Finding the Best CD Rates
One way to save and grow your money is to use a certificate of deposit (CD) account. These low-risk banking products essentially lock your money up for a specific period of time in exchange for an interest rate. CDs are offered at many financial institutions, including banks and credit unions, with their APYs typically being some of the strongest. To help you sift through the many options, SmartAsset did the research and put together this list of the best CDs on the market right now.
| Bank | APY | Minimum Deposit | Highlights |
|---|---|---|---|
Marcus by Goldman Sachs  Read More | 1.85% | $500 |
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Ally Bank  Read More | 1.50% | $0 |
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Barclays  Read More | 1.85% | $0 |
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Synchrony  Read More | 1.50% | $2,000 |
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TIAA Bank  Read More | 1.60% | $5,000 |
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Sallie Mae Bank  Read More | 1.45% | $2,500 |
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| Marcus by Goldman Sachs Read More | 1.90% | $500 |
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| Ally Bank Read More | 1.50% | $0 |
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How We Determine the Best CD Accounts
SmartAsset analyzed more than 150 CD accounts to create this list. We determined the best CD options based on each of their current APYs and minimum deposits, as well as the customer service of the bank that offers them. Other factors we considered in our analysis were how many other products the bank offers and whether they allow CD laddering.
Best 1-Year CD Account: Marcus by Goldman Sachs
The 12-month CD from Marcus by Goldman Sachs is worth taking a look at if you have less than $10,000 to invest. In fact, with a minimum opening deposit of just $500 for this Marcus CD, the account is an option even for those with less than $1,000 to invest. Although some banks, like Capital One, manage to offer CDs without a minimum deposit attached to them, this $500 requirement is definitely on the low side for the vast majority of U.S. financial institutions.
Furthermore, Marcus by Goldman Sachs offers CDs for every term period starting from six months to six years. This makes the creation of a CD ladder extremely manageable and easy. You can also open a competitive online savings account, giving you a convenient place to transfer your money after a CD matures.
Where Marcus struggles compared to TIAA Bank and other major competitors is in its customer service. While the bank recently introduced a mobile banking app for Apple devices (with an Android version on the horizon), its customer support is only available 14 hours a day during the week and 10 hours a day on the weekends. Under certain circumstances, this could make for a frustrating experience if you need help immediately.
Best 1-Year CD Account With No Minimum: Ally Bank
Ally Bank has become known in the online banking space for its high interest rates and low fees and minimums. Its various CD offerings meet that reputation, with competitive rates on certificates of deposit range from three months to five years in length. Ally’s 1-year CD may be the crown jewel of this collection, with a 1.50% APY that you won’t need to meet a minimum to acquire.
To incentivize you to renew your CD when its term is up, Ally will provide you with a 0.05% APY loyalty reward. This rate is subject to change depending on a number of factors, so check with Ally before you renew to see what you could be in line to receive.
As an online-only bank, Ally customers will have to manage their accounts via the bank’s mobile app and website. Ally also operates a 24/7 phone support line, so you can call a representative if you have questions about anything.
Best 2-Year CD Account: Barclays
Barclays has its roots in London, but it offers a selection of savings and CD accounts to U.S. customers as well. Its 2-year certificate of deposit is especially competitive, with a 1.85% APY that compounds on a daily basis. Unlike many other major financial institutions, Barclays does not have a minimum deposit for its CD products, making them accessible for just about anyone.
Aside from its 2-year CD, Barclays has eight other certificates of deposit that you can pick from. So if you’re interested in creating a CD ladder for yourself, this bank would be a solid choice. Barclays’ Online Savings Account is quite exceptional too, as it carries a 1.60% APY, no minimum and no monthly fees.
Many people like to keep all of their bank accounts consolidated at a single bank or credit union. For these individuals, Barclays might be a tough sell. While its CD and savings accounts are fantastic, Barclays currently doesn’t offer any checking or money market accounts.
Best 2-Year CD/Savings Account Combination: Synchrony Bank
The 2-year CD at Synchrony Bank comes with a 1.50% APY. Account holders will find this CD is great to combine with a Synchrony High Yield Savings account, which is why we consider this to be the best CD/savings account combination of any offering we analyzed for this list. This is because the Synchrony High Yield Savings Account currently has a 1.50% APY, so your money can continue to grow further.
After your funds mature in the CD account, they are very easy to transfer over to your savings account. In fact, the bank allows its customers to transfer funds between their internal accounts through the online banking website and mobile apps for both Android and Apple devices.
The $2,000 account minimum for this CD is also well below average for 2-year accounts. That makes this account this an attractive option if you do not have a lot of capital to invest. You will likely also have a good customer experience at Synchrony. More specifically, the bank offers 24/7 support via an online chat system, as well as a hotline to speak with someone over the phone.
Best High-Balance 2-Year CD: TIAA Bank Yield Pledge CD
TIAA Bank has become prominent in the banking space, and its certificates of deposit definitely don’t disappoint. You’ll have a total of 10 terms to pick from at TIAA Bank, ranging from three months in length to five years. None of its CDs have a monthly fee. Additionally, TIAA Bank will alert you 20 days before the maturation of your CD to see if you want to withdraw your funds or roll them over into another account.
When comparing the APYs of TIAA Bank’s multiple CDs to other financial institutions, its 2-year Yield Pledge CD specifically jumps out. This account has a 1.60% APY on balances up to $1M and a $5,000 minimum. The “Yield Pledge” part of its name refers to TIAA Bank’s Yield Pledge promise to provide a yield in the top 5% of Competitive Accounts, based on research it completes on a weekly basis. This doesn’t make your rate variable, but rather it ensures that whenever you open, renew or roll your money into a TIAA Bank CD, you can be confident you will be receiving a great rate.
Best 3-Year CD Account: Sallie Mae Bank
The APYs attached to Sallie Mae Bank’s term lengths of less than a year are good, but once you go beyond that tier, interest rates get significantly stronger. Sallie Mae’s 3-year CD rate of 1.45% is particularly competitive.
Although many financial institutions provide enough certificates of deposit to create an adequate CD ladder, Sallie Mae is an exceptionally great option. That’s because the bank provides 11 different CD term lengths that allow you to space your income out from six months to five years.
Minimums are fairly common with certificates of deposit, as some banks have requirements of $10,000 and up. Sallie Mae’s $2,500 minimum is fairly low by comparison, though some savers may still have trouble hitting that minimum.
Best 5-Year CD Account: Marcus by Goldman Sachs
Marcus by Goldman Sachs is a force in the certificate of deposit landscape, as is evidenced by the fact that it appears in SmartAsset’s rankings twice. The bank’s 5-year CD is perhaps its best account offering, as its 1.90% APY and negligible $500 minimum deposit are among the best choices currently available on the market. Beyond this 5-year CD, Marcus provides CD terms of six months to six years.
If you’re having trouble scrounging up the money to fund your Marcus CD, the bank will give you a 10-day window following your account’s opening to meet the $500 minimum. Should you miss this requirement, your rate will end up being whatever Marcus is offering on the date your account hits a $500 balance.
Like Barclays, Marcus is a savings-centric financial institution. Therefore, you cannot open a checking or money market account through the bank. This means you’ll have to go to another bank or credit union to have your checking needs taken care of.
Best Bump-Up CD: Ally Bank Raise Your Rate CD
Ally’s bump-up certificate of deposit is an account that functions like a normal CD, but allows the account holder to increase their APY during the account’s term if rates rise. So if you own an Ally Raise Your Rate CD, and the interest rate that’s offered for your account goes up, you can initiate a rate increase to take advantage of that benefit. Note that you can only use this option once during the term of your CD, so if rates start to rise, you’ll need to decide the best time to pull the trigger.
This CD comes in two term length variations: 2-year and 4-year. In both cases, the starting APY is 1.50%. There are no minimum initial deposits for either account, meaning you can take advantage of them regardless of how much you have to invest. Again, there is a 0.05% APY loyalty reward waiting for any Ally customers that renew their CD to another Ally CD.
Once your account’s term matures, you’ll have a 10-day window to withdraw your money. Otherwise, it will be reinvested into the same CD again.
Is a CD the Right Choice for You?
Certificates of deposit (CDs) are a worthwhile investment when market conditions are right. However, you must also be in a solid financial state if you're able to lock up your money for an extended period of time. CDs can be a safe way to grow money, but you must be comfortable not having access to the funds for the duration of the account's term. CDs are worth it when the following circumstances apply:
• Interests rates are high, and you don't expect them to rise significantly over the course of the CD's term.
• You have extra money sitting in a bank account.
• You already have a separate emergency fund in place.
• You are trying to save up for something big, like a home or car, and want to earn a good return without market risk.
• You are looking for ways to grow money without the temptation of spending it.
In low interest rate markets, CDs are less enticing because returns are often fairly miniscule. As interest rates rise however, CDs become a much more attractive method of investing money.
Another advantage of a CD is that your starting rate is guaranteed. Therefore, you cannot lose money with a CD (though you could lose accrued interest if you withdraw money early). This is as opposed to investing in equities and other securities, where you can end up losing your investment if things go poorly. CD deposits also have the backing of FDIC insurance, up to $250,000. So if your banking institution were to fail, you would still be covered.
CDs are a solid option if you have extra money sitting in your accounts, as long as said account is not your emergency fund. Excess cash that is either not accruing interest or accruing low interest could likely be better served in a CD. The fee associated with withdrawing from a CD before the maturity date also acts as a strong deterrent from spending the money you're saving. It makes CDs ideal for anyone trying to save up for something in the long-term.
What CD Term Should You Go With?
It’s important to create a clear set of savings goals when determing the correct CD term for your needs. Opening up a CD and having to withdraw from it early can mean you lose money, so don't open one unless you're sure you won't need the money until the term is up. The penalty can also be great enough where you could have ended up earning more in a liquid savings account, so don't discount the fact that maybe a CD is no the right option at all. You need to be honest about your finances and what your short- and long-term objectives are before committing to a term.
If your goal with a CD is just to grow money in a safe environment, then building a CD ladder with multiple accounts of varying lengths may be the optimal way to go. Laddering $10,000 across five accounts spanning one- to five-year terms can yield you about $1,200 after five years. In comparison, reinvesting $10,000 in a 1-year account for five years (which gives you the same liquidity as the ladder) would yield you about $300 less over the same time frame.
If you have a more focused goal in mind, like saving up for a car or home, you need to determine when you would like to make those purchases and pick the appropriate term. It’s a good idea to consider your job stability in your decision as well. Investing a significant amount of money in a 5-year CD could put you in a bind if you end up needing liquidity before the account matures.
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