CD rates vary by bank and change weekly, so the "best" rate depends on your term length and how much you deposit
No single bank always offers the highest CD rates. Banks adjust their rates based on what the Federal Reserve does, how much cash they need to attract, and whether they're competing for deposits in your region. A bank offering 5.25% on a one-year CD might offer only 4.80% on a five-year CD, while another bank does the opposite. The rate you see today will be different next week.
The highest rates right now are usually at online banks and credit unions, not at the big national banks you see on every corner. Online banks have lower overhead costs, so they pass some of that savings to depositors. Credit unions are member-owned, which means they sometimes prioritize competitive rates over profit margins. Regional banks also compete aggressively for deposits in their service areas.
To find the best current rates, you need to check multiple sources and compare the same term length across banks. A rate comparison site like Bankrate, DepositAccounts, or NerdWallet updates rates daily and lets you filter by term. You can also call banks directly or visit their websites—the rate on the website is the one you'll actually get.
Key Takeaways
- Online banks and credit unions typically offer higher CD rates than large national banks because they have lower operating costs and different business models.
- The highest rate for a one-year CD is not the same bank offering the highest rate for a five-year CD, so compare the specific term you want.
- CD rates change weekly or even daily, so a rate that was best last month may not be best this week.
- Rate comparison sites like Bankrate and DepositAccounts show current rates from dozens of banks, but always verify the rate on the bank's own website before opening an account.
Online banks typically have the highest rates because they don't operate physical branches
Online-only banks like Marcus by Goldman Sachs, Ally Bank, and American Express Personal Savings have been leading on CD rates for the past several years. They don't maintain branch networks, which cuts their costs significantly. That money gets passed to depositors in the form of higher rates.
Marcus, for example, has offered rates in the 4.75% to 5.35% range depending on the term, though these rates fluctuate. Ally Bank has been competitive in the same range. American Express Personal Savings has also offered rates above 5% on certain terms. These banks are FDIC-insured just like traditional banks, so your deposit is protected up to $250,000.
The trade-off is that you cannot walk into a branch to deposit cash or speak to someone in person. All transactions happen online or by phone. If you're comfortable managing your money digitally and don't need in-person service, online banks are usually your best bet for rate shopping.
Credit unions often compete with online banks on rates and may offer better terms to members
Credit unions are member-owned financial institutions, and many of them offer CD rates that match or beat online banks. Connexus Credit Union, Pentagon Federal Credit Union, and Connexus have all offered rates above 5% on various terms. The rates vary by credit union and by which members they serve—some are open to the general public, while others require membership in a specific group or employer.
Credit unions are insured by the National Credit Union Administration (NCUA), which works the same way as FDIC insurance: your deposit is protected up to $250,000. Some credit unions also offer slightly higher insurance limits if you structure your account in certain ways, though this is less common.
To find credit union rates, search for credit unions in your state or industry on the CO-OP Network or Shared Branch locator. You can also check rate comparison sites, which now include many credit unions alongside banks. If you're already a member of a credit union, ask them about their current CD rates before shopping elsewhere—member loyalty sometimes comes with small rate bonuses.
Regional and community banks may offer competitive rates in their service areas
Large national banks like Chase, Bank of America, and Wells Fargo typically offer lower CD rates than online banks and credit unions. Their rates are often in the 4.0% to 4.75% range, sometimes lower. However, some regional banks and community banks offer rates closer to what online banks charge, especially if they're competing hard for deposits in a specific area.
Banks like Vanguard Bank, Investors Bank, and various local credit unions sometimes offer rates above 5% to attract deposits. These rates are usually available only to people in their service area or to existing customers. If you have a relationship with a regional bank, it's worth asking what CD rates they offer before you assume you need to go online.
The downside of regional banks is that their rates can be harder to find and compare. You may need to call or visit in person to get a quote. If you're willing to do that legwork, you might find a competitive rate without moving your money to an online bank.
How to compare rates across different banks and terms
Start by deciding what term length you want—three months, six months, one year, three years, five years. Then go to a rate comparison site and filter by that term. Write down the top five rates you see, along with the bank name and any minimum deposit requirement. Most banks require $500 to $2,500 to open a CD, though some have no minimum.
Next, visit each bank's website directly and confirm the rate is still current. Rates on comparison sites can lag by a day or two, and banks sometimes change rates overnight. Look for any fine print about rate locks, early withdrawal penalties, or special terms for new customers.
Check the FDIC or NCUA insurance status of each bank or credit union. You want to make sure your deposit is insured. If you're depositing more than $250,000, you'll need to split it across multiple banks or use special account structures to keep it all insured.
Watch for rate locks and early withdrawal penalties when comparing offers
Some banks lock in your rate for a set period before the CD matures, while others allow the rate to change. A rate lock means the bank guarantees your rate for the full term, no matter what happens to market rates. This is the standard, and it's what you should expect. If a bank doesn't mention a rate lock, ask before you open the account.
Early withdrawal penalties vary widely. Some banks charge a flat fee—say, $25 or $50. Others charge a penalty equal to a certain number of months of interest. A one-year CD with a three-month interest penalty means if you withdraw early, you lose three months' worth of the interest you would have earned. On a CD earning 5%, that could be $125 on a $10,000 deposit. Read the penalty terms before you commit your money.
A few banks offer "no-penalty" CDs, which let you withdraw your money without losing interest. These rates are usually lower than standard CDs—often 4.0% to 4.5%—because the bank is taking on more risk. If you think you might need the money before the term ends, a no-penalty CD might be worth the lower rate.
Frequently Asked Questions
Do I need to have an existing account at a bank to open a CD there?
No. Most banks let you open a CD without having a checking or savings account with them. You can open a CD online or by phone, and the bank will set up whatever accounts they need to hold the CD. Some banks offer small rate bonuses if you also open a checking account, so ask about that when you apply.
What happens to my CD when it matures?
When your CD reaches its maturity date, the bank will either automatically renew it at the current rate or deposit the money into a linked savings account. Check your CD agreement to see which option your bank uses. If you don't want to renew, you can withdraw the money without penalty once it matures. If you miss the renewal window and the bank renews automatically, you usually have a grace period (often 7 to 10 days) to withdraw without penalty.
Can I move money between CDs at different banks to chase higher rates?
Yes, but you'll pay an early withdrawal penalty if you break a CD before it matures. If the new rate is significantly higher, the penalty might be worth it—do the math first. Some people use a CD ladder strategy instead, opening multiple CDs with different maturity dates so money becomes available gradually without penalties.
Are online bank CDs as safe as CDs at big national banks?
Yes. Online banks are FDIC-insured the same way as Chase or Bank of America. Your deposit is protected up to $250,000 whether the bank has branches or not. The FDIC insurance is what matters, not the bank's size or how many locations it has.
What if a bank's rate drops after I open my CD?
Your rate is locked in for the full term. If the bank lowers its rates the day after you open your CD, your rate stays the same. This is one of the main benefits of a CD—you know exactly what you'll earn for the entire period.