divisions of BMO Financial Group counts towards the same FDIC insurance limit for one institution.
Further, BMO Alto does not charge any opening or monthly fees. They levy an early withdrawal penalty.
- For CD terms of 11 months or less, the penalty is three months’ interest.
- The penalty is six months’ interest for CD terms of one year or more.
CD rates
- 1-year CD: Offers an APY of 4.30%
- 3-year CD: Offers an APY of 3.90%
- 5-year CD: Offers an APY of 4.00%