CDs offer guaranteed returns with FDIC insurance, making them ideal for conservative savers. With rates still elevated, now is a great time to lock in competitive APYs.
CD Rate Highlights 2025
- Best 1-year CD: 4.75% - 5.00% APY
- Best 3-month CD: 4.50% - 5.25% APY
- Best 5-year CD: 4.00% - 4.50% APY
- No-penalty CDs: 4.00% - 4.50% APY
- FDIC insured: Up to $250,000 per depositor
Best CD Rates by Term
| Bank | 3-Month | 6-Month | 1-Year | 3-Year | 5-Year |
|---|---|---|---|---|---|
| Marcus by Goldman Sachs | 4.50% | 4.60% | 4.50% | 4.00% | 4.00% |
| Ally Bank | 4.25% | 4.40% | 4.25% | 3.90% | 3.85% |
| Discover Bank | 4.30% | 4.50% | 4.30% | 3.90% | 3.80% |
| Synchrony Bank | 4.50% | 4.60% | 4.50% | 4.00% | 4.00% |
| Bread Savings | 5.00% | 5.10% | 4.90% | 4.25% | 4.10% |
Best Banks for CDs
TOP PICK
Marcus by Goldman Sachs
- APY range: 4.00% - 5.00%
- Terms: 6 months to 6 years
- Minimum: $500
- Pros: No fees, rate bump feature, strong rates
- Cons: No checking account
BEST FLEXIBILITY
Ally Bank
- APY range: 3.85% - 4.40%
- Terms: 3 months to 5 years
- Minimum: $0
- Pros: No minimum, no penalty CD option, daily compounding
- Cons: Slightly lower rates than competitors
CD Laddering Strategy
Build a CD Ladder
A CD ladder balances higher long-term rates with regular access to funds:
- $10,000 in 1-year CD at 4.50% APY
- $10,000 in 2-year CD at 4.25% APY
- $10,000 in 3-year CD at 4.00% APY
- $10,000 in 4-year CD at 4.00% APY
- $10,000 in 5-year CD at 4.00% APY
As each CD matures, reinvest in a new 5-year CD to maintain the ladder.
Types of CDs
Traditional CDs
- Fixed rate for the term
- Early withdrawal penalty (typically 3-6 months interest)
- Best for money you won't need
No-Penalty CDs
- Withdraw early without penalty
- Slightly lower rates than traditional
- Good for uncertain timelines
Bump-Up CDs
- Option to increase rate if rates rise
- Usually one bump allowed
- Good in rising rate environment
Jumbo CDs
- Require $100,000+ minimum
- May offer 0.10-0.25% higher APY
- Same FDIC insurance limits apply
CD vs High-Yield Savings
| Feature | CD | High-Yield Savings |
|---|---|---|
| Rate | Locked for term | Variable |
| Access | Penalty for early withdrawal | Anytime |
| Best for | Money you can lock up | Emergency fund |
| Rate protection | Yes (locked in) | No (can decrease) |
| FDIC insured | Yes | Yes |
When to Open a CD
- Rates are high: Lock in before potential rate cuts
- Saving for a goal: Down payment, wedding, vacation
- Want guaranteed return: No market risk
- Don't need the money: Can commit for the term
Early Withdrawal Penalties
| CD Term | Typical Penalty |
|---|---|
| 3-6 months | 90 days interest |
| 1 year | 150 days interest |
| 2-3 years | 180 days interest |
| 4-5 years | 365 days interest |