Cassidy Horton is a finance writer covering banking, life insurance and business loans. She has worked with top finance brands including NerdWallet, MarketWatch and Consumer Affairs. Cassidy first became interested in personal finance after paying off $18,000 in debt within 10 months of graduating college. She later went on to triple her salary in two years by ditching her 8-to-5 job to write for a living.
Cassidy Horton
Cassidy Horton is a finance writer covering banking, life insurance and business loans. She has worked with top finance brands including NerdWallet, MarketWatch and Consumer Affairs. Cassidy first became interested in personal finance after paying off $18,000 in debt within 10 months of graduating college. She later went on to triple her salary in two years by ditching her 8-to-5 job to write for a living.
With more than 15 years of experience crafting content about all aspects of personal finance, Michael Benninger knows how to identify smart moves for your money. His work has been published by Intuit, Insider and the Los Angeles Times, and he's been quoted by The Street and Yahoo Finance among other news outlets. Prior to his role at Forbes Advisor, Michael worked as a banking writer for Finder.com, where he authored in-depth reviews of hundreds of banking products.
Fact Checked
Michael Benninger
With more than 15 years of experience crafting content about all aspects of personal finance, Michael Benninger knows how to identify smart moves for your money. His work has been published by Intuit, Insider and the Los Angeles Times, and he's been quoted by The Street and Yahoo Finance among other news outlets. Prior to his role at Forbes Advisor, Michael worked as a banking writer for Finder.com, where he authored in-depth reviews of hundreds of banking products.
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
While you may find certificates of deposit with terms of 10 years or longer, the five-year CD is the most commonly available longer-term certificate. By choosing a five-year CD, you’re committing to the interest or dividend rate on offer for that extended period. Certificates with five-year terms often pay high APYs in exchange for the longer commitment.
Read More
Show Summary
Best 5-Year CD Rates May 2024
We’ve compared 142 CD accounts at 84 nationally available banks and credit unions to find some of the best five-year certificates available. See below to learn more about why we picked each account, the pros and cons, and to access individual bank reviews.
Annual percentage yields (APYs) and account details are accurate as of May 7, 2024.
Best for Credit Union CDs
PenFed Credit Union Money Market Certificates
CD APY 60-month
3.50%
Minimum Deposit Requirement
$1,000
Interest Compounding Frequency
Daily
Learn More
On Bankrate.com's Website
3.50%
$1,000
Daily
Editor's Take
At 3.50% APY, PenFed Credit Union pays one of the highest dividend rates available on a five-year certificate. You can open this account with a fairly modest $1,000 minimum deposit. And be assured: Despite having “money market” in the name, this is a share certificate, not a money market account.
PenFed offers nine different certificate terms, from as short as six months to as long as five years. It has a highly rated mobile app and gets excellent customer satisfaction scores. You can join PenFed Credit Union by opening a savings account with an initial deposit of $5.
You choose your maturity option with PenFed when you open your certificate, and you can change it at any time before maturity. This means you’ll have some flexibility in deciding what to do with the funds in your account before it matures. You can use the funds to renew your certificate, transfer the funds into another PenFed account or have a check mailed to you.
Read our full PenFed Credit Union Review.
Pros & Cons
- Competitive dividend rates across terms
- Wide range of certificate terms
- Change your maturity option at any time prior to maturity
- Dividends compounded daily on certificate terms greater than six months
- Highly rated mobile app
- Membership is required to open a certificate
- Early withdrawal penalties can be steep
- Must open a savings account to access certificates
Details
Compounding schedule
The yields earned on credit union accounts are referred to as dividends rather than interest. Dividends on six-month certificates are earned on a simple (not compound) interest basis and are paid when the certificate matures. Dividends on all other CDs are compounded daily and credited monthly.
Early withdrawal penalties
Early withdrawal penalties vary by term.
Maturity options
With PenFed, you choose your maturity option when you open your certificate and can change it anytime prior to maturity. This gives you some flexibility, and extra time, to decide what you’d like to do with the funds in your account when it matures. You can transfer the funds into another PenFed account, roll it into a new certificate, get a mailed check or transfer it via ACH.
Expert's Take
PenFed certificates have significantly lower rates across the maturity spectrum than others. In addition, their early withdrawal penalties are pretty onerous compared to what is standard. They’re about the most severe I have heard.
—Jill Fopiano, CEO at O’Brien Wealth Partners
PenFed Credit Union CD Rates
| Term | APY |
|---|---|
6 Months
| 3.00%
|
12 Months
| 4.20%
|
15 Months
| 4.20%
|
18 Months
| 4.20%
|
24 Months
| 4.20%
|
36 Months
| 3.60%
|
48 Months
| 3.50%
|
60 Months
| 3.50%
|
84 Months
| 3.40%
|
Best for Jumbo CDs
Connexus Credit Union Share Certificate
CD APY 60-month
3.51%
Minimum Deposit Requirement
$5,000
Interest Compounding Frequency
Quarterly
Learn More
On Bankrate.com's Website
3.51%
$5,000
Quarterly
Editor's Take
Connexus Credit Union offers competitive yields on its share certificates. The five-year share certificate earns an appreciable 3.51% APY, but you’ll need a somewhat hefty $5,000 minimum deposit to open the share certificate account. You’ll qualify for a slightly higher APY if you open a five-year Jumbo CD with a minimum $100,000 deposit.
Connexus requires membership to open a share certificate and it’s pretty easy to join. If you do not meet other group or geographic requirements, you can become a member of the credit union by making a one-time $5 donation to the Connexus Association. You also are asked to open a Connexus savings account, with a minimum deposit of $5.
Connexus also provides a mobile app that receives high ratings on both the App Store and Google Play for those who want to manage their savings while on the move.
Read our full Connexus Credit Union Review.
Pros & Cons
- Competitive rates on its share certificates
- Highly rated mobile app
- No checking or savings account required to open a share certificate
- $5,000 minimum deposit required to open
- Dividends compounded quarterly
Details
Membership
You must become a credit union member to open a certificate with Connexus Credit Union. If you don’t qualify under the regular group and geographic categories of membership, you can join the credit union by making a one-time $5 donation to the Connexus Association.
Compounding schedule
Yields earned on credit union accounts are referred to as dividends rather than interest. At Connexus, dividends are compounded and credited to your account quarterly. Many other banks compound interest daily and pay it into your account quarterly, allowing your funds to grow faster than if they were held at Connexus.
Early withdrawal penalties and grace period
Early withdrawal penalties range from 90 to 365 days’ worth of dividends on the amount withdrawn. Share certificates automatically renew at maturity, following a 10-day grace period during which you can withdraw funds. All members are required to open a Connexus Credit Union Member Share Savings Account with a minimum deposit of $5.
Expert's Take
The biggest difference with Connexus is that it’s a credit union, not a for-profit bank. It offers certificates with competitive rates, but the higher minimum could exclude those with less cash. The interest on longer time frames drops off quite a bit, but it compares to some others on the list. This credit union’s emphasis on member service and community involvement may resonate with individuals seeking a personalized banking experience.
—Gloria Garcia, CFP®
Connexus Credit Union CD Rates
| Term | APY |
|---|---|
12 Months
| 5.01% or 5.06% APY*
|
24 Months
| 4.63% or 4.68% APY*
|
36 Months
| 4.21% or 4.26% APY*
|
48 Months
| 3.91% or 3.96% APY*
|
60 Months
| 3.51% or 3.56% APY*
|
*Higher rates are for deposits of $100,000 or more.
Best for CD Laddering
Quontic Bank Certificate of Deposit
CD APY 60-month
4.30%
Minimum Deposit Requirement
$500
Interest Compounding Frequency
Daily
Learn More
On Quontic Bank's Website
4.30%
$500
Daily
Editor's Take
Quontic Bank’s 60-month CD pays a very competitive 4.30% APY. It has a relatively low minimum deposit requirement of $500 and the interest earned compounds daily.
You’ll find five CD terms at Quontic, ranging from six months to 60 months, all paying competitive interest rates. Because the minimum opening deposit is $500, Quontic CDs are also great for laddering. Laddering is a strategy where you open several CDs with different terms so they mature at staggered intervals, allowing you to access cash regularly.
Being primarily an online bank, Quontic also offers innovative online and mobile tools, allowing you to manage your CD account from anywhere at any time. Quontic’s mobile app is available on both iOS and Android.
You can fund your CD by transferring money from an existing Quontic account, from another bank via ACH transfer or by using Plaid technology.
Read our full Quontic Bank Review.
Pros & Cons
- Competitive APYs across CD terms
- Innovative online and mobile tools
- Low minimum deposit requirement
- Open an account online within minutes
- Only offers five term options
- Quontic doesn’t accept cash deposits
Details
Interest compounds daily and is credited monthly. Once your CD matures, Quontic Bank provides a 10-day grace period to withdraw your funds. Otherwise, it automatically renews the CD. Early withdrawal penalties vary by term.
Expert's Take
Some of the benefits of Quontic CDs are the low minimum to open an account and the ability to quickly get started online. The drawback of using digital banks like Quontic is that you don’t have access to physical branches. If you prefer the in-person banking experience or need to deposit cash, this could be a deterrent. It’s also good to note that you don’t necessarily earn a higher interest rate for locking up your money longer.
—Gloria Garcia, CFP
Quontic Bank CD Rates
| Term | APY |
|---|---|
6 Months
| 5.05%
|
12 Months
| 4.50%
|
24 Months
| 4.50%
|
48 Months
| 4.40%
|
60 Months
| 4.30%
|
Best for High Rates
First National Bank of America Certificates of Deposit
CD APY 60-month
4.55%
Minimum Deposit Requirement
$1,000
Interest Compounding Frequency
Quarterly
Learn More
On Bankrate.com's Website
4.55%
$1,000
Quarterly
Editor's Take
First National Bank of America’s five-year certificate of deposit pays a highly competitive 4.55% APY. And the minimum deposit requirement to open a CD is a reasonably modest $1,000.
The bank also offers six other CD term lengths, from 12 months to 84 months, that pay competitive rates.
For those interested in banking on the go, the First National Bank of America mobile app is available for both iOS and Android. Although only a small number of App Store and Google Play ratings are shown, those ratings are very high.
Read our full First National Bank of America Review.
Pros & Cons
- Competitive APYs across CD terms
- Offers 72-month and 84-month CDs
- Relatively low minimum deposit requirement
- Highly rated mobile app
- Interest compounded quarterly
- It’s possible to find higher rates on some CD terms at other banks and credit unions
Details
Rates
- 6 months: 3.05% APY
- 12 months: 5.15% APY
- 24 months: 4.80% APY
- 36 months: 4.65% APY
- 48 months: 4.55% APY
- 60 months: 4.55% APY
- 72 months: 4.35% APY
- 84 months: 4.30% APY
Rates and CD options may differ slightly for Michigan residents.
Compounding schedule
Interest is compounded and credited to your account quarterly.
Early withdrawal penalties and grace period
The early withdrawal penalty ranges from 90 to 540 days of interest, depending on the term length. The bank provides a notice approximately 30 days before the CD matures, at which time you can decide to withdraw your funds, automatically renew your CD or rollover your funds to a different CD.
Expert's Take
High long-term yields on First National Bank’s CDs may be suitable for those looking to lock in earnings over extended periods. However, quarterly compounded interest rates (versus monthly compounded rates) and high early withdrawal penalties may be drawbacks.
—Wenyao Hu, CFA and Ph.D. Candidate
First National Bank of America CD Rates
| Term | APY |
|---|---|
6 Months
| 3.05% APY
|
12 Months
| 5.15% APY
|
24 Months
| 4.80% APY
|
36 Months
| 4.65% APY
|
48 Months
| 4.55% APY
|
60 Months
| 4.55% APY
|
72 Months
| 4.35% APY
|
84 Months
| 4.30% APY
|
Rates and CD options may differ slightly for Michigan residents.
Best for Low Minimum Deposits
Bethpage Federal Credit Union Certificate Account
CD APY 60-month
3.00%
Minimum Deposit Requirement
$50
Interest Compounding Frequency
Daily
Learn More
On Bankrate.com's Website
3.00%
$50
Daily
Editor's Take
Choosing to lock in an interest rate for five years is a decision to be made carefully. The Bethpage five-year certificate earns 3.00% APY. So, if you believe this interest rate will hold up across the five-year period, this could be a good savings vehicle for you as a safe place to stow some savings for a longer-term goal.
Bethpage Federal Credit Union’s Certificate Accounts pay competitive dividends and have a very low $50 minimum deposit. (The minimum balance to earn APY is also $50.) Bethpage offers nine standard certificates, ranging from three months to five years.
You can manage your certificate account online or via the mobile app. Becoming a member of Bethpage Federal Credit Union is easy, too. Simply make a $5 deposit into a Bethpage savings account.
Read our full Bethpage Federal Credit Union Review.
Pros & Cons
- Competitive dividend yields across terms
- Wide range of terms
- Very low $50 minimum deposit requirement
- Fairly easy to join
- It’s possible to find higher rates at other banks and credit unions
- Must open a savings account to access certificates
- Requires membership
Details
Compounding schedule
The yields earned on credit union accounts are referred to as dividends rather than interest. For certificates opened online, dividends are compounded daily and credited monthly. Members who open a six-, 12-, 24-, 36- or 39-month certificate in a branch can select a dividend period and crediting frequency of monthly or quarterly.
Maturity options
There’s a seven-day grace period after your certificate matures to renew or change the account.
Early withdrawal penalty
Early withdrawal penalties equal either 90 or 180 days’ dividends, depending on term length.
Summary: Best 5-Year CD Rates of 2024
Methodology
To create this list, Forbes Advisor analyzed 142 CD accounts across 84 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. For the star rating, we ranked each institution on 11 data points within the categories of APY, minimums, compound interest schedule, customer experience, digital experience, available terms and overall availability. We also analyzed and ranked each institution by individual term.
The following is the weighting assigned to each category:
- APY: 50%
- Customer and digital experience: 20%
- Minimum deposit requirement: 12.5%
- Compound interest schedule: 7.5%
- Availability: 5%
- Available terms: 5%
CD accounts with higher APYs rose to the top of the list. Minimum deposit requirements of $10,000 or higher affected scores negatively. Accounts with daily compounding interest schedules were scored higher than those with monthly or quarterly schedules. To appear on this list, the account must be nationally available.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.
Current 5-Year CD Rates
The current national average rate for a five-year CD is 1.39% as of April 15, 2024, according to the FDIC. This represents the average across all banks and credit unions that provide data. However, many of the best five-year CDs offer rates several times greater than this.
How To Find the Highest 5-Year CD Rates
To find the highest five-year CD rates, don’t just look for banks and credit unions that claim to beat the national average. Truly competitive certificate accounts will pay interest rates far above this, making the average APY a less-than-helpful point of comparison.
Instead, compare current rates between the institutions featured on this list and any others you know you like to work with. You can also use our Best CD Rates list to see available APYs and learn the advantages and disadvantages of different banks. Most banks offer CD terms of up to five years.
Pro Tip
For any account you’re considering, make sure you’re comfortable with the minimum deposit requirement and early withdrawal penalty. If you deposit more than you can afford to lock up for the entirety of the CD term, an early withdrawal penalty could eat into your earnings.
How 5-Year CD Rates Performed Over The Years
Here’s a look at how rates on 5-year CD rates have performed since 2010.
Source: FDIC
What Is a 5-year CD?
A five-year CD is a certificate of deposit that keeps your money locked up for five years, or 60 months. CDs typically offer higher interest rates than savings accounts and other types of deposit accounts, making them a good option if you want to grow your money. However, they also require you to leave your cash in the account for the entire term, which can be a drawback if you need to access your money before the CD matures.
CDs are FDIC-insured, which means your money is protected up to $250,000 if the bank fails. They are also relatively low-risk investments, which can be appealing to risk-averse investors.
How Does a 5-Year CD Work?
When you open a five-year CD, you agree to deposit a set amount of money into an account and leave it there for five years. In return, the issuing bank promises to pay you interest at a guaranteed rate. The interest might be compounded daily, monthly, quarterly or annually.
At the end of the five years, the CD matures, and you get back your original deposit plus the interest earned. Alternatively, you can reinvest your principal and earnings by allowing the account to renew for another term. If you decide to withdraw funds before five years are up, you’ll likely pay an early withdrawal penalty and lose some of the interest you’ve accumulated.
Who should open a 5-year CD?
A five-year CD could be a good fit for someone who has a lump sum of cash that they know they won’t need to access for a significant period of time. You can potentially earn more in interest on your funds with a five-year CD than in a traditional savings account at a brick-and-mortar bank.
Pros and Cons of 5-Year CDs
A five-year CD is a substantial commitment. Before you invest in a long-term CD, it helps to understand the pros and cons of locking up your funds for such a considerable period.
Pros
- Higher yields. Compared to shorter-term CDs, five-year CDs offer some of the highest CD rates available.
- No access to your money. If you want to remove the temptation to tap your savings for an extended period, a five-year CD term can be a useful tool. You’ll generally face a hefty early withdrawal penalty if you feel the itch to make a withdrawal.
Cons
- No access to higher APYs. If certificate of deposit interest rates rise during your five-year CD term, you could miss out on earning a higher interest rate on your funds.
- Early withdrawal penalties. Early withdrawal penalties can be steep. An emergency could force you to tap your five-year CD and cost you dearly.
Key Factors to Consider Before Opening a 5-Year CD
Opening a five-year CD is a big commitment, so be sure to acknowledge the necessary factors before choosing an account.
- Balance requirement to earn the maximum APY. Ensure you can meet the minimum balance requirement to earn the best APY. Otherwise, you might earn less than expected.
- Minimum deposit for opening. Some CDs require a certain minimum deposit to open the account. So even if you have money set aside for a CD, you may not be able to open the account with the highest APY.
- Time. Five-year CDs are time-deposit accounts, so you must give up access to your funds for five years to collect the advertised interest. Be sure you’re willing to lock your funds away for the entirety of the term. If you withdraw funds early, you’ll sacrifice some or all of your earnings.
- Adding funds. Standard CD accounts don’t allow additional deposits after account opening, but some add-on CDs do. If you want the option to deposit funds throughout your CD term, search online for add-on CDs.
How To Choose a 5-Year CD
With a five-year CD, you’re looking at a longer-term investment, so you want to be sure that the fixed APY on offer is sufficient to make it appropriate to tie up your funds for five full years, unless you’re willing to risk incurring an early withdrawal penalty. As with any CD, consider:
- APY. With a five-year CD, you’re taking on a higher risk that interest or dividend rates could increase during the term of the CD. Is the APY being offered sufficient to give you confidence in investing at that rate for a five-year period?
- Compounding schedule. To receive the best return on your investment, look for interest or dividends to be compounded on a daily basis, rather than monthly or quarterly.
- Safety. Look for financial institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). In the event of a bank or credit union failure, your deposits would be insured for up to $250,000 per account for each account ownership category.
- Early withdrawal. A very important factor, especially with a longer-term certificate, is the CD’s early withdrawal penalty. If you need to access your money before the five years are over, the early withdrawal penalty could decrease your interest or dividend earnings. Some banks impose withdrawal penalties that could not only reclaim any interest earned but also reduce your principal balance.
- Term. Can you manage your household finances without access to these funds for the full five years? If it’s likely that you’ll withdraw funds before the CD’s maturity date, a savings account or money market account may be a better savings choice.
Pro Tip
When creating a CD ladder, keeping your CDs with the same bank can be convenient, but it can also cause you to miss out on better yields. Traditional CD ladders include CD terms from one to five years, and you should take the time to find the best rates for each (especially the five-year CD, which will take the longest to mature).
Alternatives to 5-Year CDs
If you’re thinking a five-year CD isn’t for you, here are a few other options to consider:
- High-yield savings account. High-yield savings accounts may not earn as much as the best five-year CD rates, but you can access your money when you need to—up to six times per month, in some cases. So a high-yield savings account may be a good trade-off if you don’t want to lock your money away.
- Money market account. A high-yield money market account is similar to a high-yield savings account. But it typically comes with check-writing privileges and a debit card, giving you even more ways to access your cash.
- Bonds. A bond can be a good alternative to a five-year CD if you want a low-risk on-ramp to the stock market. But they’re not federally insured like CDs, so they could lose value.
- Treasury Inflation-Protected Securities (TIPS). TIPS are a type of government bond designed to keep up with inflation. They generally pay interest every six months. You can invest in TIPS through the Treasury Direct website or by buying them inside of an ETF or mutual fund.
Recap: Best 5-Year CD Rates
- First National Bank of America Certificates of Deposit: 4.55% APY
- Quontic Bank Certificate of Deposit: 4.30% APY
- PenFed Credit Union Money Market Certificates: 3.50% APY
- Connexus Credit Union Share Certificate: 3.51% APY
- Bethpage Federal Credit Union Certificate Account: 3.00% APY
Find The Best CD Rates Of 2024
Are 5-year CDs worth it?
Lauren Graves, deputy editor at Forbes Advisor, says:
“The answer depends on your financial and savings goals. If you already have enough savings in an emergency fund and are most concerned with keeping money at a safe distance to resist the temptation to spend, a five-year CD could be a fit. However, when interest rates are high, you might be better off laddering your CDs. With a CD ladder, you’ll have multiple CDs that mature at different times, freeing up cash in regular intervals and letting you take advantage of the highest rates for each term.”
Banks We Monitor
These financial institutions were included in our research for the best jumbo CD rates: ableBanking, Affinity Federal Credit Union, Ally Bank, American Express, Axos Bank, Apple Federal Credit Union, Bank of America, Bank5 Connect, BankDirect, BankPurely, BankUnitedDirect, Barclays, Bethpage Federal Credit Union, Bread Savings (formerly Comenity Direct), BrioDirect Banking, Capital One, Charles Schwab Bank, Chase, Chevron Federal Credit Union, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Credit Union of Denver, Discover, Dollar Savings Direct, EmigrantDirect, Financial Partners Credit Union, Financial Resources Federal Credit Union, First National Bank of America, Georgia’s Own Credit Union, Golden1 Credit Union, Greenwood Credit Union, HSBC Direct, Hughes Federal Credit Union, Ideal Credit Union, iGoBanking, Investors eAccess, Keybank, Kinecta Federal Credit Union, Limelight, Live Oak Bank, MAC Federal Credit Union, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My eBanc, MySavingsDirect, Navy Federal Credit Union, nbkc Bank, Northern Bank Direct, Northpointe Bank, Nuvision Federal Credit Union, Pacific National Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Quontic, Quorum Federal Credit Union, Radius Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Spectrum Federal Credit Union, State Bank of Texas, State Department Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, EverBank, TotalDirect Bank, U.S. Bank, USAA, USAlliance Federal Credit Union, Vio Bank, Virtual Bank, Wells Fargo and Truist.
Frequently Asked Questions (FAQs)
What is a CD?
A CD, or certificate of deposit, is a time deposit account. A bank or credit union holds your money in a CD or certificate for a set term and offers fixed interest earnings or dividends in return. At maturity, your principal investment is returned to you plus the interest earned.
Before you lock up your savings in a CD or certificate, consider the pros and cons of using a CD for your savings. In exchange for a guaranteed rate, you also commit your funds for a fixed period of time. When choosing a CD or certificate, look at the available maturity terms, minimum deposit requirements, APY, early withdrawal penalties and online and mobile banking access.
What is the best 5-year CD rate?
Some of the best five-year CD rates are mentioned above, though you may find even more competitive rates at credit unions. Note, however, that many credit unions have strict membership requirements, so the majority of Americans will be ineligible to earn the advertised APYs.
Who has the best CD rates right now?
Forbes Advisor’s Best CD Rates Of 2024 ranks CDs that have attractive APYs and other features. The institutions on that list have some of the best CD rates right now, many of which are online banks and credit unions.
Are CDs safe?
Yes, so long as you deposit your money with a bank insured by the Federal Deposit Insurance Corporation (FDIC) or a credit union insured by the National Credit Union Administration (NCUA), CDs are safe places to put your money that will not be subject to market risk.
CDs are insured by the FDIC at banks for up to $250,000 per depositor, per bank, for each account ownership category, in the event of a bank failure. The NCUA insures certificates for up to the same amount at federal credit unions and most state-chartered credit unions.
How do I know if a CD or certificate is right for me?
Do your homework. Banks and credit unions offer a wealth of information on their personal banking services via their websites, apps and customer service support that may include both live humans and automated chat. Forbes Advisor’s CD Calculator can help you compare options and potential savings outcomes. Just enter the initial deposit amount, APY, term and compounding frequency to see how your money will grow over time.
Which are better—short-term CDs or long-term CDs?
As is true with any investment, your best CD is the one that aligns best with your savings goals and financial needs. A shorter-term CD or certificate may give you more flexibility, in that you can access your money sooner without risking an early withdrawal penalty. A longer-term CD may offer enhanced growth opportunities, such as a “bump-up” in the applicable interest rate.
When comparing a short-term CD vs. a long-term CD, pay attention to the specifics of your situation, including what you’ll be using these savings for and when you may need or want to access them.
How high will 5-year CD rates go?
There’s no way to predict for sure how high five-year CD rates will go. Right now, First National Bank of America has one of the best five-year CD rates at 4.55%. If the Fed raises interest rates in the future, five-year CD rates could increase again. But rate increases are never guaranteed, and CD rates can change at any time.
