Are Credit Unions the Secret To Higher CD Rates? Here’s What You Need To Know

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In the quest for the best CD rates, savvy investors often overlook a crucial player: credit unions. Known for their member-focused approach, credit unions may offer a gateway to more attractive certificate of deposit rates.

Do Credit Unions Have Better CD Rates?

Credit unions are not-for-profit organizations that traditionally offer higher interest rates on savings products, including CDs, compared to their for-profit counterparts like banks. This edge in rates is because credit unions return profits to their members in the form of better rates and lower fees.

Moreover, credit unions are community-oriented, which can mean more personalized service and a willingness to work with members to offer competitive rates. Their structure allows them to focus on member benefits rather than shareholder profits, often resulting in more favorable terms for savers.

However, it’s important to note that rates can vary widely between different credit unions, and the highest CD rates are not guaranteed. Like any financial decision, it’s crucial to conduct thorough research and compare the rates of various credit unions with other financial institutions.

Credit Unions vs Banks: What’s the Difference?

When it comes to finding the best CD rates, the difference between credit unions and banks can be significant. Credit unions, on average, offer higher interest rates on CDs than banks.

However, it’s not just about the rates. Credit unions also tend to have more flexible terms and lower minimum deposit requirements, making them more accessible to a wider range of investors. Additionally, the customer service at credit unions is often more personalized, which can be a decisive factor for many.

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It’s worth noting that some online banks and high-yield savings accounts are now offering competitive rates that rival those of credit unions. Therefore, it’s advisable to compare rates across a broad spectrum of financial institutions, including both traditional banks and credit unions, to find the best CD rates.

Advantages of Credit Unions for CD Investments

Here are some advantages of opening a CD account at a credit union:

  • Higher average interest rates
  • Lower minimum deposit requirements
  • Member-focused, personalized service
  • Flexibility in terms and conditions

Considerations When Choosing a Credit Union for CDs

When selecting a credit union for CD investments, consider the following factors:

  • Membership eligibility: Most credit unions have specific membership criteria.
  • Accessibility: Consider the location of branches and ATMs, as well as online banking capabilities.
  • Range of financial products: Some credit unions may offer a limited range of financial products compared to larger banks.

Final Take

Credit unions can be a compelling option for investors seeking higher CD rates. With their member-centric approach, they often provide more favorable rates and terms. However, the best strategy involves comparing offers from multiple financial institutions, including both credit unions and banks, to ensure you secure the best CD rates available.


Here are the answers to some of the most frequently asked questions regarding CD rates.
  • Are CD rates better at credit unions or banks?
    • Generally, credit unions often offer better CD rates than banks. This is because credit unions are not-for-profit organizations that return earnings to members in the form of higher savings rates and lower loan rates.
  • Can you get 6% on a CD?
    • CD rates have been rising and there are some financial institutions that offer 6% APY or more on CD accounts from time to time. As of Nov. 9, 2023, Bayer Heritage Federal Credit Union offers a rate in this range on their 12-month share certificate. Make sure you read the fine print to understand the stipulations and membership eligibility.
  • Who has the highest 12-month CD rate?
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Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.


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