Where to find the highest CD rates today

CD rates change almost daily, and the banks offering the best rates are rarely the ones with the most branches. Right now, online banks and credit unions consistently post higher rates than traditional brick-and-mortar banks, because they have lower overhead costs. Banks like Marcus, Ally, American Express Personal Savings, and Connexus Credit Union regularly appear at the top of rate comparison lists, but the specific highest rate shifts week to week depending on market conditions and how much money you deposit.

The rate you actually receive depends on three things: the bank you choose, how long you lock your money away (the term length), and how much you deposit. A one-year CD at one bank might pay 4.50%, while a five-year CD at the same bank might pay 4.75%. Some banks offer higher rates for larger deposits—say, 5% for $100,000 or more. The only way to know which bank has the best rate for your specific term and deposit amount is to check a rate comparison site or call banks directly.

Rate comparison websites like Bankrate, DepositAccounts, and NerdWallet update their CD listings multiple times per day and let you filter by term length and deposit amount. These sites do not sell CDs themselves—they just show you what banks are offering. You then go directly to the bank's website or call them to open the account.

Key Takeaways

  • Online banks and credit unions typically offer higher CD rates than traditional banks because their operating costs are lower.
  • The highest rate available changes almost daily, so the bank in first place this week may not be next week.
  • Your actual rate depends on the term length you choose (one year, three years, five years, etc.) and how much money you deposit.
  • Rate comparison websites update multiple times per day and let you filter by term and deposit size, then you open the account directly with the bank.
  • Some banks penalize early withdrawal, so confirm the penalty before you commit—it can wipe out months of interest.

How to compare rates across different term lengths

Banks offer CDs in many different lengths: three months, six months, one year, 18 months, two years, three years, five years, and sometimes longer. The longer you lock your money away, the higher the rate usually is—but not always, and the difference varies. Right now, a one-year CD might pay 4.50% while a five-year CD at the same bank pays 4.75%, a difference of 0.25%. At another bank, the difference might be 0.50% or even smaller.

When you compare rates, look at the term you actually want, not the highest rate the bank offers. If you need access to your money in two years, a five-year rate does not help you. Most comparison sites let you pick a term length and see all banks' rates for that specific term, ranked highest to lowest. Write down the top three or four options, then check each bank's website to confirm the rate has not changed and to see what the early withdrawal penalty is.

The early withdrawal penalty is critical. Some banks charge three months of interest; others charge six months or a flat fee. If you withdraw early from a five-year CD with a six-month penalty, you lose half a year's worth of earnings. A bank with a slightly lower rate but a smaller penalty might actually be the better choice.

Online banks versus credit unions versus traditional banks

Online banks (Marcus, Ally, American Express Personal Savings, Discover) have no physical branches, which means lower rent, fewer staff, and lower costs overall. They pass some of those savings to customers in the form of higher CD rates. They are FDIC-insured, so your money is protected up to $250,000 per account type. Opening an account is entirely online, and you fund it by transferring money from another bank account.

Credit unions (Connexus, Pentagon Federal, Connexus) are member-owned cooperatives, not corporations. They often offer competitive rates and sometimes have lower early withdrawal penalties than banks. You must be a member to open an account, but membership is often free or costs a small annual fee. Credit unions are insured by the NCUA (National Credit Union Administration), which provides the same $250,000 protection as FDIC insurance. Some credit unions have shared branching networks, so you can make deposits or withdrawals at other credit unions' branches.

Traditional banks (Chase, Bank of America, Wells Fargo, Citibank) typically offer lower CD rates because they have higher operating costs and rely on branch traffic for deposits. They do offer the convenience of walking into a branch to open an account or ask questions in person. If you already bank there, you may find it simpler to open a CD with them, even if the rate is slightly lower. The difference between a 4.50% rate and a 4.75% rate on a $10,000 CD over one year is $25—worth considering, but not worth switching banks if you value convenience.

What happens when rates drop or rise

Once you open a CD, your rate is locked in for the entire term. If you open a one-year CD at 4.50% and rates drop to 3.50% the next month, you still earn 4.50%. If rates rise to 5.50%, you still earn 4.50%. This is the trade-off of a CD: you get certainty, but you give up the chance to benefit from rising rates.

When rates are rising (as they were in 2022 and 2023), many people open shorter-term CDs—six months or one year—so they can reinvest at higher rates when the CD matures. When rates are falling or stable, longer-term CDs (three to five years) lock in a good rate for longer. There is no right answer; it depends on what you expect rates to do and how long you can afford to leave the money untouched.

If you are unsure what rates will do, a CD ladder is a common strategy: open multiple CDs with different maturity dates. For example, open five one-year CDs, each with a different bank or the same bank. One matures every year, so you can reinvest it at whatever the current rate is. This gives you some flexibility without giving up the security of a CD.

Deposit insurance and account safety

All banks mentioned here are FDIC-insured, and all credit unions are NCUA-insured. This means your money is protected up to $250,000 per account type at each institution. If you have a savings account and a CD at the same bank, they are separate accounts for insurance purposes, so you are covered up to $250,000 in each. If you have two CDs at the same bank, they count as one account type, so the $250,000 limit applies to both combined.

If you want to deposit more than $250,000 in CDs, open accounts at different banks. For example, a $300,000 CD split between two banks ($150,000 at each) is fully insured. The FDIC and NCUA websites have tools to help you calculate your coverage.

Online banks are as safe as traditional banks in terms of deposit insurance. The only difference is that you cannot walk into a branch, but you can call customer service or use the website to manage your account. Fraud and hacking are rare because banks use encryption and multi-factor authentication. If your account is compromised, the bank's fraud protection covers unauthorized transactions.

How to actually open a CD at the best rate

First, decide on a term length: how long can you leave the money untouched? Three months, one year, five years? Be honest—if you might need the money in two years, do not open a five-year CD.

Second, go to a rate comparison site (Bankrate, DepositAccounts, or NerdWallet) and filter by your term length. Write down the top three banks and their rates. Check the date the rate was posted—if it was more than a few hours ago, call the bank to confirm the rate is still available.

Third, visit each bank's website and look for the early withdrawal penalty. This is usually in the CD terms or FAQ section. If the penalty is six months of interest and you might withdraw early, that bank is riskier for you.

Fourth, open the account. For online banks, this is entirely online—you provide your name, address, Social Security number, and funding source (another bank account). For credit unions, you may need to join first, which is usually free. For traditional banks, you can open online or in a branch. The account opens immediately, but the CD does not start earning interest until the bank receives your deposit, which usually takes one to three business days.

Fifth, transfer money from your checking or savings account to fund the CD. Most banks let you do this online; some require a wire transfer or a check. Once the money arrives, the CD term begins and your rate is locked in.

Frequently Asked Questions

Can I move my money out of a CD before it matures?

Yes, but you will pay an early withdrawal penalty. The penalty varies by bank and term length—it might be three months of interest, six months of interest, or a flat fee like $25. The penalty is deducted from your balance, so you may end up with less than you deposited if you withdraw very early. Check the penalty before you open the CD.

What is the difference between a CD and a high-yield savings account?

A CD locks your money away for a set term and pays a fixed rate. A high-yield savings account lets you withdraw money anytime without penalty and pays a variable rate that can change monthly. CDs usually pay slightly more because you give up access. If you might need the money within a year, a savings account is safer.

Do I have to pay taxes on CD interest?

Yes. The interest you earn on a CD is taxable income. The bank will send you a 1099-INT form at the end of the year showing how much interest you earned, and you report it on your tax return. If you earn more than $10 in interest, the bank must report it to the IRS.

What if the bank fails while I have money in a CD?

The FDIC or NCUA takes over and pays you up to $250,000 per account type. Your CD is treated as a separate account, so it is fully covered. This has never happened to a depositor at a major bank in the United States—the insurance system works.

Can I open multiple CDs at the same bank?

Yes, but they count as one account type for insurance purposes. If you open two $150,000 CDs at the same bank, you are only insured for $250,000 total, not $500,000. To insure more than $250,000, open CDs at different banks.