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Banks with Best CD Rates

The 2020 emergency rate cut by the federal reserve saw many financial institutions respond by lowering their CD rates. However, they’re still an excellent means of saving. Have some money you won’t be using anytime soon? 


Some high-yield CDs would be an excellent savings plan. In this article, we’ll exhaust everything about CDs and tell you how they can grow your money. First, here are some of the banks with the best CD rates.

  • APY
  • Min. Deposit
  • Term
Discover Bank CD
  • 0.50% - 0.60%
  • $2,500
  • 1 - 5 Years
TIAA Bank Basic
  • 0.35% - 0.65%
  • $1,000
  • 1 - 5 Years
Consumers CU
  • 0.45% - 0.70%
  • $250
  • 1 - 5 Years
  • APY
  • Min. Deposit
  • Term
PenFed CU
  • 0.50% - 0.75%
  • $1,000
  • 1 - 5 Years
  • 0.50% - 0.65%
  • $1,000
  • 1 - 5 Years
Comenity Direct
  • 0.60% - 0.90%
  • $1,500
  • 1 - 5 Years
  • APR range
  • Fees
  • Terms
  • Amounth
  • Unemployment protection
Bank 1
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No
Bank 2
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No
Bank 3
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No

Table of Contents

How CD rates are calculated?

CD rates, like we earlier noted, are locked. That implies that the bank will pay the agreed rate upon maturity regardless of the market conditions. 


While this gives you a predictable income within the agreed period, it deters you from taking advantage of even better deals should they come up.


Either way, once you find a suitable institution and agree on the principal amount, you’ll then choose a suitable term.


Each term comes with a specific APY that your income will accumulate. 


How much your CDs will earn is first influenced by how competitive your institution wishes to be. An institution with an appetite for customers will more likely offer higher rates.


Economic factors will also have an impact on your CD rates. An upward change in the financial markets will boost your rates while a downward change will do the opposite. Though the changes might not be immediate, they will eventually be affected.


Either way, be sure to compare rates from different institutions.

Hot Tip:

Longer CDs attract higher rates than short-term CDs. You’re committing to longer periods of forgoing unknown risks to save money.

What is a Certificate of Deposit (CD)?

Certificates of Deposits are similar to fixed deposit accounts. They allow you to save and earn fixed interest rates for a specified period. 


You’re not supposed to withdraw your savings before maturity. Doing so will have you pay a penalty and lose some of the accumulated interest. 


The common terms range from 3 months to 5 years. 


While growing your money, CDs will also keep it safe from the common turbulence and uncertainties associated with the stock market. 


CDs may not be the best option for everyone, especially those anticipating financial emergencies. However, they align with most people’s goals, especially those trying to grow their wealth. 

Top 5 banks with Best CD rates?

Here are some of the best banks to buy your CDs from in 2021.


Discover Bank

Discover is an online bank and a credit issuer with some of the best CD rates in the market. Their terms range from three months to 10 years.


You’ll need a minimum deposit of $2,500 to operate a CD account. This is considered somewhat high by most clients.


Withdrawing money before maturity attracts different amounts in penalty from Discover depending on the CD terms. For instance, terms less than one year will cost you a three-month interest.  


Similarly, withdrawing before maturity from a 7 to 10-year term will cost you 2 years of interest. 


You don’t need any fees to open or maintain a CD account with Discover. 

Discover also has CD products for retirement accounts, cashback checking accounts, and online savings account. What’s more, they are also highly reliable and have 24-hour customer service. 

TIAA Bank Basic

Teachers Insurance and Annuity Association of America (TIAA) bank also offers a wide range of basic CD rates. 


TIAA Bank has terms ranging from 3 months to 5 years. You’ll need a minimum deposit of $1000 to buy CDs. This is relatively lower compared to most institutions. 


Like in other institutions, withdrawal before maturity attracts a penalty depending on the CD terms. For instance, withdrawing a 3-month CD will cost you 22-day interest. While you’ll part with a 15-month interest for a 5-year CD.


Away from CDs, TIAA is a reliable online bank with functional 24-hour customer service and mobile apps so you enjoy their services from the convenience of your phone. 


TIAA also operates money market accounts, checking, and savings accounts.


Comenity Direct CD

Since its establishment in 2018, Comenity Direct has been serving as a division for Comenity Capital Bank and Comenity bank which have existed for 30 years with more than 160 active products in the US.


You need a minimum of $1,500 to operate a CD account with Comenity Direct, which is somewhat high. They have terms ranging from 1 to 5 years.


The penalty for withdrawing early depends on the term in question. And, it’s higher than what most institutions charge.


For instance, you’ll lose a 6-month interest for withdrawing early on a 1 to a 3-year term. While you’ll part with a 1-year interest for 4 to 5 year CDs. 


You don’t need any fees to open or run a CD account with Comenity Direct. Apart from CDs, Comenity Direct also offers high-yield savings accounts. 



Transportation Alliance Bank (TAB) is an online bank that traces its roots in Ogden, Utah, where its been serving since 1998, initially in the trucking industry. 


TAB offers competitive yields for CD terms ranging from 6 months to 5 years. You need a minimum deposit of $1000 to operate a CD account, which is relatively lower than other banks. 


TAB doesn’t charge any opening or monthly operating fees for a CD account. 


Withdrawal before maturity attracts penalties depending on the CD terms in question. For instance, you’ll part with a 3-month interest as a penalty for withdrawing CDs on 1-year or fewer terms. 


For terms longer than a year, you’ll pay a penalty of 6-month interest. 


Apart from CDs, TAB also offers such financial products as checking, money market, and high-yield savings accounts.


Synchrony Bank

Synchrony Bank is an online bank from the Fortune 500 company. Its best known for its many CD terms, offering up to 8 different terms for less than 2 years.


If you’re looking to hold your money on short-term CDs, these products are your best shot. You’ll enjoy more flexibility than with long-term CDs. 


You’ll need a minimum deposit of $2000 to operate a CD account, which is higher compared to many institutions. 


For early withdrawal, you’ll incur penalties depending on the term in question. For a 1-year or shorter term, you’ll pay a penalty of 3 months’ interests. A 1-4 year term will cost a 6-months worth of interest while a 5-year term will cost a year’s worth of interest. 


Synchrony also offers other products including IRA CDs for retirement-minded individuals, high-yield, and money market accounts. 


You won’t need any fees to open or operate your CDs with Synchrony Bank. Their customer service is also available 24 hours for extra convenience.

Short vs Long-term CD rates

Short-term CDs have a maturity of basically 1 year and less. Long-term CDs, on the other hand, take between 1 to 10 years, or more depending on the institution in question.


Both long-term and short-term CDs are a good way to store your cash. However, long-term CDs attract higher yields compared to short-term ones. They involve some form of risk to the saver since you’re committing your money regardless of the future uncertainties.


You’re also sure of a specific income at the end of the period regardless of whether or not there will be a fall in the financial market. Thus, guaranteeing the safety of your money and its value. 


However, on the flip side, you could miss out on better terms should there be a rise in the financial markets. 


Short-term CDs, on the other hand, boast a lot of flexibility. This will help you sort out unforeseen bills. You also have a better chance of buying CDs with better terms upon maturity of your short-term CDs.

Hot Tip:

Both long-term and short-term CDs are a good way to store your cash. However, long-term CDs attract higher yields compared to short-term ones.

Other Alternatives

If CDs don’t sound like a deal to you, here are some other alternatives you can explore:


Savings accounts

Savings accounts are good tools for saving your money. You’ll enjoy unlimited flexibility and access to your money to meet unforeseen financial needs.


Unlike CDs, savings accounts have varying interests. This can work in your favor when there’s a rise in the financial markets. However, you’ll lose, should there be a fall.

Money market accounts

These ones operate like savings accounts. You’ll enjoy lots of flexibility here, making your spending more convenient. Some institutions may even offer you checkbooks and debit cards. 

Frequently Asked Questions (FAQ)

Funds in CDs are federally secured. That means they are secured from the failures of the financial institutions you’re saving with. They are also safe from possible market falls.

Banks with the best CD rates are often ones with an appetite for more clients. The length of your CD will also determine how much you get, as well as the existing economic conditions.

Before committing to one, check out their initial deposit amount. Go for the one you can afford. Also check if they charge joining fees, or any fees for that matter, and possible penalties. But most importantly, check the interest rate.

These are CDs that allow withdrawals before maturity without penalties.

Savings and money market accounts are also excellent ways of saving your money.

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