Over the past year, banking experts have recommended that consumers move their money from national banks to smaller community banks and credit unions in order to achieve higher deposit rates, lower fees and better customer service. At the same time, CD accounts have been touted as the high-yield alternative to traditional savings accounts, allowing depositors to earn higher interest rates for keeping funds on deposit for a longer period of time.
However, considering the sheer size of the state of California, there are almost too many banking options for depositors to discern where the best CD rates and the financial institutions offering them exist.
In an ongoing study, Go Banking Rates examines interest rates from local banks and credit unions in every U.S. state to help local residents find institutions offering the best rates near them, eliminating the time-intensive research and guesswork that is usually required in order to find these banks themselves.
Average California Interest Rates
The study included interest rates on certificates of deposit offering 6-month, 1-year, and 2-year terms from more than 170 financial institutions in the state of California. It was found that the average rates on CDs in California were lower than the national average across all terms, according to the Go Banking Rates interest rate database.
Deposit Account National Averages
|Account Type||Average Rate|
|6-Month CD||0.31% APY|
|1-Year CD||0.47% APY|
|2-Year CD||0.71% APY|
|Savings Account||0.21% APY|
California Interest Rate Averages
|Account Type||Average Rate|
|6-Month CD||0.26% APY|
|1-Year CD||0.39% APY|
|2-Year CD||0.57% APY|
|Savings Account||0.16% APY|
Online, national, and local banks and credit unions in the U.S. averaged .31% APY for 6-month CDs, .47% APY for 1-year CDs, and .71% APY for 2-year CDs.
Financial institutions in the state of California, on the other hand, averaged just .26% APY, .39% APY, and .57% APY, respectively.
Fortunately, despite these low rates, Go Banking Rates did identify several individual banks and credit unions throughout the state offering highly competitive interest rates on CD accounts – several of which fall into the top 20 in the entire country.
Best CD Rates in California
Among all 6-month CD rates in California, F&A Federal Credit Union presently offers the highest with.96% APY. This is closely followed by First Imperial Credit Union offering .90% APY, and Fresno Police Department Credit Union taking third place with a rate of .75% APY.
As for CD rates on 1-year terms, First Imperial Credit Union took the top spot with an interest rate of 1.30% APY, followed by F & A Federal Credit Union and Bank of Internet with 1-year CD rates of 1.16% APY and 1.10% APY, respectively.
Finally, the best 2-year CD rate in California is currently offered by First Imperial Credit Union at 1.70% APY. Second place is taken by F & A Federal Credit Union with a rate of 1.36% APY. The third spot on the list is filled by American Plus Bank, N.A., offering 1.15% APY.
Highest California Savings Account Rates
As far as the best savings account rates in California, State Farm Federal Credit Union fills the top position offering the only rate above one percent at 1.01% APY. Bank of Internet provides the next-best savings account rate at .80% APY, followed by F & A Federal Credit Union with .75% APY.
Where to Find These California Banks and Credit Unions
For those who are interested in pursuing a new banking relationship with any of the institutions mentioned, we have provided the cities where their main branches can be found:
|Alaska USA Credit Union||Barstow|
|American Plus Bank, N.A.||Arcadia|
|Bank of Internet USA||San Diego|
|Broadway Federal Bank, F. S. B.||Los Angeles|
|California First National Bank||Irvine|
|Centennial Bank||Fountain Valley|
|Chabot Federal Credit Union||Dublin|
|Community Trust Credit Union||Grayslake|
|Community Trust Credit Union Modesto CA||Lamont|
|County Schools Credit Union||Ventura|
|EH National Bank||Beverly Hills|
|F & A Federal Credit Union||Monterey Park|
|FedOne Credit Union||Los Angeles|
|First Imperial Credit Union||El Centro|
|Fresno Police Department Credit Union||Fresno|
|Mc Clatchy Employees Credit Union||Fresno|
|OneWest Bank, FSB||Arcadia|
|Pacific Marine Credit Union||Oceanside|
|Pacific Postal Credit Union||San Francisco|
|State Farm Federal Credit Union||Bakersfield|
|Sun Community Credit Union||Brawley|
Note that the interest rate information used in this study is as of October 25, 2012, based on the interest rates published online by these institutions. Rates could change at any time and it’s recommended that you verify interest rates with individual institutions.