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Here are the best CDs of October 2021

Select reviewed dozens of CDs to find the top options to help you reach your savings goals.

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Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

Editor's Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. Select will update as changes are made public.

You may have come across the term CD before when shopping around for a new savings account. Certificates of deposit — more commonly known as CDs — are another savings vehicle offered by banks and credit unions for depositing your cash and earning interest over time.

Unlike a traditional or high-yield savings account, however, once you open a CD, you can't access those funds until the term ends, also known as the maturity date. If you need more of an incentive not to touch your savings, a CD can be a smart move since you can get penalized for any early withdrawals. At the end of the term, you receive your original deposit plus the accrued interest you earned.

CDs also offer fixed interest rates, so your money grows without the risk of your rate dropping (which can happen with a high-yield savings account), and you are guaranteed a return without worrying about the volatility of the stock market.

When choosing a CD, you have to decide how long you want to commit to locking up your money. CD term lengths range between three months and five years, and usually the longer the term, the higher the interest rate (sometimes surpassing rates offered by the best high-yield savings accounts).

To determine which CDs are the best overall, Select analyzed and compared dozens of CD accounts offered by online and brick-and-mortar banks, including large credit unions. We found that the annual percentage yield (APY) offered by online banks and credit unions far outpaced those offered by most national brick-and-mortar banks. While many credit unions have good CD options, they didn't make our final list because the majority require membership, which can require you to jump through several hoops to qualify.

When ranking our top five CD accounts, we looked at length of term, APY, minimum deposit and ease of use. Ultimately, we favored accounts with higher-than-average rates. The national average APY on 1-month to 60-month CDs ranges from 0.05% to 0.34%, respectively, for deposits under $100,000, according to the Federal Deposit Insurance Corporation (FDIC).

The CDs we selected for our ranking all offer APYs more than double their national average, are FDIC-insured, have zero monthly maintenance fees (which is typical of CDs) and low minimum deposits requiring $1,000 or less to open an account. (See our methodology for more information on how we choose the best CD accounts.)

If these CDs don't quite fit your needs, there are a lot of options beyond these basic accounts, including no-penalty CDs (for easy withdrawals), add-on CDs (for making additional contributions), jumbo CDs (for large deposits) and IRA CDs (for retirement), to note just a few.

Here are Select's picks for the top CDs:

Best three-month CD

BrioDirect High-Rate CD

Information about the BrioDirect High-Rate CD has been collected independently by CNBC and has not been reviewed or provided by the bank prior to publication. Sterling National Bank is a Member FDIC.
  • Annual Percentage Yield (APY)

    0.50% fixed APY

  • Minimum balance

    $500 to open and start earning interest

  • Monthly fee

    None

  • Early withdrawal penalty fee

    For 3-month CD: 90 days interest, whether or not earned

See our methodology, terms apply.

Pros

  • Higher-than-average APY
  • Compounds interest daily and credits at maturity
  • Low minimum balance
  • No monthly fees
  • Website is easy to navigate

Cons

  • You can't access your money before your CD term ends
  • Early withdrawal penalty fee

Who's this for? This is a good choice for beginners who want to try out a CD as it only requires locking up your money for a short period of time. If you have plans coming up in the short-term, such as a big trip, a 3-month CD can help you save (and grow) your money while keeping it out of reach so you aren't tempted to spend it.

About BrioDirect High-Rate CD: BrioDirect is the digital subsidiary of Sterling National Bank, which has branches in New York and New Jersey, and offers CDs and high-yield savings accounts online.

The national average rate for a 3-month CD is 0.07% APY, according to the FDIC. With a fixed 0.50% APY, a BrioDirect High-Rate CD offers an interest rate that's more than 7X the national average.

BrioDirect compounds interest daily and credits it to your account at maturity. The minimum deposit is $500 to open a BrioDirect High-Rate CD, and if you withdraw your money early you'll get hit with a penalty fee of 90 days interest, whether or not you've earned the interest yet.

Once your term length ends, the CD renews automatically for another 3-month term at the current rate. Otherwise, account holders have a 7-day grace period after the maturity date to withdraw funds or deposit more without penalty.

BrioDirect's website is easy to navigate. To open an online CD account, you need your driver's license, passport or state I.D. and Social Security number. New customers can make their initial deposits through ACH payment from an existing checking or savings account, or via check or wire transfer.

Best six-month CD

iGObanking High-Yield iGOcd®

Information about the iGObanking High-Yield iGOcd® has been collected independently by CNBC and has not been reviewed or provided by the bank prior to publication. Flushing Bank is a Member FDIC.
  • Annual Percentage Yield (APY)

    0.60% fixed APY

  • Minimum balance

    $1,000 to open and start earning interest

  • Monthly fee

    None

  • Early withdrawal penalty fee

    For six-month CD: Equal to three months of simple interest on the amount you withdraw

See our methodology, terms apply.

Pros

  • Higher-than-average APY
  • Compounds interest daily
  • Low minimum balance
  • No monthly fees
  • Early withdrawal penalty fee is less strict than others
  • Website provides a thorough FAQ section
  • Offers “GiftsforBanking” CDs with higher interest rates, plus free gifts

Cons

  • You can't access your money before your CD term ends
  • Early withdrawal penalty fee, although less strict than others
  • Interest is credited to your account monthly

Who's this for? If you're looking for a slightly longer term, a 6-month CD can be a good option. You'll earn a bit more interest during the extra three months, but you don't have to wait a full year to tap into your funds.

About iGObanking High-Yield iGOcd: iGObanking is the online banking division of Flushing Bank, a commercial bank with branches throughout New York. It offers a variety of products online, including savings and checking accounts, money markets and CDs.

The national average interest rate for a 6-month CD is 0.11% APY, according to the FDIC. At a fixed 0.60% APY, an iGObanking High-Yield iGOcd® offers an interest rate that's more than 5X the national average.

iGObanking compounds interest daily and credits it to your account monthly. The minimum deposit is $1,000 to open an iGObanking High-Yield iGOcd, and if you withdraw your money early, you could get hit with a penalty fee equal to three months of simple interest on the amount you withdraw.

Once your term length ends, your CD renews automatically at the interest rate being offered by iGObanking at that time. You can also access your money, add additional funds to your CD or transfer your matured CD (including interest) to another iGObanking online account or another account at a different financial institution.

iGObanking's website has a thorough FAQ section for interested customers as well as "GiftsforBanking" CDs that offer longer term lengths and higher interest rates for customers looking to make bigger deposits. Customers are also rewarded with a free present from the bank's gift catalog, such as sporting equipment and vacations. A minimum balance of $25,000 is required to open a GiftsforBanking CD, and the value of the gift increases with the more money you deposit.

You'll need to complete an online application to open an iGObanking High-Yield iGOcd. Come prepared with your Social Security number or ITIN/TIN, a valid mailing address (P.O. boxes are not accepted) and your current U.S. bank account and routing number for making the initial deposit.

Best one-year CD

CFG Community Bank CD

Information about the CFG Community Bank CD has been collected independently by CNBC and has not been reviewed or provided by the bank prior to publication. Capital Funding Group is a Member FDIC.
  • Annual Percentage Yield (APY)

    0.67% fixed APY

  • Minimum balance

    $500 to open and start earning interest

  • Monthly fee

    None

  • Early withdrawal penalty fee

    For 1-year CD: Subject to a penalty fee; Withdrawing within six days of account opening will cost you a 7-day interest penalty

See our methodology, terms apply.

Pros

  • Higher-than-average APY
  • Low minimum balance on all CDs
  • No monthly fees
  • Offers 13-month CD with a one-time penalty-free withdrawal

Cons

  • You can't access your money before your CD term ends
  • Early withdrawal penalty fee, except with 13-month CD, which gets a one-time penalty-free withdrawal
  • Website isn’t as user-friendly as others

Who's this for? Making a plan not to touch your savings for 12 months could be a big decision if you're used to tapping into this cash every couple of months. However, the APY you can earn with a 1-year CD can outpace what's being offered by the best high-yield savings accounts, plus you lock in that rate. If you have a big event taking place at least a year away, such as a wedding or plans to buy a home, a 1-year CD is a safe place to stash that money.

About CFG Community Bank CD: CFG Bank is a community bank headquartered in Maryland and is a subsidiary of Capital Funding Group. It offers both business and personal banking products online and at its physical branches.

The national average rate for a 1-year CD is 0.16% APY, according to the FDIC. At a fixed 0.67% APY, a CFG Community Bank CD offers an interest rate that's more than 4X the national average.

The minimum deposit is $500 to open a CFG Community Bank CD. For those looking to open a CD with a longer term, CFG Bank offers the same low $500 minimum balance requirement on all its CDs, which makes this bank stand out from the others.

CFG Bank's 13-month CD is also worth considering. Though it offers a lower 0.62% APY, account holders can take advantage of a one-time penalty-free withdrawal.  If you withdraw your money within six days of account opening, it will cost you a 7-day interest penalty. All other CD accounts by CFG Bank are subject to an early withdrawal penalty depending on the term length.

Once your CD term is up, you can withdraw the full amount or renew/change CDs.

CFG Bank's website isn't as user-friendly as the others on this list, but interested savers can apply online for an account. You'll need a Social Security number, your physical U.S. address and your driver's license or state-issued ID to apply. For making initial deposits to open an account, CFG Bank requires ACH electronic transfer.

Best three-year CD

First National Bank of America CD

Information about the First National Bank of America CD has been collected independently by CNBC and has not been reviewed or provided by the bank prior to publication. First National Bank of America is a Member FDIC.
  • Annual Percentage Yield (APY)

    0.75% fixed APY

  • Minimum balance

    $1,000 to open and start earning interest

  • Monthly fee

    None

  • Early withdrawal penalty fee

    For 3-year CD (or any CD between 24-47 months): Equal to 360 days of interest

See our methodology, terms apply.

Pros

  • Higher-than-average APY
  • Low minimum balance
  • No monthly fees
  • Partial withdrawals allowed depending on CD term length
  • Website provides a helpful FAQ section

Cons

  • Interest is compounded quarterly and added to the CD account at that time
  • You can't access your money before your CD term ends, except for partial withdrawals
  • Early withdrawal penalty fee

Who's this for? With the right 3-year CD, you can earn more interest than you would with many high-yield savings accounts. But with a longer term, you won't have easy access to this cash for quite some time. It can be good to lock in a rate if you expect interest rates to drop, thus opening a mid-range CD makes sense. On the other hand, if there are reports that rates could rise (which is not the case at the writing of this article) over the next couple months, you might want to wait so you're not locked into a low rate for a few years.

About First National Bank of America CD: First National Bank of America (FNBA) is a Michigan-based bank with personal CD and high-yield savings account offerings available online.

The national average rate for a 3-year CD is 0.26% APY, according to the FDIC. With a fixed interest rate of 0.75%, the First National Bank of America CD offers an APY that's more than double the national average.

FNBA compounds interest quarterly and adds it to the CD account at that time. The minimum deposit is $1,000 to open a First National Bank of America CD. While FNBA does allow partial withdrawals depending on your CD term length, there are penalties for withdrawing your full savings fully before the CD's the maturity date. The penalty fee for a 3-year CD (or any CD between 24-47 months) is equal to 360 days of interest (nearly a full year).

When a First National Bank of America CD matures, account holders have a few options. The CD will automatically rollover for another 3-year term at the rate currently offered, unless users choose to rollover into a new CD term with the current rates, withdraw part and rollover the remaining portion or withdraw all their funds. There is a 10-day grace period at the time of maturity when account holders can add funds to their CD.

FNBA's website, like iGObanking's, also offers a helpful FAQ section. New account holders can make their deposits through ACH transfer from an external checking or savings account.

Best five-year CD

Ally Bank High Yield CD

Information about the Ally Bank High Yield CD has been collected independently by CNBC and has not been reviewed or provided by the bank prior to publication. Ally Bank is a Member FDIC.
  • Annual Percentage Yield (APY)

    0.85% fixed APY

  • Minimum balance

    None

  • Monthly fee

    None

  • Early withdrawal penalty fee

    For 5-year CD (or any CD that is 49 months or longer): Equal to 150 days of interest

See our methodology, terms apply.

Pros

  • Higher-than-average APY
  • Interest is compounded daily
  • No minimum balance on all CDs
  • No monthly fees
  • Offers a variety of CD options to raise your APY or withdraw with no penalty
  • 0.05% Loyalty Reward automatically added to CD account renewals
  • Easy-to-use website, mobile app and has high-rated customer service

Cons

  • You can't access your money before your CD term ends
  • Early withdrawal penalty fee (unless you open Ally's No Penalty CD)

Who's this for? A 5-year CD is good for those looking to set aside money for a milestone expense down the road, such as a down payment on a home, because longer-term CDs typically offer higher rates of return. They're also a good choice when interest rates are high, because you can lock in a higher APY. Just be sure you have a separate savings account you can access in case of an emergency.

About Ally Bank High Yield CD: Ally Bank is an online-only bank that offers a range of highly rated financial products — Select also recommends the Ally Online Savings Account and Ally Interest Checking Account. The bank has an easy-to-use mobile app and 24/7 live customer service available over the phone, through online chat or on the app. Ally Bank offers everything from checking and savings accounts, to trading platforms, personal loans and mortgage refinancing.

The national average rate for a 5-year CD is 0.34% APY, according to the FDIC. With a fixed interest rate of 0.85%, an Ally Bank High Yield CD offers an APY that's more than double the national average.

Ally Bank compounds interest daily, and the best part about the Ally Bank High Yield CD (and all of its CD offerings) is that there is no minimum deposit to open an account. The bank also has a variety of CD options, including a Raise Your Rate CD, No Penalty CD and Select CD, if you're looking for something other than a 5-year account.

Withdrawing your money early from Ally's 5-year CD (or a CD that has a term length of 49 months or more) could cost you 150 days of interest (assuming the CD was purchased or renewed on or after Dec. 7, 2013). It is first deducted from the accrued interest and then, if necessary, the principal. 

When your CD matures, you can withdraw your money at no charge during a 10-day grace period. To plan ahead, you can schedule a transfer prior to maturity to move funds to another Ally account or to an external bank account. Otherwise, if you take no action, Ally will automatically renew the CD term. The bank also automatically rewards account holders when they renew their CD with a 0.05% Loyalty Reward added to their CD account, which will boost your APY slightly.

Ally's website is easy to use. To open a CD account, you'll need your basic personal information and Social Security number. Before you sign up, check out the Straight Talk Product Guide, which is easy to follow and provides information on Ally Bank services, fees and policies.

How CDs work

When you put your money in a CD, you earn a fixed interest rate for a specific amount of time on the money you deposit when you open an account. Term lengths range between three months and five years, and usually the longer the term, the higher the APY.

While a CD is similar to a savings account, they differ in a couple of very important ways.

  1. You can only deposit money into the CD once at the beginning of the term. You can't make additional contributions over the course of CD's term. Sometimes, there's a minimum deposit requirement (usually $500 and up).
  2. You can't access your money before your term ends or you'll get hit with an early withdrawal penalty. The penalty fees can vary depending on your bank and your CD's term length, but it's usually the interest earned, or the interest that you would have earned, over a certain number of days or months. Generally, the longer the CD term length, the costlier the withdrawal penalty.

Once the CD matures (when the term length is over), savers can get their money back, in addition to the interest earned over time, or they can choose to move the money into a new CD.

One of the reasons you might want to consider a CD over a high-yield savings account is because savings accounts have variable APYs, and with a CD you lock in the rate the day you open the account. This can be a good thing if you open an account when interest rates are high. It's not so great if you open an account after the Fed slashed interest rates, which it did recently in response to the economic fallout from the coronavirus pandemic.

CDs typically don't come with monthly fees and are federally insured so your money is protected, which makes them one of the safest savings vehicles.

Our methodology

To determine which certificates of deposit (CDs) offer the best return on your money, Select analyzed dozens of CD accounts offered by online and brick-and-mortar banks, including large credit unions. We narrowed down our ranking by only considering those high-yield or traditional CDs that offer competitive APYs, or higher-than-average rates, as well as low minimum deposits requiring $1,000 or less to open an account and zero monthly maintenance fees (which is typical of CDs).

We did not include CDs offered by credit unions on this list, as well as specialty CD types like no-penalty CDs (for easy withdrawals), add-on CDs (for making additional contributions), jumbo CDs (for large deposits) and IRA CDs (for retirement).

When rating our top five CD accounts, we ranked the best in the following categories: 3-month CD, 6-month CD, 1-year CD, 3-year CD and 5-year CD.

While the accounts we chose in this article consistently rank as having some of the highest APY rates, we also compared each CD account on a range of features, including penalties for early withdrawal, website and mobile features, insurance policies and customer reviews when available. We also considered users' deposit options and the frequency with which the interest compounds.

All of the CD accounts included on this list are FDIC-insured up to $250,000 per person. If you are opening a joint account CD with a spouse, the insurance limit is doubled.

The rates and fee structures banks advertise for their CD accounts are not guaranteed forever. They are subject to change without notice and they often fluctuate in accordance with the Fed rate. If you open a CD account, however, you are locked into that APY offered at account opening for the entire term length.

Your earnings depend on the CD term length, the amount you deposit, the APY offered when you opened the account and any associated fees. Generally, a longer term with a larger deposit and a higher interest rate will earn you the most money. Any early withdrawals may result in penalty fees that lower your principal balance/earnings.

To open a CD account for the first time at a bank, most banks and institutions require a deposit of new money, meaning you can't transfer money you already had in an account at that bank.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.