Certificates of Deposit (also known as CDs) can be a great way to save and grow your money with very little risk.
You can generally open a CD account with a one-time deposit of as little as $500 — however, some banks don’t have a minimum deposit requirement at all. The amount you deposit is then locked in for a predetermined term and at a fixed annual percentage yield (APY) that’s often higher than what you would get from a high-yield savings account.
Before choosing a CD, it’s important to consider how soon you’ll need the deposited money, along with the terms and rates offered by different financial institutions.
We looked for and found the best CD rates for December 2021 to help you choose the right account for your savings needs.
Our Top Picks for Best CD Rates for December 2021
- Marcus by Goldman Sachs - Best for Flexible Withdrawals
- Ally Bank - Best for No-Minimum Deposits
- Discover Bank - Best for CDs with a Wide Range of Maturities
- Comenity Direct - Best for High APYs
- Navy Federal Credit Union - Best for Veterans
- Synchrony Bank - Best for Online CD
Best CD Rates Reviews
Interest rates quoted are valid as of December 16, 2021, and are subject to change. Check with each financial institution for current rates before making any investment decision.
- Offers high-yield and no-penalty CDs
- Competitive APY rates, up to 01.00%
- No withdrawal fee for no-penalty CDs
- 30-day period to fully fund your CD after opening an account
- No physical branches
- No IRA CDs
Marcus by Goldman Sachs is one of the few online banks that offers two types of CDs: high-yield and no-penalty. Both types of certificates require only a $500 deposit to open and have a 10-day CD-rate guarantee, so if the published rate increases within that time span, you can claim the highest rate.
Marcus offers fairly high returns across all CD terms. High-yield CDs start at 0.15% APY for a 6-month CD; its 5-year CD rates, on the other hand, are currently at 1.00%. No-penalty CDs also boast a pretty competitive APY of 0.45% for a seven-month period.
We like that Marcus offers the option of transferring the interest you earn from your CD principal to any Marcus Online Savings Account or an external bank account before the maturity date without penalties.
In addition, CD accounts have a 10-day grace period after their maturity date. During this period you can make changes to your plan and/or renew with different terms using their CD Maturity Center online.
- No minimum deposit required
- 0.05% loyalty reward when you renew your CD
- High-yield CDs have a 10-day best rate guarantee
- Also available as an IRA
- No penalty-CD is only available with an 11-month term
Ally Bank offers three different types of CDs: High-Yield CD, Raise Your Rate CD, and No-Penalty CD. These CDs don’t require a minimum deposit, and offer competitive APY rates and access to online banking products.
Their high-yield products have a rate of 0.15% for a 3-month CD, 0.55% for a one-year term, 0.60% for an 18-month CD, and 0.80% on a 5-year CD. No-penalty accounts are only available with an 11-month term and 0.50% APY.
The Ally Bank Raise Your Rate CD, on the other hand, gives you the option to bump up your CD’s interest rate if the APY were to increase during the term. This means you can increase your rate once or twice (depending on the term) without having to wait for their maturity dates to make changes. Do note, however, that this type of CD only offers two terms: two years and four.
Other perks include a 10-day best rate guarantee that lets you claim the highest rate offered for your term and deposit amount if it goes up during that time, and a 10-day grace period after your maturity date. You can also get a 0.05% increase in your rate as a loyalty reward if you renew your CD with Ally Bank.
- Terms from three months to 10 years
- IRA CD available
- $2,500 minimum deposit
- Doesn't offer no-penalty CD
Discover Bank is about more than just credit cards — it offers great CDs too. While most banks offer only three or four different increments, Discover offers 12 different terms.
You can choose rates of between 0.55% and 0.65% APY on terms of 12 to 24 months, between 0.70% and 0.80% APY on CDs of 30 to 48 months and 1.00% APY on a 5-year term or higher. However, you need a minimum deposit of $2,500, which may be a drawback for some.
In addition, you can set up a CD ladder, which consists of opening multiple CDs with varying maturity dates or terms (usually in monthly increments). This way you can earn interest and have more frequent access to your money, while your high-yield CDs mature.
- Highest APYs (0.65% for a 1-year CD)
- Terms from 12 to 60 months
- CD laddering available
- $1,500 minimum deposit
- Fees for paper statement requests, wire transfers and checks
Comenity Direct offers a wide range of terms and higher APY than most other banks and credit unions. Comenity also features an app for mobile check deposit and transfer funds.
Comenity's APY rates start at 0.65% for a 1-year CD and go as high as 1.10% for 5-year CDs. Interest is compounded daily and credited on a monthly basis.
Like most banks in our list, Comenity offers a 10-day grace period after the maturity date. During this period you can cash out your CD, renew it and/or change your CD term.
Aside from the typical early withdrawal fee, Comenity charges $25 for outgoing wire transfers, $15 for official check requests and $5 for paper statements. (Online statements, however, are free.) Additionally, there’s a minimum opening balance of $1,500 and a maximum of $10 million per account owner.
- Terms from 3 months up to 7 years
- 21-day grace period
- Offers Jumbo CDs
- Standard CDs require a $1,000 minimum deposit
- Membership is only available for veterans and their family members
Navy Federal Credit Union stands out from other credit unions because of its competitive rates, low minimum deposit requirements and educational online tools. It offers multiple CD accounts, including the option of share certificate accounts which have lower minimum deposits and more flexible terms.
Navy Federal standard CD rates vary depending on the amount deposited and their terms. A $1,000 CD for a three-month term earns an APY of 0.40%, while a $100K CD for the same term can earn a 0.45%. The minimum deposit for standard accounts is $1,000 and can earn up to 0.90% APY for a seven-year term.
Both share certificate accounts (EasyStart Certificate and Special EasyStart Certificate) require a minimum deposit of only $50 and let you add funds after opening the certificate. EasyStart is available for six to 24-month terms with a maximum APY of 0.50%; Special EasyStart, on the other hand, is only available for a 12-month term with an APY as high as 3.00%.
Do note that you need to be a member of Navy Federal to open these accounts, and membership is only available for members of the military (active duty, veterans, retirees, and annuitants) and their families.
- No minimum deposit required
- Terms from three to 60 months
- Offers IRA CDs
- No checking account available
Along with savings accounts and credit cards, Synchrony Bank offers some of the best rates on online CDs.
This online-only bank has terms ranging from three up to 60 months and competitive APY rates that start at 0.15% for a three-month term, 0.55% for a 12-month term, and 1.00% for a 60-month term.
You also have the option of withdrawing the interest earned during the term of your CD before the maturity date without penalty. In addition, you get a 15-day rate guarantee period during which you can claim the highest available interest rate if the published rate increases.
A drawback is that Synchrony doesn’t offer a checking account, which means you have to fund your CD via an electronic transfer from an external bank, a Synchrony Bank High-Yield Savings account or a Money Market Account. This applies to transfers of interests earned as well.
Other Companies We Considered
As part of our research to find the best CD rate, we looked at an array of companies offering Certificates of Deposit. The following list includes some of the companies we reviewed but that didn’t make the final cut though we still consider them noteworthy.
- No minimum deposit requirement
- Interest compounds daily
- Lower APY rates for long-term CDs than competitors
- No minimum balance requirement
- Can be opened online or at a branch office
- Low APY for shorter term CDs
- Minimum opening deposit is $500
- Offers no-penalty CD (although with low APY)
- Low APY rates (0.10% for a 1-year CD)
- Online-only savings accounts offer higher APYs than most of its CDs
- No fees or minimum balance requirements
- Useful website calculator lets you know how much you'll earn
- Low APY for short-term CDs (0.20% for 1-Year CD)
- Limited selection of offers
- Wide range of terms: from 28 days to 10 years
- Nationwide presence
- Responsive customer service
- CD laddering available
- Low rates compared to competition (0.03 to 0.05% APY)
- Only two types of CDs to choose from
- Doesn't offer no-penalty CDs
- Offers Jumbo, No-Penalty and rising rate CDs
- No fees for account opening or maintenance
- Rates are below the competition's (0.30% APY for a 1-year CD)
Best CD Rates Guide
What is a certificate of deposit?
A Certificate of Deposit or CD is a lump-sum deposit that’s locked in for a predetermined period at a fixed annual percentage yield (APY).
It’s essentially a type of savings account where you deposit an amount for anywhere from three months to a five or six years. In most cases, you can’t withdraw your money during that period unless you pay a penalty, which varies from bank to bank.
In return, you receive higher returns than what you usually find in checking accounts or even in online saving accounts. (Online savings accounts are often thought to yield higher returns than traditional savings accounts.) Usually, you can only withdraw money, change the CD term or claim any higher rates the bank may be offering once the CD reaches its maturity date. Some banks, however, may offer more flexibility.
How CDs Work
- Higher minimum deposits. CDs tend to have higher minimum deposit requirements than most savings accounts, usually $500 or more. However, some banks don’t have an established minimum requirement at all.
- Fixed term lengths. Common CD term lengths at most banks range from six months up to 60 months.
- Penalties for early withdrawals. You usually can’t withdraw your money before the term is up without paying an early withdrawal penalty fee. However, some banks allow you to withdraw interest payouts without penalties.
- Higher APYs for longer terms. Bank CD rates vary depending on the term and the amount deposited. Generally, longer-term CDs have higher APY rates, giving you more substantial returns on your principal investment.
How APY Works
The Annual Percentage Yield (or APY) represents how much money you would earn in one year, taking into account the compounding interest.
CD accounts offer pre-established or fixed APYs, currently ranging from as little as 0.05% up to 0.90%. This means that the money you deposit into the account will earn that amount of interest monthly for the entire term of the CD.
Naturally, the higher the APY, the higher the return you’ll have when your CD matures.
The Pros of Using CDs
Great for long-term savings
CD accounts are useful saving tools for money you’re sure you won’t need until a later date. Because CD accounts have an early withdrawal penalty, it can help savers stay on track with their goals by making it difficult to withdraw money from savings too often.
Higher interest rates than most savings accounts
CDs provide higher interest rates than most high-yield savings accounts, which can make a particularly big difference when committing larger amounts to long-term CDs. This is especially so in the case of jumbo CDs, which have high minimum deposit requirements of $100,000 or more.
Because it’s not subject to the ups and downs of the stock market, a CD account can help you grow your money safely, as long as your bank or credit union is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).
The Cons of Using CDs
Early withdrawal penalty
Depending on the terms you choose, you could be locking away your money for years at a time, which makes CD accounts a less than ideal place to keep an emergency fund. You’ll have to pay a penalty if you want to withdraw the money early, and the amount of this fee varies from bank to bank.
If you sign up for a 5-year CD now, there’s a good chance that rates will rise at some point over the next few years and you could end up missing out on higher APYs. Of course, the opposite could also be true and we might see lower rates in a few months.
However, do note that, as of August 2021, we’re in a low-interest-rate environment and CDs aren’t paying out as much compared with historical rates.
Higher APYs elsewhere
You may be able to find high-yield savings accounts and money market accounts offering similar or higher APYs.
No debit card access
CD accounts usually don’t offer debit cards or ATM access. If they do, it usually involves additional fees. However, this can also work in your favor, as it reduces the temptation to tap into your savings.
What is a CD Ladder?
A CD ladder is a savings strategy that consists of spreading your money across multiple certificates of deposit (CDs) with different maturity dates — typically with a 1-year interval between each CD. The goal is to space out your maturity dates evenly so you can have access to your money more frequently and benefit from any higher interest rates available at the end of each term.
How CD Ladders Work
Long-term CDs pay higher rates than short-term CDs; however, losing access to that money for five years can be a big risk. This is where a CD laddering strategy might come in handy: you can earn money at relatively high rates while still having periodic access to your savings.
Let’s say you have $5,000 to open a new CD. Using a CD laddering strategy, you can open five certificates, each for $1,000 and each with a different maturity term.
You’d place $1,000 each in a 1-year, 2-year, 3-year, 4-year, and 5-year CDs respectively. Then, each time a CD matures, you can either withdraw the money if you need it or roll it over, with the compound interest, into a new 5-year CD. After five years, all of your money will be locked away in 5-year CDs. However, because of the staggered maturity dates, you’ll still be able to withdraw a portion of the deposited money yearly — all without paying any penalties and while benefiting from the higher yields of long-term CDs.
What Happens When a CD Matures?
When a CD reaches its maturity date, you generally get a grace period that ranges from seven to 21 days depending on the bank. During this period you can decide whether you want to open a different CD account, renew your CD or withdraw your CD money and deposit it in another bank account,
If for some reason you miss the grace period, the bank will most likely automatically renew your CD for the same term but with the current interest rate, which might be lower than your original rate. If this happens, you may have to pay a penalty fee or wait until the CD’s new term ends to get your money back.
How We Chose the Best CD Rates
To find the best CD accounts, we looked at banks offering the most competitive rates, the least amount of fees, along with online banking and mobile apps. We also took into consideration whether they offered CD Laddering, a wide variety of terms, and multiple CD types (such as no-penalty CDs, rising-rate CDs, etc.). Of course, all of our choices were FDIC-insured.