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Fortunly's Guide

In-Depth: The Market’s Best CD Accounts

By
G. Dautovic

July 05,2021


A certificate of deposit is a savings account with a fixed term. The money you deposit stays locked in the account for a specified period that ranges from three months to six years or more. The longer the term, the higher the interest rate you’ll earn. 

CD accounts are beneficial to banks because they know they can use your money until the CD matures. In return, they offer higher interest rates than you’d earn with a conventional savings account that lets you withdraw your funds whenever you like.

The Federal Reserve cut benchmark interest rates in response to the COVID-19 pandemic, resulting in a significant drop in CD interest rates. However, the best CD accounts from online banks still have attractive APYs.

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4 Best CD Accounts for 2021

Minimum opening deposit:
$0
Account fees:
None
Account terms:
3-60 months
No-penalty account:
Yes
Open Account
Offer details
Minimum opening deposit:
$1,000
Account fees:
None
Account terms:
6-60 months
No-penalty account:
Yes
Open Account
Offer details
Minimum opening deposit:
$500
Account fees:
None
Account terms:
1-60 months
No-penalty account:
None
Open Account
Offer details
Minimum opening deposit:
None
Account fees:
None
Account terms:
3-60 months
No-penalty account:
None
Open Account
Offer details
Evaluation Criteria

How We Pick the Best CD Accounts - Review Methodology

Certificates of deposit are among the safest and most common ways to earn high returns on money you deposit. In return for the higher rates, there is a restriction: a set account term, which means you cannot withdraw money before the CD matures without paying penalties. Almost all online banks offer CD accounts.

Some offer unimpressive rates of return, some impose complicated restrictions, some are inflexible regarding terms... we discovered that finding the ideal CD is not as easy as it might seem.

So we researched dozens of industry-leading online banks to find those that provide the best rate on a certificate of deposit and a reasonable variety of term lengths. We considered multiple account types, searched for banks that offer no-penalty accounts, and checked additional benefits that are offered by some banks.

Along the way, we created a criterion-based objective methodology to help us identify the best online banks for CD savers.

FDIC Insurance

CD accounts are a safe place to keep your money, especially if you open your account at a bank that is insured by the Federal Deposit Insurance Corporation. Each account holder gets insurance of up to $250,000. It means that if you have a joint account with your spouse, it will be insured up to $250,000.

FDIC insurance is the first thing that you should check before signing up for the highest-paying CDs because it guarantees that your money will be safe even if the bank closes.

As a practical matter, all US banks are insured. If your bank’s headquarters are outside the US, accounts are probably not insured. You can verify your bank’s status with the FDIC’s BankFind feature.

The $250,000 cap applies to all the accounts you have at a bank even if the bank operates under multiple trade names. You can spreadlarge sums of money across multiple banks to ensure that all of your funds are insured, but be sure to check the fine print. Many banks are related, and you may accidentally exceed the cap by sticking with the bank with the best CD rates.

Types of CD Accounts

CD accounts come in various forms, and it’s up to you to decide which best fits your financial goals. We’ll give you a short explanation of the five most common CD accounts.

Traditional term accounts are the everyday certificates of deposit that you can get at just about any bank. The traditional CD comes with simple requirements, a fixed APY, and a defined term. Most banks specify a minimum opening deposit, but you can find online banks that have no minimums.

Traditional accounts often deliver the best rate on CDs. The disadvantage of these accounts is that you will pay a penalty if you withdraw funds before the account matures - that is, before the end of the term that was specified when you opened the account.

Bump-up CDs are much like traditional CDs. The difference is that you can increase the interest rate once or twice during the term of the account under certain circumstances. However, bump-up accounts usually deliver lower APYs than regular CDs.

No-penalty CDs address the main disadvantage of these accounts: the way your funds are locked up during the account’s term. If you withdraw funds before your CD matures, the bank will charge you penalties. Even the best CDs of 2021 have steep penalties for early withdrawals. No-penalty CDs allow you to withdraw funds anytime you want without paying penalties.

IRA CDs are the way to go if you are saving for retirement. Not only are the funds protected from impulse purchases, but you also are free of paying certain taxes.

Jumbo CDs deliver higher interest rates because you’re depositing a larger amount. If you have a lot of money to invest all at once, a Jumbo CD might be the best way to protect some or all of it.

Annual Percentage Yields

After you familiarize yourself with different CD accounts, it’s time to find a bank that will give you the best interest rates for the CD term you choose. Generally, higher APYs come with a long-term account. But some banks also offer high APYs with short-term CDs.

Term

The next thing you should consider when choosing a CD account is the period you want your money locked into the account. The online banks we’ve evaluated offer terms that range from three months to five years.

You’re unlikely to find a CD with a term shorter than three months, but there could be CDs with longer terms if you like. You probably don’t give up much interest by accepting a shorter term and simply renewing when your CD matures.

Most banks offer higher long-term CD rates, but you can find good offers even for short-term accounts. 

Minimum Deposit

The minimum opening deposit is the money you need to deposit when buying a CD. The amount varies from bank to bank, and some online banks don’t set a minimum deposit amount. 

Your opening deposit is the only deposit you’ll make. A CD isn’t a savings account that you can deposit into and withdraw from. Think of it as a financial instrument that you purchase with a known value at maturity - more like a Treasury bond than a savings account.

Withdrawal Penalties

Another thing you should have in mind when picking high-interest CDs is the fee you’ll be charged if you need to withdraw your money before the CD matures. Most banks charge penalties based on the term of the CD.

If you think you might need access to the money before maturity, consider a no-penalty account. The APY is lower than with a regular CD, but you won’t lose money to penalties if you find you must withdraw funds before the maturity date. 

Renewal Options

After your CD account matures, the bank will give you a grace period to decide what you want to do with your funds. With the highest-yielding CDs, you can qualify for higher rates if you renew your account. Of course, you are also free to close the account and take your money. If you don’t do anything, most banks automatically renew your account after the grace period. 

Additional Products

Most of the online banks that sell CDs also offer savings accounts, money market accounts, personal loans, and many other products. The banks we review take those factors into account, along with the quality of their online and mobile banking platforms.

Customer Service

We didn’t forget to check out customer support. We look for reputable operators that offer a selection of customer support channels. 

Quick Breakdown

Online Banks With the Best CD Rates in 2021:

Best CD Rates - In-Depth Reviews

Ally Review
Ally Review Logo Open Account

On Official Website

Minimum opening deposit:
$0
Account fees:
None
1-year CD:
0.60% APY
3-year CD:
0.65% APY
5-year CD:
0.85% APY
Account terms:
3-60 months
No-penalty account:
Yes
Customer service:
Live chat, phone support, email, social media

Founded in 2009, Ally offers a full menu of financial products and services. The company is based in Michigan and its services are available across the entire country.

Ally specializes in car loans, but the bank also offers personal loans, mortgage refinancing, checking accounts, and savings accounts. When it comes to fixed-term accounts, you’ll find that Ally offers the best CD rates in the industry.

CD Account Features

One of the great things about Ally is that it offers three types of CD accounts - the high-yield CD, the Raise-Your-Rate CD, and no-penalty CDs. Ally offers some of the highest CD rates on all three accounts.  

Ally’s high-interest CD accounts have fixed rates ranging from 0.20% to 0.86%. With these accounts, you should plan to lock your deposit the entire term, because early withdrawals earn steep penalties. You can choose terms that range from three months to five years. Ally offers the industry’s best one-year CD rates: 0.60% of compounded interest.

A unique Ally CD account is the Raise-Your-Rate CD. With this account, you purchase a CD that matures in two or four years. You get a competitive APY to start, and you can increase your CD bank rates once with a two-year account and twice with a four-year account.

A no-penalty CD is also available from Ally. This option gets you an APY of 0.50% and no maturity date, meaning that you can withdraw your deposit and earned interest anytime you like.

Fees and Penalties

In addition to offering the nation’s best rates for a certificate of deposit, Ally charges no setup or maintenance fees. 
Ally’s biggest disadvantage is that you’ll pay penalties based on the CD term if you withdraw money before the maturity date.

  • 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 longer: 150 days of interest

For example, if you have $10,000 in a 0.60% CD with a one-year term, early withdrawal will cost you $9.98. If the same amount were in a 0.86% CD with a five-year term, the penalty would be $35.74.

Renewal Options

As the best bank for CD rates, Ally gives you a 10-day grace period to decide what to do with your account after it matures. The bank gives a generous 0.05% loyalty reward to account holders who renew their CDs.

Ally gives you advance notice that your CD’s term is about to end so you can choose what to do with your account. If you take no action, the bank will automatically renew it for the original term.

Additional Products

You can open an Ally account quickly and easily through the bank’s website - even with your mobile phone. Ally’s mobile app is especially useful, allowing you to manage your account on the go.

Ally’s main selling point is that it offers the best interest rates on CDs. Every new account holder gets a 10-day best-rate guarantee. If interest rates rise during this period, the bank will adjust your CD to give you the best rate. The same offer is available when you renew the account.

Customer Service

Should you have any questions about Ally’s CD accounts, you can contact the bank’s agents. You can call agents on the phone, write an email, or contact them via live chat. The bank is also active on social media, including Facebook, Twitter, and Instagram.

Ally’s website is well-organized with a comprehensive FAQ that can help you learn about CDs.

Bottom Line

If you are looking for the best CD interest rates, Ally is the bank for you. Regardless of which account you choose, the bank will set the best APYs based on your deposit and the account term.

Reasons to Open a CD Account:

  • Handy mobile app
  • Best rates with 10-day guarantee
  • Varied accounts
  • No-penalty option
+ Show more
CIT Bank Review
CIT Bank Review Logo Open Account

On Official Website

Minimum opening deposit:
$1,000
Account fees:
None
1-year CD:
0.30% APY
3-year CD:
0.40% APY
5-year CD:
0.50% APY
Account terms:
6-60 months
No-penalty account:
Yes
Customer service:
Phone, email, online form

For more than a decade, CIT Bank has offered customers financial products ranging from competitive high-yield savings accounts and certificates of deposit to personal loans, small business loans, and money market accounts.

CIT Bank is a perfect solution if you are looking for high-interest CD accounts with versatile terms. Its 11-month no-penalty CD accounts are hard to resist. The bank specializes in high-interest jumbo accounts, so it’s worth an extra look if you have a large sum to invest.

CD Account Features

The minimum deposit required to open an account at CIT Bank is $1,000. There are eight CD terms that you can choose from. The term can be as short as six months or as long as five years. You should choose wisely so you won’t have to withdraw money early and pay penalties.

The duration of your CD account will also determine your APY. Like most banks, CIT reserves its best CD rate for its long-term CDs. Regardless of the term, CIT Bank CD rates are low compared to what you can get from other lenders - especially for short-term investments.

While a $1,000 CD with a five-year term gets you an APY of 0.50%, the same amount earns you only 0.30% if you choose a one-year term.

CIT Bank also offers a no-penalty certificate of deposit with an 11-month term. You can withdraw your deposit and earned interest at any time you want, without paying penalties. Even if you qualify for CIT’s best current CD rates, however, you will find them lower than you can earn elsewhere.

CIT Bank’s best interest rates are reserved for jumbo CDs that require a deposit of at least $100,000. The APY rates are 0.40% to 0.50% for accounts with terms ranging from two to five years.

CIT has discontinued its unique RampUp and RampUp Plus CDs, which allowed investors to make deposits to a CD during its maturation period to earn a higher interest rate.

Fees and Penalties

CIT Bank CD interest rates may not be the highest in the industry, but the bank doesn’t charge any fees for account maintenance. If you withdraw funds before your account matures, the bank will charge you a penalty, however.

Renewal Options

At your CD’s maturity date, the bank will renew your CD automatically after a short grace period. Your funds will roll over into a new CD with the same terms as the original, except that 13-month CDs renew for 12 months and 18-month CDs renew for two years.

Additional Products

CIT bank offers a top-notch online banking experience. To open a CD account at CIT, you follow a three-step application process at the bank’s website.

To compare CDs, a rate comparison chart is handy - and you’ll find one at the site along with an online yield calculator. A mobile app is available for Android and iOS smartphones; you can download it directly from CIT’s website. The app lets you monitor your account and manage the funds after maturation, specifying whether you want to renew it, withdraw funds, or choose a different CD term.

Customer Service

CIT Bank offers customers support via telephone and email. With online and mobile banking, you can contact agents via email at any time you wish. The service is available 24/7. The bank’s website is well-organized so you can find the best CD rates available quickly. 
Agents are available by phone on business days from 9 a.m. to 9 p.m. Eastern time and Saturdays from 10 a.m. to 6 p.m.

Bottom Line

CIT Bank offers secure CD accounts and other financial products. It’s the best choice for those who are looking for flexible account terms. The downside is that the bank offers lower rates of return than other online CD account providers.  

Reasons to Open a CD Account:

  • Reputable bank
  • Variety of CD accounts
  • Interest compounded daily
  • Security and protection features
+ Show more
BrioDirect Review
BrioDirect Review Logo Open Account

On Official Website

Minimum opening deposit:
$500
Account fees:
None
1-year CD:
0.60% APY
3-year CD:
0.45% APY
5-year CD:
0.45% APY
Account terms:
1-60 months
No-penalty account:
None
Customer service:
Phone

BrioDirect offers some of the best CD accounts on the market. It’s an online bank owned and operated by Sterling National Bank, one of the United States’ best-known banks. Sterling was founded in 1888, and according to Forbes, it’s one of America’s best banks.

Although BrioDirect is not accredited on BBB, the site rates Sterling Bank A+.

BrioDirect specializes in two financial products: high-yield savings accounts and high-interest CD accounts. This is an FDIC-insured financial institution, meaning that the government guarantees your funds even if calamity hits the bank. Each account holder at BrioDirectis insured up to $250,000.  

CD Account Features

BrioDirect offers high-yield CD accounts that you can open with a minimum deposit amount of $500. The application is online, and you can open a certificate of deposit account within 10 minutes.

The bank requires only a bit of personal information - name, address, Social Security number. Once you submit that data, you can open your CD account, choose the account duration, and purchase a certificate of deposit.

If you like flexible account terms, you’ve come to the right place. BrioDirect’s high-yield CD accounts are available with 11 term options. Naturally, the longer your term, the higher APY you’ll enjoy. For example, 1 year CD rates for a $500 deposit earn an excellent APY of 0.60%. BrioDirect offers not only the best 1-year CD rates, but high CD rates for shorter terms as well.

BrioDirect’s main selling point is a three-month CD account that earns an APY of 0.50%. You won’t find an account like this from any other bank. Twelve-month CDs earn 0.60%. Curiously, CDs with longer terms have yields of just 0.45%. The three-month and one-year accounts are the stars of the show at BrioDirect.

These CDs are an excellent opportunity if you have a short-term financial goal.
If you prefer a no-penalty account, you’ll have to look elsewhere. This online bank doesn't offer no-penalty CDs. This might be its biggest imperfection.  

Fees and Penalties

BrioDirect CDs come with the best online CD rates and no account fees.

If you decide to cash out your CD account before it matures, however, BrioDirect will charge you an early withdrawal penalty. Penalties are calculated based on your account terms:

  • 30 days or less: 30 days of interest
  • 12 months or less: 90 days of  interest
  • 18 to 60 months: 9 months of interest
  • 60 months or more: 12 months of interest

Renewal Options

A seven-day grace period begins when your BrioDirect CD matures. During this period you can withdraw your funds or choose a different account. If you have done nothing after seven days, your account renews automatically.

Additional Products

Like other top CD accounts, BrioDirect CDs are secured with the latest technology measures. The bank uses advanced security protocols to ensure safe transactions and protect your account from fraudulent activities.

Sterling’s mobile app is available to all account holders. Whether you prefer iPhones or Android phones, you will find the mobile app a handy option for managing your account while you’re on the go. You can use it to check the maturity date.

But you don’t need to worry about the maturity date. BrioDirect will notify you before your grace period starts. They’ll give you plenty of time to decide what you want to do with the funds in your account.

Customer Service

If you want to get the best certificate of deposit rates, contact BrioDirect’s customer service department. The agents will explain to you all you need to know about current rates and help you find the perfect time to open a CD.

Phone support is available on business days from 8:30 a.m. to 8 p.m. and Saturdays from 8:30 a.m. to 3 p.m. Eastern time. Unfortunately, BrioDirect offers neither live chat nor email support.

Bottom Line

We think BrioDirect is a perfect fit for clients who want to open short-term CD accounts. The bank offers competitive rates for a three-month CD account. Also, BrioDirect has the best CD rates for 1-year accounts.

Reasons to Open a CD Account:

  • High APY for short-term CDs
  • Quick and easy online application
  • Excellent phone support
  • No maintenance fees
+ Show more
Synchrony Review
Synchrony Review Logo Open Account

On Official Website

Minimum opening deposit:
None
Account fees:
None
1-year CD:
0.55% APY
3-year CD:
0.65% APY
5-year CD:
0.80% APY
Account terms:
3-60 months
No-penalty account:
None
Customer service:
Phone, chat, email

Established in 2003, Synchrony is a reputable online bank with more than $100 billion in assets, making it one of America’s largest banks. Named one of America’s best online banks by Forbes, Synchrony is an ideal destination if you’re looking for high-yield savings accounts and CDs.

In addition to savings accounts and traditional CDs, this bank also offers money market accounts and IRA CDs.

CD Account Features

If you are looking for the best 5-year CD rates, Synchrony.com is the place to go. Its five-year CD account delivers an APY of up to 0.80%.

Depending on how much you invest, you could see a substantial return on your money.

If you are not ready to lock up your funds for such a long period, you can choose from Synchrony’s other options, including short-term accounts of three, six, and nine months. Synchrony Bank CD rates start at 0.15% APY and rise to a ceiling of 0.80%.

Synchrony differs from other banks because it offers distinctive 13-, 14-, and 15-month CDs that earn the top CD rates. The APY for these accounts is 0.60%.

The main advantage of Synchrony CDs is that you can deposit any amount of money to open an account. Other online banks require significant deposits before you can open a CD, so it’s rare when there’s no minimum amount.

Synchrony also offers IRA CDs. With a Synchrony IRA account, you can save for retirement independently. The IRA CD allows you to save more money than you would with a regular CD, and of course, you benefit from IRA tax exemptions.

At Synchrony, you’ll enjoy the industry’s best IRA CD rate. Synchrony Bank IRA CD rates for a minimum CD deposit of $2,000 and a one-year term deliver an APY of 0.60%.  

Synchrony Bank CDs don’t require monthly maintenance fees and you don’t pay a setup fee when opening your account. And of course, Synchrony CDs are federally insured up to $250,000 by the FDIC.

Fees and Penalties

Although Synchrony doesn’t charge fees for opening and maintaining accounts, steep penalties apply if you withdraw money before your account matures. Penalties are keyed to your CD’s term:

  • 12 months or less: 90 days of interest
  • 12-48 months: 180 days of interest
  • 48 months or more: 365 days of interest

If you want to get the best rates on CDs without sacrificing access to funds, Synchrony’s ladder strategy, which involves splitting your investment into separate CDs with long and short terms. Synchrony doesn’t offer no-penalty CDs, but the ladder strategy can help you earn more while keeping you liquid.

Another unusual feature: Synchrony lets you add money to your CD multiple times during the first 10 days.

Renewal Options

When it comes to renewal options, Synchrony is more restrictive than other online banks. You can check online to see when your account matures - and you’d better, because Synchrony offers a grace period of just one day to decide what you want to do with your funds. You can check Synchrony’s CD accounts and rates, and if a new rate fits you, you can renew your account.

Additional Products

Synchrony Bank offers a 15-day best rate guarantee, but it’s not very impressive. When you open your CD account, you don’t have to deposit funds right away. For example, you might mail a check that takes several days to get to Synchrony headquarters.

The best rate guarantee says that if Synchrony is offering a higher APY on the day your funds arrive (within 15 days of opening your account), you’ll get the higher rate instead of the rate you signed up for.

Customer Service

Whether you want to find the best interest rates for CD accounts or determine the best account term to achieve your goals, Synchrony’s representatives will promptly answer your questions. Customer support is available via live chat, email, and phone. You can call agents from 8 a.m. to 8 p.m. Eastern time on business days and 8 a.m. to 5 p.m. on weekends.

Bottom Line

High-yield CD accounts, modern online and mobile banking, and a wide variety of accounts with different terms are some of the reasons you should consider Synchrony Bank. But this site’s best online bank CD rates are reserved for those who make large opening deposits.

Reasons to Open a CD Account:

  • No monthly fees
  • Multiple deposits first 10 days
  • FDIC-insured
  • IRA CDs
+ Show more
FAQ
What is a CD account? +

A certificate of deposit is a bank account with a fixed term. A CD can be beneficial if you are looking for a safe place to stash money and earn more interest than a passbook savings account. The disadvantage is that you cannot withdraw money before your account matures. Think of a CD as an investment, not a savings account. 

Which banks have the best CD rates? +

We evaluated online banks that offer higher-than-average CD rates. Whichever you choose, you’ll enjoy the highest CD interest rates in the industry. 

Who has the highest 12-month CD rate? +

Online CD rates depend on the account term and the amount you’ve deposited. The online banks on our list have the highest industry rates. Regardless of which one you choose, you’ll get a high rate for a one-year term.

What are the CD rates at Ally Bank? +

Ally Bank CD rates are among the highest in the industry. They start at 0.20% APY for short-term accounts. With a five-year CD, you’ll earn an APY of 0.86%. 

Can you lose money on a CD? +

Even with the best CD accounts, you can lose money if you withdraw funds before the account matures. To avoid this, it’s important to consider the term that fits you best. 

Are CDs safe? +

CDs are safe. At reliable banks, they are insured up to $250,00 by the FDIC.

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