Best CD Rates of December 2023 (Earn up to 6.50% APY)

Our experts answer readers’ banking questions and write unbiased product reviews (here’s how we assess banking products). In some cases, we receive a commission from our partners; however, our opinions are our own. Terms apply to offers listed on this page.We check CD rates daily to find the best rates for a variety of CD terms. We also have options for people who want a no-penalty CD, a unique term length, or a CD with no minimum deposit.Some national brick-and-mortar banks pay decent rates on select CD terms, but it’s rare. For example, TD Bank CD rates go up to 5.00% APY (Annual Percentage Yield) — but rates vary by location, and most of the standard CD rates pay less than the national average. Online banks and credit unions offer higher CD rates for most terms. Below are our top picks for best CD rates.Several of the best CD rates are offered by credit unions right now. But don’t worry — anyone is eligible to join these credit unions and open CDs.TotalDirectBankTotalDirectBankPopular DirectPopular DirectValley DirectFinancial Partners Credit Union (8-month term) paying 6.50% APYThe Financial Partners Credit Union 8-month CD special requires a minimum deposit of $1,000 and a maximum deposit of $5,000. To open this CD at Financial Partners Credit Union, you must be a new member of the credit union. You may be eligible for the CD if you live, work, or go to school in an eligible area in Southern California (Los Angeles County, Orange County, Riverside County, San Diego County, the City of South San Francisco, or Alameda).5.41%$1Deposits through TotalDirectBank deposit products are FDIC insured5.66%$25,0005.76%$25,0005.67%$10,0005.50%$10,0005.30%$10,0005.60%$5004.90%$0BMO is a great choice if you want a free savings or checking account. It also offers impressive checking account bonuses. But you’ll want to look elsewhere to earn high interest rates.4.90%$0BMO is a great choice if you want a free savings or checking account. It also offers impressive checking account bonuses. But you’ll want to look elsewhere to earn high interest rates.no monthly maintenance fee6.50%$1,000NoneCDs aren’t as accessible as other types of savings accounts, so keep in mind how long you can keep money in the account without potentially facing early withdrawal penalties. Also, make sure you know what steps you need to take once your CD term ends.Our top picks for CDs are protected by federal insurance. Bear in mind money is safe at a federally insured financial institution. When a financial institution is FDIC- or NCUA-insured, up to $250,000 per depositor, per account category is secure in a bank account. The Financial Partners Credit Union 8-Month Certificate Special pays the highest CD rate overall. You can earn 6.50% APY on an 8-month CD if you qualify for membership at the credit union.To open the CD special, you must live in an eligible area in Southern California (Los Angeles County, Orange County, Riverside County, San Diego County, the city of San Francisco, or Alameda, California). This promotional CD has specific opening requirements: You must deposit at least $1,000 but no more than $5,000. This offering is also only for new members.Term options: Financial Partners Credit Union also has terms ranging from 3 months to 5 years. Penalties: The early withdrawal penalty for the 8-month CD special is 90 days of interest. The SkyOne Federal Credit Union 1 Year No-Penalty CD offers the highest no-penalty CD rate at Raisin.Raisin is an online marketplace with savings accounts, money market accounts, and CDs from different financial institutions. Raisin may be appealing if you’d like to open a CD with a low minimum opening deposit. You only need $1 to get started.Raisin doesn’t have physical locations. It also won’t be the best choice if you want to do all your banking at one institution because you can’t open checking accounts.Term options: Raisin is partnered with over 30 banks and credit unions, so it has multiple terms for both no-penalty and regular CDs.Penalties: This account doesn’t have any early withdrawal penalties.Raisin ReviewA TotalDirectBank CD may be appealing if you’re searching for a 3-month or 6-month term available nationwide. TotalDirectBank CDs have a steep minimum opening deposit of $25,000 and a maximum deposit of $1 million. TotalDirectBank is the online-only division of the City National Bank of Florida. The online division doesn’t operate in Florida, Somoa, Guam, the Northern Mariana Islands, or the U.S. Virgin Islands.Term options: TotalDirectBank has terms ranging from 3 months to 5 years.Penalties: The following early withdrawal penalties may apply to TotalDirectBank CDs:Popular Direct CDs may be appealing if you have at least $10,000 and want to open a 1-year, 18-month, or 2-year terms. Popular Direct also offers one of the best high-yield savings accounts.You might prefer another financial institution if you want to deposit less than $10,000 into a CD. You also might prefer another bank if you are looking for more lenient CD early withdrawal penalties. Term options: Popular Direct has terms ranging from 3 months to 5 years.Penalties: The following early withdrawal penalties may apply to Popular Direct CDs:Popular Direct ReviewThe Valley Direct 36-Month Variable CD may be a solid choice for a 3-year share certificate if you are comfortable getting a CD where the interest rate can fluctuate. Valley Direct’s variable CD rate can go up or down during the term. That said, the rate stays 0.1% above the Federal Funds Target Rate Upper Limit, and any changes occur on the first business day of the month.  The Valley Direct 36-Month Variable CD has a $500 minimum opening deposit and a maximum deposit of $500,000. It is an FDIC-insured bank account, so up to $250,000 per depositor, per category is secure. Anyone in the U.S. can open Valley Direct accounts, regardless of where they live in the U.S. Valley Direct CDs must be opened online. You won’t be able to open a Valley Direct CD at a Valley National Bank branch.Term options: Valley Direct has a 36-month variable CD as well as 12-month and 24-month fixed-interest CDs.Penalties: At Valley Direct, the early withdrawal penalties are as follows: BMO Alto CDs offer competitive interest rates, especially for 4-year and 5-year terms. You also might like these CDs if you want to open an account with $0. That said, you have to deposit funds within 10 days of opening your account or it will be closed. BMO Alto is an online-only division of BMO Bank. You can open a high-yield savings account or CDs. Term options: Terms range 6 months to 5 years.Penalties: BMO Alto charges the following early withdrawal penalties on CDs:BMO Alto Savings and CD AccountsThe highest-paying CD is the 8-month certificate special from Financial Partners Credit Union, which pays 6.50% APY. This CD special is only for new members and permits a $5,000 maximum opening deposit. To become a member and open a CD, you must live, work, or go to school in select areas in Southern California (Los Angeles County, Orange County, Riverside County, San Diego County, the City of South San Francisco, or Alameda).Yes, several financial institutions have CDs paying 5.00% APY or more. Some examples include (but are not limited to) Raisin, Popular Direct, and TotalDirectBank.Yes, a few local institutions pay 6% interest on CDs, including City Credit Union, Financial Partners Credit Union, and more. But these credit unions have membership requirements and are usually limited to people who live in a certain area.You cannot lose money in a CD if you leave it untouched for the full term length. It is like a locked savings account and the only way you can lose money is if you make an early withdrawal for which you are penalized.When choosing a CD term, you’ll want to consider the timeline of your goal. That said, not many financial institutions offer 10-year CDs, and the rates for short-term CDs are actually better than long-term CDs right now. You could build a CD ladder if you want to diversify your CDs and open multiple terms for more flexibility.Timing matters. CDs can be a good investment if interest rates are currently high and/or expected to fall. The biggest benefit of a CD is your ability to lock in a fixed interest rate. If interest rates fall during the term of your CD, the APY on your CD will not be affected. Conversely, if rates are expected to rise, then it may not be a good time to put money in a CD.Yes, interest earned on CDs is taxable. Banks send a 1099-INT form and you report CD interest in your annual tax return.From January 2023 to October 2023, the highest 3-month CD rates increased from 4.61% to 5.46% APY, according to data from the Federal Reserve Bank of St. Louis. Rates have increased on most terms throughout the year, but potential rate fluctuations will depend on what the Federal Reserve does.In early 2024, experts predict CD rates will be on par with current rates. However, CD rates are likely to drop in 2024 when the Federal Reserve starts cutting rates.Below, you’ll find our picks for the best CD rates right now. There isn’t one particular CD that will work for everyone, but we combed through offerings at around a dozen national banks to find the strongest options available right now.These weren’t chosen as our top CDs, but you still might find some of these options appealing depending on your preferences.We consulted banking and financial planning experts to inform these picks and provide their advice on finding the best CDs to use for your money. You can read their insights at the bottom of this post.Here’s what they had to say about CDs. (Some text may be lightly edited for clarity.)What makes a CD good or not good?Mykail James, MBA, certified financial education instructor, BoujieBudgets.com:”You always want to look at how much money you need to start up. And then if you can continuously add money in. Also, check not just what the interest rate is, but how often they pay out interest, whether it’s monthly or quarterly.”How should someone choose a CD term length?Roger Ma, certified financial planner with lifelaidout® and author of “Work Your Money, Not Your Life”:”I would think about when you need the money and then compare that with what the prevailing CD rates are, and then what makes sense from a financial perspective, but also from your own personal timing perspective.”Mykail James, CFEI: “I believe in having a plan for whatever the funds are. If it’s supposed to be a house fund, and you want to wait for another two years to buy a house, that’s what you should be thinking of when you want to have this money.”How should someone decide whether to put their money in a high-yield savings account, money market account, or CD?Tania Brown, certified financial planner at SaverLife:”So I guess we’ll start off with how much money you want to put in and the level of transactions you want to have. If you want to have any transactions, that automatically takes out CDs. Then you’re stuck between the high-yield savings and the money market account.”Sophia Acevedo, certified educator in personal finance, banking reporter, Personal Finance Insider:”Generally, I think a high-yield savings account or money market account could be good options for an emergency fund or short-term savings goals. A high-yield savings account offers a higher interest rate than traditional savings accounts at brick-and-mortar banks. Meanwhile, money market accounts might be worth considering if you want more account accessibility — several offer paper checks, ATM cards, or debit cards. CDs could be worthwhile if you don’t need access to some of your money, since they have a fixed interest rate for a specific term.”Methodology: How We Chose the Best CDs Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high Annual Percentage Yield (APY), for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don’t have to.We reviewed CD offerings from over three dozen national banks using our CD methodology. All banks included on our list are FDIC-insured and do not impose monthly maintenance fees on CDs.In the event two banks offered the same APY on a CD product, we considered factors like the minimum deposit requirements and early withdrawal penalties.

Source