The Best CD Accounts of 2023
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CDs, also known as certificates of deposit, are a great way to capitalize on your savings potential. Like a traditional savings account, they are a safe investment established through a bank or credit union, but generally CDs have higher interest rates — currently more than 4% — allowing you to make more on your return. There are some things to consider, however, before opening up a CD, as the terms of the agreement are specific.
To determine the best CD accounts available in the market, GOBankingRates ranked nearly 65 banks based on a number of factors, including:
- Total assets
- Number of branch locations
- Minimum deposit amount needed to open a CD
- 12-month CD Annual Percentage Yield (APY)
- 60-month CD APY
- Mobile app ratings
GOBankingRates’ Best CD Accounts of 2023
Best for online access
Why we like First Internet Bank
A pioneer in online banking, First Internet Bank is a trusted name in the space. The bank offers solid CD account options and sophisticated text message customer support. As an early adopter of online banking, it has years of experience providing full-featured, low-cost banking services.
There are eight term lengths, from three months to five years, and a $1,000 minimum is required to open an account.
- Great CD account options
- Text message customer support available
- No physical branches
- No ATM networks
First Internet Bank is a great choice for individuals who want solid CD account options and are tech-savvy enough to appreciate the snazzy text-messaging-based customer support — but it’s not for everybody. The lack of physical branches and ATM networks are major downsides for some.
Best for rate guarantee
Why we like Ally Bank
Ally touts above-average interest rates on its CD accounts, along with plenty of flexibility on terms. Being an online-only bank helps keep overhead low, meaning it can afford higher interest on CDs. For an online-only bank, it also has plenty of ATM access in the U.S.
With Ally Bank’s Ten Day Best Rate Guarantee, you can get the best rate for your balance and term if you fund your non-IRA CD within 10 days of your opening date. You’ll get the best rate Ally can offer for your term and balance tier if the rate goes up during this time.
- 10-day best-rate guarantee
- No Penalty CD at APY for 11 months
- Access to over 43,000 Allpoint ATMs in the U.S.
- No direct cash deposits
- No branches available
- Withdrawals can take several days
Ally Bank offers a variety of CD options including High Yield CD, Raise Your Rate CD, No Penalty CD and Select CD to meet your needs, along with the Ally Ten Day Best Rate Guarantee. Plus, this Guarantee applies upon renewal.
Best for above-average rates
Why we like American Express National Bank, Member FDIC
Opening an American Express CD account puts your money to work. Choose your terms up to five years for a locked-in rate with a guaranteed return and up to APY.
The interest on the bank’s 12-month CDs is APY and rates vary by term length.
- APY well above the national average
- Interest compounds daily
- No monthly service fees
- No physical presence
This online-only bank boasts very competitive interest rates on its certificates of deposit — and with no monthly service fees. Choose the terms and receive assurance of a fixed interest rate which will help your money grow.
Best for no minimum deposit
Why we like Barclays Bank
A Barclays CD is a solid choice because there is no minimum deposit to open the account and the interest rate is extremely competitive for most banks, including online-only institutions. You make deposits by transferring funds from the external bank account linked to your Barclays CD account.
The interest rate varies from for 12-month CDs to for 60-month CDs.
- Competitive CD rates
- No monthly maintenance fees
- No minimum deposit to open the account
- No mobile app for U.S. account holders
There’s nothing particularly unique about this CD account, but for a non-online-only account, it’s got a really high interest rate. Barclays Bank CDs are available in terms ranging from 12 to 60 months. The interest rate varies from for 12-month CDs to for 60-month CDs. The only downers are that this institution offers only savings accounts and CDs and touts no mobile app for U.S. account holders.
Best for high rates
Why we like Capital One
Rates start at for a 6-month term. Capital One’s CD is the most lucrative if you can commit for at least 24 months to earn or more. It also sports a network of over 70,000 surcharge-free ATMs and access to Capital One Cafés and branches.
There are several term commitments to choose from, between six and 60 months.
- No monthly service fees
- 70,000 surcharge-free ATMs
- Higher-than-average interest rates
- There are early-withdrawal penalties
If you can afford to lock up your money for at least two years to earn the impressive APY or more, then this is a great CD for you. Otherwise, you may be better off going for the bank’s 360 Performance savings account without having to worry about early-withdrawal penalties and getting a APY.
Best for 24/7 customer service
Why we like Discover Bank
The rates here are above average for a CD account, which makes this one appealing. Plus there are no monthly maintenance fees. CD accounts are available in terms from three months to 10 years.
Rates top out at APY for terms of 2 years, 30 months, and 3 years.
- Above-average rates
- 24/7 customer service
- No maintenance fees
- High minimum deposit to open a CD
- No branch availability
The bank’s CD offerings have no monthly maintenance fees and are available in terms from three months to 10 years. The more you have, the more APY you generate, which is pretty standard for CDs. The main caveat here is that a pretty hefty sum is required to open a CD account: a $2,500 minimum opening deposit. Additionally, there is no branch availability.
Best for great rates
Why we like Marcus by Goldman Sachs, Member FDIC
Marcus offers CD rates that beat the national average. The bank offers a variety of term lengths and rates on its CDs, which makes it competitive with the best CD rates. If you’re unable to commit to a long-term CD, consider the No-Penalty CD option. You can earn as of March 24, 2023, when you commit to 13 months. If you need to withdraw the funds early, you won’t be subject to penalties as long as you wait at least seven days from funding the CD.
Marcus by Goldman Sachs provides a 10-day rate guarantee. If the rate goes up during those 10 days after opening your account, you’ll get the higher rate automatically.
- 10-day rate guarantee
- Strong rates
- No-penalty CD option
- No ATM network
Marcus also offers a Rate Bump CD when you commit to a 20-month term, and if the bank increases its CD rate during that term, you can increase your rate to match one time during those 20 months. There is no fee and no penalty.
Best for dedicated advisor
Why we like Raymond James Bank
This account comes with a dedicated advisor, which gives it a nice white-glove feel. CD terms range from 90 days to five years, with a one-year term offering its highest rate at APY. If you have a Raymond James brokerage account, you can get one consolidated statement for a more complete financial picture.
Receive flexibility in length of investment and choice of cash flow with short-term and longer-term CD options.
- Consolidated statements
- Dedicated advisor with an investment account
- Liquidity prior to termination
- No branches for in-person banking
- Customer service available only during normal business hours
With a dedicated advisor and consolidated statements, this CD may be a good investment in a balanced portfolio. However, it’s important to understand the benefits and risks associated with a CD as well.
Best for mobile app
Why we like TAB Bank
TAB Bank has eight different CD options, with terms ranging from six to 60 months. Rates start at APY for terms three years and longer and max out at APY for a one-year CD.
You must maintain a $1,000 minimum daily balance to earn the published rates, and you’ll incur an interest penalty if you withdraw your money before the CD matures.
- Many term options
- Well-rated mobile app
- Highly competitive APY interest rates
- No physical branches
- Must maintain balance to avoid penalty
TAB Bank offers a streamlined opening process. Choose the terms which match your needs and receive additional peace of mind in knowing there’s no monthly account fee and automatic renewal on maturity.
Best for great APY
Why we like TIAA Bank
This account touts a truly impressive APY. It also boasts convenient and intuitive online banking.
TIAA Bank Basic CD rates start at APY for three months, with the potential of up to APY.
- Easy online banking via the TIAA Bank website and mobile app
- More than 80,000 fee-free ATMs available
- Very high APY
- Non-TIAA Bank ATM fees are only reimbursed up to $15 per month — though unlimited reimbursements are available if you maintain a minimum average daily balance of $5,000
A APY is a pretty serious one. For that reason alone, this account should not be passed over.
What To Know About CDs
When opening a CD, you’ll determine the length of the fixed “term” that will be established — from three months to a number of years — and the money will be locked for that period of time. In return, CDs offer a fixed, higher interest rate than a typical savings account, allowing a higher yield on your money.
What Is A CD Account?
A certificate of deposit, or CD, is one kind of savings account offered by banks and credit unions that offers a safe and easy way to invest and make a return on your money. Unlike traditional savings, however, it’s not a liquid account that you can easily withdraw money from when you might need it. In order to earn the higher interest rate you need to leave your CD account untouched for the entirety of the term length until it reaches maturity.
Who Should Open a CD Account?
Not only is a CD a low-risk savings tool and investment strategy, but it is also best for those who want to increase the amount they earn in interest while keeping their money stored away without touching it. It’s a good way to get a bit more bang for your buck if you are comfortable not having access to those funds until the CD has matured.
How To Open A CD Account
Once you have decided on the right CD account for you based on the CD terms, you can open an account quite easily. Here is what you’ll need:
- Two forms of identification such driver’s license or passport
- Personal information such as name, address and birthday
- Social security number
- Decide if you want the interest disbursed at the end of the term or regularly
- Funds to make the opening and only deposit
How Is a CD Different From a Savings Account?
Unlike a typical savings account, CDs are typically fixed, locked investments. When you open a CD, you’ll determine the length of time you want to keep it active and the set amount to put in, and the interest rate will be fixed for that time as well — typically, the longer you choose, the more interest you’ll earn.
This means you won’t be able to make early withdrawals without incurring a penalty. Usually the penalty is a portion of the interest accrued, dependent on the financial institution’s terms. Savings accounts allow more flexibility, where you can keep contributing various dollar amounts, link accounts and take out withdrawals at any time.
How To Choose a CD Account
The Different Types of CDs
Under the umbrella of certificates of deposit, there are a number to choose from, all offering their own terms and advantages:
- Traditional: This is the standard CD method, where you contribute a particular dollar amount that stays locked in the account for a predetermined amount of time. It’s ideal if you know what you want to contribute ahead of time and won’t need to take early withdrawals. It also offers the highest interest rate of the various forms of CDs.
- No Penalty: Also known as a liquid CD, this option does have more flexibility, allowing for withdrawals before the maturation date of the savings plan without a penalty. However, the financial institution may still impose a waiting period before you take out money. Also, they might not let you take out a percentage but rather mandate you have to take out the full amount, which means you won’t be able to earn on the original deposit. The interest rate for a no-penalty CD will be a bit lower than a traditional CD.
- Bump-Up: The advantage of this type of CD is that you are allowed to ask the bank to raise your interest rate during the term. This can be useful if you think interest rates will rise during the months or years you have specified for the CD, such as during a period of high inflation. Choosing this option may provide the chance to get more interest over time, but it also means a lower interest rate at the start of the term.
The Terms of a CD
When you open a CD, you’ll choose the “term,” or length of time you are locking in the money before it’s vested. Typical CDs offer 3-month and 6-month terms as well as terms of one, three and five years.
Are CDs a Safe Investment?
Generally, yes. Like regular savings accounts that you open at a bank or credit union, CDs are protected under the provisions of the government-led Federal Deposit Insurance Corporation or National Credit Union Administration, as long as you don’t exceed the insured amount, which is $250,000 per person, per bank. And because the CD is a straightforward investment, rather than investing in stock market shares, there is less risk involved.
Are CDs Taxed at the End of a Term?
Yes, the interest you earn with a CD is considered taxable interest as defined by the IRS. If you earn any amount over $10 during the term of your CD, you’ll receive a Copy B of Form 1099-INT or Form 1099-OID that you’ll need to report when you file your tax return.
CD Rates and the Federal Reserve
Though a savings account typically has a variable rate, a CD account has a fixed interest rate, which means the rate won’t fluctuate with the Fed rate of the Federal Reserve. Though if you have not opened a CD account yet, be aware that the already rising rates are predicted to increase in 2023.
What Is CD Laddering?
This is one strategy advised by financial experts, to open multiple CDs at once and stagger the terms and deposits so that you can have access to some of the money sooner and avoid getting stuck in one long-term CD if interest rates begin to rise. So, rather than investing $3,000 in one long-term CD, you might choose to put $1,000 in a 6-month CD, $1,000 in a 1-year CD and $1,000 in a 3-year CD to capitalize on investments while also having access to vested money sooner.
Pros and Cons of CDs
- Higher interest rates: One of the big benefits is that a CD allows a higher interest rate than a traditional savings account, as a payoff for locking your money in for the specific term. Depending on the length of CD you choose, this APY could be 4% or higher.
- Better saving capability: Because the money initially deposited into a CD cannot be touched during the remainder of its term, it prevents you from being able to make withdrawals, which would otherwise cut into your ability to save the money. When you don’t have access to the funds, they can continue to grow. This is also a great option when you have a specific financial goal or a future expense you want to prepare for where you can accrue interest over that time period.
Guaranteed rates: Timing is everything with CDs. If you choose to open this type of account during times of inflation, when interest rates are high, you’ll be able to lock that same rate in over the course of the term, even if inflation subsides and interest rates come down.
- No access to the funds: Though CDs have their perks, one of the big drawbacks is that you cannot touch the money until the term is complete, or you’ll incur a penalty for an early withdrawal. When you open a CD, you lock the money in the account, and this could be for a substantial amount of time, up to several years. There are some options like liquid CDs that do have flexibility where you can access the money originally deposited, but these accounts don’t have the high-interest rates of the traditional options.
- Rates are locked in: As mentioned, timing is everything with CDs. If you are savvy and open an account during times of inflation when interest rates are high, you’ll be able to secure an ideal APY. But, if you open a CD when rates have leveled out, you won’t be able to take advantage of higher interest if those rates jump up over the course of the term.
- Earning potential: While CDs earn interest at a higher rate than a regular savings account, there are other investment options that have even greater yields such as securities and stocks. Though, CDs are generally a safer, less volatile investment.
Alternatives to CD Accounts
There are several factors to compare when choosing whether a CD or another bank account is best suited for you.
CDs vs. Traditional Savings Accounts
The main difference between savings accounts and certificates of deposit, or CDs, is the amount of access you have to the funds in the account. Where standard savings accounts allow you immediate access to your account balance, when you put your money in a CD, you agree to the CD term, which is the period of time your CD will take to mature. Withdrawing funds from a CD prior to maturity can result in early withdrawal penalties. CDs do tend to earn more interest so these accounts are better for those who can leave their money in the account for an extended time period without touching it.
CDs vs. High-yield Savings Accounts
High-yield savings accounts allow account holders to earn significant interest on their balance and are good to grow an emergency fund. CDs, though they operate similarly, are better to possibly save for a large purchase down the line as you can’t access the funds until the CD has matured.
CDs vs. Money Market Accounts
A CD differs from a money market account in that the money market account has checking account features such as the ability to write check or link a debit card. A CD is a time-deposit account, and a money market account isn’t, so it generally pays less than a CD. This is because a CD requires you to keep your balance in the account for a set period of time. This is known as the CD term.
CDs vs. Bonds
CDs and Bonds are both considered safe-haven investments that yield higher returns than a standard savings account. However, when interest rates are high, as they currently are, CDs may be a better option, which also works in the reverse as bonds are preferable when interest rates are low. Interest rates impact which of these will be the higher-paying investment.
Recap of Best CD Accounts of 2023
- First Internet Bank: Best for Online Access
- Ally Bank: Best for Rate Guarantee
- American Express National Bank: Best for Above-Average Rates
- Barclays Bank: Best for No Minimum Deposit
- Capital One: Best for High Rates
- Discover Bank: Best for 24/7 Customer Service
- Marcus by Goldman Sachs, Member FDIC: Best for Great Rates
- Raymond James Bank: Best for Dedicated Advisor
- TAB Bank: Best for Mobile App
- TIAA Bank: Best for Great APY
Best Banks 2023
Best Checking Accounts of 2023
Best Online Bank and Neobank Savings Accounts of 2023
To determine the Best CD Accounts of 2023, GOBankingRates looked at the following factors from all banks:
- Total assets
- Number of branch locations
- Minimum deposit to open an account
- 12-month CD APY
- 60-month CD APY
- Mobile app ratings
Banks Monitored by GOBankingRates
SoFi, Capital One, NBKC, Bank of America, Chime, Charles Schwab Bank, Axos Bank, Current, First National Bank of Pennsylvania, Citibank, New York Community Bank, First Internet Bank, TIAA, Ally Bank, Truist Bank, Wells Fargo, JPMorgan Chase Bank, Quontic Bank, LendingClub Bank, One Finance, First-Citizens Bank, BMO Harris Bank, FirstBank, Bank 5 Connect, BankUnited, The Huntington National Bank, iGOBanking.com, Arvest Bank, First Interstate Bank, Manufacturers and Traders Trust Company, TD Bank, Zions Bancorporation, USAA Federal Savings Bank, Citizens Bank, Fifth Third Bank, PNC Bank, Pinnacle Bank, Keybank, IncredibleBank, Simmons Bank, Santander Bank, Southstate Bank, Bank of Hawaii, First National Bank of Omaha, Bank of the West, First Hawaiian Bank, Texas Capital Bank, Salem 5 Direct, Umpqua Bank, Synovus Bank, Fulton Bank, Flagstar Bank, Associated Bank, UMB Bank, Valley National Bank, United Community Bank, Washington Federal Bank, Centennial Bank, Prosperity Bank, Ameris Bank, United Bank, Pacific Premier Bank, BOKF, City National Bank of Florida, Midfirst Bank, Frost Bank, TAB Bank, Eastern Bank, FNBO Direct, Cadence Bnak, Webster Bank, Old National Bank, Regions Bank, Wilmington Savings Fund Society, MUFG, Union Bank, Bank OZK, First Horizon Bank, CIBC Bank USA, Glacier Bank, Comerica Bank, East West Bank, First Republic Bank, Columbia State Bank, City National Bank, State Farm Bank, Goldman Sachs Bank USA, Marcus by Goldman Sachs, The Bank of New York Mellon, State Street Bank and Trust Company, Citizens Access, Silicon Valley Bank, U.S. Bank National Association, Morgan Stanley Private Bank, Morgan Stanley Bank, Capital One Bank USA, Charles Schwab Premier Bank, TD Bank USA, BNY Mellon, Bank of America California, HSBC Bank USA, The Northern Trust Company, American Express National Bank, UBS Bank USA, Signature Bank, Discover Bank, VirtualBank, Western Alliance Bank, Bank of China, Raymond James Bank, Deutsche Bank Trust Company Americas, BankDirect Capital, Comenity Bank, EmigrantDirect, My Savings Direct, Amboy Direct, Bask Bank, Synchrony Bank, Pacific Western Bank, Barclays Bank Delaware, Commerce Bank, Salle Mae Bank, Stifel Bank and Trust, Cathay Bank, Customers Bank, Green Dot, VioBank, Hancock Whitney Bank
Although the basic idea behind a CD account can be simple to understand, there are still many common questions surrounding them. Here are the answers to some of the most frequently asked questions regarding CD accounts.
- What are two drawbacks of putting your money in a CD?
- Though CDs do have many benefits, there are some drawbacks to opening this type of savings account. One of the main drawbacks is the fact that you normally do not have access to the funds in your original deposit until the term is over, whether that’s three months or three years, unless you open a liquid CD that is more flexible. Another drawback is that the interest rate is locked in for your CD as well, so if interest rates rise during the course of your term, you won’t be able to take advantage.
- What is the biggest negative of putting your money in a CD?
- One of the biggest disadvantages of a CD is that your money is locked until the term of the CD is over. So if you invested $1,000 and chose a 3-year CD, you will not be able to withdraw any of the original $1,000 until that 3-year term is over without incurring a financial penalty.
- How high will CD rates go up in 2023?
- It’s difficult to predict how high interest rates will go up this year as it’s dependent on external factors. The interest rates for CDs are closely tied to the Federal Reserve’s actions when raising or lowering rates. Generally, when the Fed moves interest rates, banks tend to follow in the same direction. In 2022, the Fed raised interest rates several times as a measure to curb inflation so CD APYs have been high; if inflation continues to be an issue in 2023, APYs may remain elevated.
- Is it worth putting money in a CD right now?
- Interest rates for CDs are at an all-time high currently, due to the fact that the Federal Reserve has increased rates several times in the past year in order to curb inflation. As such, now is a great time to take advantage of the increased interest potential with a CD.
- Are CDs worth it in 2023?
- Right now is a great time to open up a CD since interest rates remain high. Opening up a CD now will allow you to lock in that high rate for the full term of your account, even if rates do come down before your money is vested.
- Can you get 6% on a CD?
- Generally, no. Interest rates for CDs tend to fluctuate between 0%-5% based on the health of the economy. The last time the CD APY jumped above 5% was during the 1980s during a time of double-digit inflation.
- What is considered a good CD rate?
- Though rates do fluctuate depending on your account and bank, in general, anything over 4.5% APY is considered above average.
- Is an online bank the best choice for a CD?
- Typically, online banks have higher interest rates and lower fees than brick-and-mortar banks which is another factor to consider when opening a CD Account. Though you may prefer your current bank, minimum and maximum maturity terms as well as the best interest rate available should all be factored into your decision.
- How long can you leave money in a CD?
- The average CD term length is between three months to five years. Though some banks do offer terms as short as one month or as long as 10 years.
- Do CDs have beneficiaries?
- Yes, when opening a CD account you do have the option to name a beneficiary. This is the person that would inherit the money if the CD matures after your passing.
- Are 10-year CD rates worth it?
- If you are looking for very competitive interest rates and are comfortable with parting with the CD funds for 10 years, a 10-year CD term can definitely be worth it based on the rates alone.
- Can you lose money on a CD?
- No, you cannot lose money on a CD. As long as you don’t touch the funds until after the CD has matured. If you make an early withdrawal, the penalties could eat into the interest you have earned.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of March 24, 2023.
Caitlyn Moorhead and Nicole Spector contributed to the reporting for this article.