Best CD Rates — Earn Up to 5.00%
Compare today's top CD rates and find the right account to help you earn a competitive return on your savings.
As inflation rises, where you store your cash matters more than ever. This is why, if you're looking to allocate some of your money outside the market, a CD could be a smart solution.
With a CD, you deposit money for a specified term. That term can range from three months to five years. If you need to end the term early, your bank will charge an early termination fee.
CDs are an appealing option because they force you to commit to saving money. Best of all, CD rates are outpacing inflation; using them wisely can help you save for future goals and earn a healthy return.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What are the top-earning CD rates?
A benefit of CDs is that you can choose a term that aligns with your savings goal. Say you're saving for a home down payment in five years; you could choose a five-year CD to help you meet it.
CDs also offer shorter terms. This is ideal if you're not looking to tie up your cash for long but want to earn a higher rate without fear of stock market slumps.
Moreover, for savers with larger deposits (think $50,000 or more), a jumbo CD can be a smart option. You'll earn APYs as high as 5.00% and have access to your money in a year. In turn, you can earn thousands of dollars effortlessly.
Here's a look at some of the top-earning CDs for each term:
Account |
APY |
Min Deposit |
Term |
4.00% |
$1,000 |
3 months |
|
4.25% |
$5 |
6 months |
|
4.60% |
$1,000 |
1 year |
|
4.55% |
$1,500 |
2 years |
|
4.60% |
$500 |
3 years |
|
4.65% |
$1,500 |
4 years |
|
5.00% |
$500 |
5 years |
|
4.60% |
$100,000 |
12-month jumbo CD |
Pros of using CDs
Here are a few of the many benefits gained when using them:
- You earn a guaranteed return
- They feature fixed rates, so if the Fed cuts rates, you won't have to worry about diminishing earnings
- Many accounts offer FDIC insurance
- They require discipline to reach your savings goals, since early termination penalties are high
CDs carry ample perks. If you would like to try one out, use this Bankrate tool to find personalized CD terms and rates for your needs:
What are some cons to consider before opening one?
CDs are not the most flexible savings options. Keep these things in mind before committing to one:
- Returns are lower historically than what you could earn in investments.
- They feature steep early termination fees of up to a year of earned interest for longer-term CDs
- You won't have access to your cash until your term expires
If you want to try one out but are concerned about not having access to your cash, a no-penalty CD is a smart alternative. These CDs offer all the benefits of a regular CD, but with the flexibility to withdraw your money when you need it.
Usually, you'll need to keep your cash in the account for the first week or month after opening it. Then, each bank has its own rules for withdrawing. Some allow you to do it all at once, while others limit you to one withdrawal each statement.
When should I use a CD instead of a high-yield savings account?
Your financial goals and cash flow will help you decide which works best for your needs. Typically, if you have a specific, timed spending event and if you already have a healthy emergency fund, a CD is a wise decision. To demonstrate, if you have an emergency fund in a savings account and want to save for a vacation in one year, a one-year CD is a smart option.
Why? Because you'll reserve those funds for your vacation, and you already have money stored away in case of an emergency. This makes it less likely you'll need to break open the one-year CD, so you can stay on pace to reach your goals.
However, if you require regular cash access, then a CD isn't the best fit. Instead, consider a high-yield savings account, as you'll have access to your cash when you need it, without worrying about early termination fees. Once you build an emergency fund, you can allocate future savings toward CDs.
How much can I earn with CDs?
How much interest you earn on a CD depends on your initial deposit, APY and term length. Generally, the more you deposit and the longer you leave your money in the account, the more interest you can earn.
For example, depositing $10,000 into a one-year CD earning 4.60% APY would generate $460 in interest. Here's how much you could earn with the same deposit across different CD terms using some of the competitive rates listed above.
CD term |
APY |
Interest earned |
6 months |
4.25% |
$210.29 |
1 year |
4.60% |
$460.00 |
3 years |
4.60% |
$1,444.45 |
5 years |
5.00% |
$2,762.82 |
Calculations assume a $10,000 deposit, no withdrawals and interest remaining in the account until maturity. Actual earnings may vary.
If you deposit more money, potential earnings can be significantly higher. For example, depositing $100,000 into a 12-month jumbo CD at CreditOne Bank at 4.60% APY could earn about $4,600 in interest.
Before opening a CD, consider how long you can comfortably leave your money untouched. And set a reminder before your CD matures so you have time to compare current rates and decide whether to renew or move your savings elsewhere.
Protect your cash from inflation
With inflation at 3.70%, if you're not storing your cash in an account earning at least that much, you're losing purchasing power. Choosing one of these CDs can help you shelter your cash from inflation while helping you reach your savings goals.
Related content
