Best CD Rates: 3 Month To 5 Year Terms (Nationwide), February 2023

We’ve researched thousands of the top banks in the nation and have compiled a guide to help everyone find the best CD rates.

Certificates of Deposit are going to give you the best return on your savings when investing with banks or credit unions. Online Banks are going to be the best option for most.

Our Top Banking Guides:

What You Need To Know About CDs

What is a Certificate of Deposit? 

They are basically deposit accounts where you earn a fixed interest rate over your chosen term length. The significant difference with CDs compared with Checking accounts or Savings accounts is that you cannot access your money without penalty, until the term is over.

Why Choose CDs Over Checking/Savings Accounts? 

The bottom line is, CDs will give you higher interest rates than traditional Checking and Savings accounts. Some banks and credit unions have high-yield Checking and Savings accounts though, don’t they? Yes, but these Rewards Checking accounts usually have Direct Deposit and minimum transactions requirements to keep up with. And for even the best Savings accounts, the interest rates are only competitive up to 12 month term CDs. For terms greater than 12 months, CDs typically take the lead.

Are CD Accounts Insured? 

Yes, up to $250,000 per account (Member FDIC insured for banks and NCUA insured for credit unions)

Special Requirements For CDs 

The beauty of CDs are that they are low maintenance. You choose a term length, deposit at least the minimum required, and let your interest accrue. You MUST keep up with when your CD matures (or expires), because most banks will automatically renew the CD at the end of the term. Be sure to set up a calendar reminder, because you’ll only have a short window of time to cancel after the term is over.

Biggest Disadvantage Of CDs

The biggest disadvantage to CDs is you don’t have access to your money. While you can access your money before your term ends, this will incur penalty fees. Since the best rates are for CD terms greater than a year, you’ll have to tread carefully if you’re not 100% sure you can afford to set the money away.

Read more: Compare CDs vs Money Money Accounts vs Savings Accounts…

“CD Laddering” Tactic

There is one neat strategy you can employ with CDs called “CD Laddering” when you’re unsure about putting away a big chunk of your savings for the long term. It involves setting up multiple CDs with differing term lengths. Doing this will allow you more access to your funds.

Here’s how it all works:

Here’s a typical scenario where CD Laddering can come in handy. Let’s say you’ve got $10,000 you’d like to invest in a CD. While looking for the best CD rates, you find that a 5-year CD earns double the interest of a 1-year CD. However, you’re unsure you can put away that entire $10,000 for a long 5 years.

With CD Laddering, rather than putting the entire $10,000 into one 5-year CD, you put $2,000 into 5 different CDs (i.e. 1,2,3,4,5-year CDs). What happens in this scenario is each of the CDs will earn a different amount of interest, with the 5-year CD likely earning the most. Additionally, each CD will expire with every passing year. Once the 1-year CD expires, you can decide to either withdraw the money if you need it, or re-invest it into a new 5-year CD. With each passing year, you’ll be able to make this decision with each expiring CD. Once 5 years have passed, assuming you’ve re-invested all the expired CDs, all of your CDs are then essentially 5-year CDs that are earning that higher interest.

Since you’ll have access to a part of your cash with each passing year without penalty, many people like taking this approach. This was just one example, you can vary the CD terms and amounts of deposits according to your own particular needs.

To go even further with this strategy, consider mixing CD terms from different banks that will yield you the highest combination of rates.

Here Are The Best CD Rates Available Nationwide

Online banks give the best rates, are easy to open online, and are available nationwide.

*APY = Annual Percentage Yield

*Disclaimer: Our team updates these rates regularly, but there can be periods of delay. Always confirm current rates directly with the bank.