When you open a Certificate of Deposit (CD) account, you can lock in higher interest rates than you’ll be able to receive from most savings accounts (including many high-yield savings accounts).

Today, most of the best CD rates are between 4% and 5%, down from 6% or 7% a couple of years ago. However, CD rates could continue to fall as the Federal Reserve plans to continue lowering interest rates in 2025. This means it might be a great time to lock in at the current CD rates.

Let’s look at some of the best CD rates available at banks and credit unions.

Best CD Rates for February 2025

Marcus by Goldman Sachs

Marcus, the banking branch of Goldman Sachs, launched in 2016. Since then, it has offered some of the best rates on CDs and savings accounts. Marcus offers two types of CD products: high-yield CDs and no-penalty CDs. Terms range from six months up to 72 months.

Marcus CD Rates: up to 4.30% APY

Minimum Opening Deposit: $500

Fees: There are no monthly fees, but if you withdraw money from a traditional CD before the maturity date, there will be the following penalties: For CD terms up to one year, the penalty is three months of interest. The penalty is six months of interest for CD terms of one year to five years. The penalty is nine months of interest for CD terms of six years.

Barclays

Barclays is another bank offering a high annual percentage yield on different CD terms. What’s great about Barclays CDs is that no minimum opening deposit is required. You can choose between six months and five years from CD terms.

Barclays CD Rates: up to 4.00% APY

Minimum Opening Deposit: $0

Fees: There are no monthly fees, but you will be charged a fee if you withdraw money before your CD matures. The penalty for CDs up to 24 months is 90 days of interest. For CD terms longer than 24 months, the penalty is 180 days of interest.

Bask Bank

While Bask Bank doesn’t offer as many CD terms, it has one of the highest APYs on our list. You can choose from CD terms ranging from six months to 24 months.

Bask Bank CD Rates: up to 4.65% APY

Minimum Opening Deposit: $1,000

Fees: A Bask Bank CD has no monthly fees but an early withdrawal penalty. The penalty is 90 days of interest for CD terms of six months to one year and 180 days of interest for CD terms greater than one year.

Discover Bank

In addition to a great savings account bonus and a rewards checking account, Discover offers attractive CD rates. CD terms range from three months to 10 years, and rates up to 4.00% APY.

Discover CD Rates: up to 4.00% APY

Minimum Opening Deposit: None

Fees: There are no monthly fees for a Discover Bank CD, but there are early withdrawal penalties. Below are the penalties you’ll face if you withdraw funds before the CD matures.

• Less than one year have a three-month simple interest penalty
• From one year up to four years, have a six-month interest penalty
• Four years up to five years have a nine-month penalty
• Five years up to seven years have an 18-month penalty
• Seven years to ten years have a 24-month penalty

Synchrony Bank

Synchrony Bank is another great option for the best CD rates. They offer rates up to 4.35% and CD terms ranging from three to 60 months.

Synchrony CD Rates: Up to 4.35% APY

Minimum Opening Deposit: None

Fees: There are no fees, but there are early withdrawal penalties. There is a 90-day interest penalty for CD terms of 12 months or less. For CD terms over 12 months but less than 48 months, there is a 180-day interest penalty. For CD terms of 48 months or more, there is a 365-day interest penalty.

BMO Alto

BMO Alto is the online division of the popular BMO Bank. BMO Alto CDs have great APYs and no minimum deposits. You can select CD terms from six months to 60 months.

BMO Alto CD Rates: up to 4.10% APY

Minimum Opening Deposit: None

Fees: BMO Alto does not charge fees, but they have an early withdrawal penalty. For any CD terms of 11 months or less, you will be charged a penalty of 90 days of interest. Any CD terms of 12 months or more will have a penalty of 180 days of interest.

Quontic

Quontic is an online bank with great interest rates on many of its products. You can choose from five different CD terms, ranging from six months to 60 months. Interest on Quontic CDs is compounded daily and paid out monthly.

Quontic CD Rates: up to 4.30% APY

Minimum Opening Deposit: $500

Fees: Quontic CDs do not have monthly fees, but there are early withdrawal penalties. The penalty for CD terms up to 12 months is the interest earned. For CD terms of 12 months to under 24 months, the penalty is one year’s interest. For CD terms over 24 months, the penalty is two years’ interest. 

Bread Savings

Bread Savings is an online-only bank formerly known as Comenity Direct. It offers CD terms ranging from three to 60 months and attractive APYs, including 4.50% on its six-month CD.

Bread Savings CD Rates: up to 4.50% APY

Minimum Opening Deposit: $1,500

Fees: There are no monthly maintenance fees. However, if you withdraw money before the maturity date, you will be charged a penalty. For CD terms of one to three years, the penalty will be six months of interest. CD terms over three years will face a penalty of one year’s worth of interest.

How Do CDs Work?

Certificates of Deposit or CDs are bank accounts that require locking your money in for a specific period. In exchange, you will receive a fixed interest rate at the end of your chosen CD term. This rate is frequently higher than most other bank savings products.

Also Read: Truist CD Rates

Types of CDs

Banks and credit unions offer several different types of CDs. Before setting up a CD, it’s important to understand which is best for your situation.

Traditional CDs

Traditional CDs are the most common type of CD product available. With a traditional CD, you will deposit any amount of money you choose. This money will stay with the bank for a set period (the term). In exchange, you will earn a fixed interest rate. At the end of the term, you can either cash out your funds or roll them into a new CD.

If you withdraw your money before the end of the CD term, you will most likely be required to pay an early withdrawal penalty, which can be steep.

No-Penalty CDs

No Penalty CDs have many of the same characteristics as a traditional CD, but you’re allowed to withdraw your money without penalty before the end of the CD term. Most no-penalty CDs will have a higher interest rate than you’d receive on a savings account or money market account but lower than a traditional CD.

Bump Up CD

Bump-up CDs can be a great option when interest rates rise. Since many people will be hesitant to lock their money up in a CD when interest rates could go higher, banks offer incentives to them.

For example, you might open a 36 months CD, however after the first year the Federal Reserve decides to raise interest rates. If you have a Bump Up CD, you can tell your bank you want the new higher interest rate.

The biggest downside to using a Bump-up CD is that the interest rates are generally lower than those on traditional CDs.

Jumbo CDs

Jumbo CDs require a larger deposit than many other CDs. Typically, you’ll need to deposit $50,000 or more. However, keep in mind that most CDs are insured by the FDIC or NCAU, up to $250,000.

Pros and Cons of CDs

Pros

• Higher Interest Rates: CDs will typically help you earn more interest than traditional savings or money market accounts.
• Guaranteed Returns: Because CDs have fixed interest rates, you can figure out how much you can earn over the CD term using a CD calculator.
• Safety: Like money stored in money market accounts, high-yield savings accounts, or even a checking account, CDs are protected by FDIC or NCUA insurance (up to $250,000).
• Diversification: CDs are a great way to diversify your investment portfolio.

Cons

• Low Liquidity: Unless you’re using a no-penalty CD, you won’t be able to remove your investment from the CD until the end of the term. If you do, you will incur a penalty. This illiquidity can make it difficult if you suddenly need cash.
• Inflation Risk: During periods of high inflation, the interest you’ll earn from a CD might not be able to keep up. This means that after factoring in inflation, you might actually be losing money.
• Fixed Rates: Fixed rates can be good, except when interest rates are rising. If the Federal Reserve raises interest rates during your CD term, you won’t be able to take advantage unless you have a bump-up CD.
• Opportunity Costs: Since your money is locked into a CD term, you won’t have access to the cash. If you have the opportunity to make other investments that would provide a greater return, you might not be able to take advantage of them.

How To Choose The Best CD For You?

There are a few things you need to consider to find the best CD product for your financial goals.

Determine Your Timeline and Goals

The first thing you’ll want to understand is your savings goals for this money. Are you looking to save up for a vacation or a home improvement project? Do you want the CD to go toward your retirement savings? Understanding your goals can help you choose the right type of CD and the best terms.

Compare Interest Rates

The goal is to find the best CD rates to go along with the type of CD that fits you best. To do this, you’ll want to compare the interest rates and annual percentage yield on a handful of banks to see which will be best. Typically, online banks will be able to offer better CD rates than a traditional bank or credit union.

Understand The Minimum Deposit Requirements

When comparing interest rates at different banks and credit unions, pay attention to each institution’s minimum deposit requirement. Some might allow you to open a CD with no minimum deposit, while others might require $500 or more.

Understand The Early Withdrawal Penalty

Finally, make sure you understand the early withdrawal penalty for each bank or credit union you’re considering. If you have an emergency and need to withdraw money from a CD before it matures, most banks will charge a penalty. Make sure you find a bank with a more lenient penalty.

What Do You Need to Open a CD?

Opening a CD with an online bank, traditional bank, or credit union is simple. You’ll need the following things:

• Personal Information: When you sign up for a CD, you’ll need to provide personal information such as your name, social security number, physical address, and phone number, as well as a government-issued ID.
• Minimum Deposit: Since many CDs require a minimum deposit, you must have the funds ready to deposit.
• Determine How You Want Interest Disbursed: When you open a CD, most banks will give you the option of how you want the interest earned to be disbursed. You can either leave the interest in the CD until it matures or request interest disbursement each month.

How To Build a CD Ladder

Building a CD ladder allows investors to maintain some liquidity in their overall CD investments while taking advantage of the best CD rates possible. This is done by spreading their investments over several different CD terms.

For example, assume you have $5,000 you want to invest in CDs. You can create a five-rung CD ladder by opening the following CDs.

• $1,000: 1-year CD
• $1,000: 2-year CD
• $1,000: 3-year CD
• $1,000: 4-year CD
• $1,000: 5 year CD

Then, when each CD reaches its maturity date, you will reinvest the principal and interest into a five-year CD. By creating this CD ladder, you’ll continue to have CDs mature each year where you can either reinvest or take the money out if needed.

Alternatives to CDs

If you want a safe place to store your money but want a little more flexibility in accessing it, consider one of these alternatives instead.

High-Yield Savings Accounts: Many high-yield savings accounts offer similar interest rates to those of CDs; however, you can access your funds whenever you want.

Money Market Accounts: These accounts are very similar to high-yield savings accounts. They allow you to deposit and withdraw money when you want. The only difference is that most money market accounts require a higher minimum deposit.

Bonds: When you invest in bonds, you lend money to the government or companies in exchange for a fixed interest rate.