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HomepageFinanceBankingThe Best Certificates of Deposit
Last updated on Nov 25, 2019

The Best Certificates of Deposit

Guaranteed rates of return for the goal-oriented saver ​
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How We Reviewed the Best Certificates of Deposit

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25 companies evaluated

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11 contenders

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5 top picks

Taylor Moore

By Taylor Moore Finance & Insurance Writer

Taylor Moore covers banking, investing, auto insurance, life insurance, homeowners insurance, and more as the Finance and Insurance Writer for Reviews.com. Her work has been published in Chicago magazine, Chicago Reader, and The Financial Diet, among other publications. After graduating from the University of Central Florida, she moved to Chicago, Illinois, where she currently lives with her cat.

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

    The Best Certificates of Deposit: Summed Up

    Ally Bank TIAA Bank Marcus by Goldman Sachs Discover Charles Schwab Barclays SunTrust Bank
    Best for Overall One-year APY No-penalty CDs Long-term CDs Short-term CDs Online tools Flexibility
    One-year CD APY 1.75% 1.70% 1.85% 1.75% 0.80% 1.85% 0.70%
    Minimum deposit n/a $5,000 $500 $2,500 $1,000 n/a $2,000
    Maturity terms (months) 3, 4, 9, 12, 28, 36, 60 3, 6, 9, 12, 18, 24, 30, 36, 48, 60 6, 9, 12, 18, 24, 36, 48, 60, 72 3, 6, 9, 12, 18, 24, 30, 36, 48, 60, 84, 120 1 – 30 3, 6, 9, 12, 18, 24, 36, 48, 60 6, 12, 18, 24
    View details View details View details View details View details View details View details

    *Information correct as of March 12, 2020. 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 2020. Note: all data is accurate as of March 2020.

    Ally Bank – Best Overall

    Best Overall
    Ally Bank

    Ally Bank

    Pros

    CDs starting at one month
    Integration with brokerage account

    Cons

    Lower APY rates

    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 1.75% — 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 1.75% 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

    Best One Year APY
    TIAA Bank

    TIAA Bank

    Pros

    CD terms up to ten years
    Competitive APY rates

    Cons

    High minimum deposit

    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 March 2020, the APY for a one-year Yield Pledge CD is 1.70%. 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 1.45%, which is higher than the average. TIAA’s bump-rate CD has a minimum deposit of $1,500 and a higher interest rate of 1.80%, but it only comes with a term length of 3½ years.

    Marcus by Goldman Sachs – Best No-Penalty CDs

    Best No Penalty CDs
    Marcus by Goldman Sachs

    Marcus by Goldman Sachs

    Pros

    CDs with no penalty
    Low minimum deposit

    Cons

    Higher APYs with other 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 (1.70%), 11 months (1.60%), and 13 months (1.50%). 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).

    Discover – Best Long-Term CDs

    Best Long Term CDs
    Discover Bank

    Discover Bank

    Pros

    High one-year CD APY
    Variety of CDs

    Cons

    High minimum deposits

    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 March 2020, the APY for a one-year CD is 1.75% and increases gradually with each available maturity date, topping out at 1.80% 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

    Best Short Term CDs
    Charles Schwab

    Charles Schwab

    Pros

    No minimum deposit
    High interest rates
    Wide product assortment

    Cons

    Early withdrawal penalty

    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.

    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.

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