The Best Certificates of Deposit
How We Reviewed the Best Certificates of Deposit

25 companies evaluated

11 contenders

5 top picks
The Best Certificates of Deposit
A certificate of deposit (CD) is a federally-insured savings account that gives you a guaranteed interest rate in return for keeping your cash with the bank for a mandated amount of time. Banks will typically offer a higher interest rate than what’s offered with a regular savings account. A term length can be as short as one month or as long as 10 years, but it’s important to keep your money in a CD until the maturity date (when the CD expires), otherwise you risk penalties for early withdrawal.
CDs are best for people saving toward a particular goal, like a wedding or mortgage, or retirees who want their money to accrue value without subjecting it to the risks of the stock market.
The 5 Best Certificates of Deposit
- Ally Bank -
Best Overall
- TIAA Bank -
Best One Year APY
- Marcus by Goldman Sachs -
Best No Penalty CDs
- Discover Bank -
Best Long Term CDs
- Charles Schwab -
Best Short Term CDs
The Best Certificates of Deposit: Summed Up
*Information correct as of November 21, 2019. Interest rates change regularly, so please refer to the company sites for the most up-to-date rates.
How We Chose the Best Certificates of Deposit
We started by looking at the 25 largest banks in the U.S. and only considered certificates of deposit (CDs) that were FDIC-insured, available in all 50 states, and had a 1-year APY above 1.60%. We compared CD maturity dates, APY interest rates, early withdrawal penalties, minimum deposits, features, benefits, restrictions, and customer surveys to objectively identify the best CDs of 2019. Note: all data is accurate as of November 2019.
Since 2015, Reviews.com has been helping our readers make smart financial decisions. We’ve investigated CDs from the top 25 banks in the U.S. in order to recommend the best CD for your needs, We update all of our reviews regularly to ensure they stay accurate. The author of this review does not own stock in any of the companies mentioned, or in any other financial institutions.
Ally Bank - Best Overall
Why we chose it
No minimum deposit
Unlike many of its competitors, who require minimum deposits of $1,000 or more, Ally doesn’t have a minimum. Whether you have $50 or $5,000, you can take advantage of Ally’s high-yield CDs, step-up CDs, and no-penalty CDs. This makes Ally the most accessible option for savers, no matter the level of investment.
High interest rates
Ally consistently offers some of the strongest interest rates you’ll find on the market. For a high-yield one-year CD, the APY is 2.00% — nearly the highest in the category. Ally also has a Ten Day Best Rate Guarantee. This means that you’ll receive the best rate that Ally offers if it goes up within ten days of your CD open date. While most of its CDs have fixed rates, the Raise Your Rate CD also has an APY of 2.05% and offers the option to increase your rate once over a two-year term or twice over a four-year term.
Wide product assortment
We’ve awarded Ally “Best Online Bank” and “Best Online Stock Trading Site for Cheap Trades.” In other words, we’re a big fan of its competitive offerings, superior customer service, and accessibility. If you were on the fence about buying a CD from Ally, reviewing its other financial products may make the decision easier.
Points to consider
Early withdrawal penalty
Almost every bank penalizes making early withdrawals from CDs, and Ally is no exception. The penalties charged will depend on your CD term, with exceptions for the depositor’s death or judgment that they’re legally incompetent. For example, if you open a 1-year CD and make a withdrawal before the maturity date, you will owe 60 days worth of interest. Below is a list showing Ally’s early withdrawal penalties for high-yield CDs, according to CD term length (for CDs purchased or renewed on or after 12/7/2013):
CD Term | Penalty |
---|---|
24 months or less | 60 days of interest |
25-36 months | 90 days of interest |
37-48 months | 120 days of interest |
49 months or more | 150 days of interest |
TIAA Bank - Best One-Year APY
Why we chose it
High one-year CD APY
TIAA Bank consistently offers competitive rates on CDs, whose maturity dates range from three months to five years. As of November 2019, the APY for a one-year Yield Pledge CD is 2.10%. And with its Yield Pledge promise, TIAA guarantees a high yield when opening or rolling over a CD. The bank evaluates competitor yields on a weekly basis in order to ensure that its advertised CD rate is within the top 5%.
Variety of CDs
In addition to its flagship Yield Pledge CD, TIAA Bank also offers a basic CD with a minimum deposit of $1,000 and a bump-rate CD with a minimum of $1,500. This 3½-year bump-rate CD allows you to increase your APY once during the term of the CD.
Points to consider
Better APYs and minimum deposits elsewhere
Opening a Yield Pledge CD — our recommended CD — with TIAA Bank is not for the faint of heart (or wallet). To open it, you need to deposit a minimum of $5,000 with the bank. TIAA’s basic CD has a minimum deposit of $1,000, but its interest rate is 2.10%, which is higher than the average. TIAA’s bump-rate CD has a minimum deposit of $1,500 and a higher interest rate of 2.15%, but it only comes with a term length of 3½ years.
Marcus by Goldman Sachs - Best No-Penalty CDs
Why we chose it
CDs with no penalty
Marcus by Goldman Sachs, an online bank for savings accounts and loans, offers a variety of competitively priced CDs, one of which is a no-penalty CD. It comes with three short-term maturity dates: seven months (1.90%), 11 months (1.70%), and 13 months (1.65%). A no-penalty CD offers you the flexibility to withdraw your money in case of an emergency or in case you want to invest in a different CD with a higher return.
Low minimum deposit
To open a CD account, you only need to deposit $500. While you can go with a no-minimum-deposit option like Ally, $500 is still a low starting amount compared to other banks (Discover requires $2,500, for example).
Points to consider
Higher APYs with other CDs
The lack of an early withdrawal penalty is a great perk, but if you have no plans to withdraw that deposit, you may be better off investing in a CD with a higher interest rate. For example, Ally, TIAA, and Barclays all offer one-year CDs with APYs at or above 2.00%. Even within the Marcus family, a High-Yield CD for that maturity date has an interest rate of 2.00% APY.
Discover - Best Long-Term CDs
Why we chose it
CD terms up to ten years
Discover is our only contender to offer a CD with a maturity date as long as ten years. The maximum maturity date offered by the other banks was about five years.
Competitive APY rates
The interest rates for Discover CDs tend to be competitive with the rest of the market. As of November 2019, the APY for a one-year CD is 2.00% and increases gradually with each available maturity date, topping out at 2.20% APY for a ten-year CD.
Points to consider
High minimum deposit
To invest in a Discover CD, you need to be able to put up at least $2,500 for a minimum deposit. This is expensive compared to some of our other picks, with minimums as low as $1,000, or even no minimums.
Charles Schwab - Best Short-Term CDs
Why we chose it
CDs starting at one month
Schwab is the only contender to offer a CD with a maturity date as short as one month. The rest of our top picks start at three months or six months. This is a decent option if you’re testing the waters of CDs and don’t want to tie your cash up in a years-long CD you may not be ready for. At the end of the maturity date, you can choose to renew the CD, reinvest in another CD, or choose an entirely different issuer.
Integration with brokerage account
Schwab CDs can be seen online in your Schwab brokerage account, rather than the issuing institution, so you’re able to view and manage your investments in one central place.
Points to consider
Lower APY rates
While Schwab CD rates are on the higher end of the financial industry spectrum (one-year CD APY is 1.801%), our other picks have APYs that exceed 2.00%. That half of a percentage point can make a big difference over time, so we recommend weighing the convenience of a Schwab CD with the potentially lower earnings.
Others to Consider
Barclays - Best Online Tools
Many of our top picks offer online calculators on their sites that will allow you to see how much interest you’ll make at the end of each term, but Barclays was the only one to take it a step further and recommend a CD ladder investing strategy. If you input your preferred ladder term (three to five years) and how much you want to deposit, you can see Barclays’ recommendation on how to maximize your earnings by staggering CD maturity dates. This is a high-yield strategy that allows you to take advantage of strong interest rates while maintaining some degree of flexibility, in case you want to withdraw some of the principal and interest at any point in the ladder term.
SunTrust Bank - Best for Flexibility
SunTrust Bank’s regular CDs are perfectly acceptable, middle-of-the-road picks in our contender list, but what we liked the most was its Advantage CDs product. The Advantage CD allows you to add funds to the principal at the guaranteed interest rate. This is unique because most competitors only have an allowance of one week to one month after the account opening where you can add cash to the CD before it’s locked in for the term. The Advantage CD also offers one penalty-free withdrawal of your balance and interest per term, and gives you higher interest rates if you set up a monthly auto-transfer of $50 or more. The disadvantage is that at least one owner of this CD is required to have a SunTrust Personal Checking Account, so we can only recommend this for those who already bank with SunTrust or were considering it.
Certificate of Deposit FAQ
A certificate of deposit (CD) is a type of savings account that comes with a fixed rate of return and a fixed withdrawal date (known as a maturity date). The bank agrees to give you an interest rate higher than a regular savings account in return for keeping your cash with them for a certain period of time (known as a term length). This term length can be as short as one month or as long as ten years.
CDs, savings accounts, and money market accounts are typically insured by the FDIC or NCUA. We do not recommend using these products with any banks or credit unions not covered by these government agencies. While funds in a CD are generally untouchable without penalty, you can add funds and withdraw funds freely from savings accounts and money market accounts (the exception being Schedule D, a federal rule that says you can’t make more than six transfers or withdrawals from an account per statement cycle). Though the APYs of CDs often vary from week to week, once you’ve opened an account, you’d typically have the same fixed interest rate throughout the term, whereas the interest rate for your savings account or money market account will change regularly.
CDs must remain with the bank for the specified time period, otherwise you risk early withdrawal penalties that could eat into your interest and possibly your initial deposit. “If you cash out prior to maturity, the penalty could involve some initial loss of your investment, so be very careful about what maturity you invest in,” says Greg McBride, CFA, who is Senior Vice President, Chief Financial Analyst of Bankrate. “In other words, if you need the money in a year, don’t put it into a two-year CD. You’re not going to come out ahead.” You also usually aren’t able to add money to the principal of the CD mid-way through, either; you would instead need to buy another CD.
CDs are valuable for people who are looking to save for specific goals, like a mortgage or a child getting married. CDs are essentially risk-free because they’re insured by the FDIC or NCUA, meaning you won’t lose your money if the institution goes under. You won’t experience any of the volatility that comes with investing in the stock market, since you receive a guaranteed and fixed interest rate (APY).
One strategy that people use with CDs is called laddering. With a CD ladder, you buy multiple CDs with different maturity dates, which allow you to take advantage of multiple interest rates and multiple opportunities to withdraw cash if you need it. “The laddered structure smooths out peaks and valleys in interest rates and provides a more predictable stream of interest income,” McBride says.
Barclays, which we awarded “Best Online Tools,” has a useful CD Ladder calculator on its website. You would input your ladder term (number of years that the money will be invested) and your initial deposit amount, and from there, you’re given a basic CD ladder strategy that includes which CD lengths you’d need to invest in initially and how much interest you would make at the end of the ladder term. (In our example case, if we invested $10,000 into Barclays CDs for three years using the recommended strategy, we would have $10,784.67 at the end of the term length, or $784.67 in earnings.)