Certificates of deposit (CDs) are all the rage right now for anyone looking to grow their savings in this high-rate environment. Some returns are getting close to 7% APY, topping most high-yield savings accounts.
We found that the highest CD return on the market is currently offered by Financial Partners Credit Union on its eight-month CD term at 6.50% APY with a minimum $1,000 deposit. To realize just how high this return is compared to the average, the highest national CD average is on a one-year term at just 1.86% APY.
But there's a big catch with Financial Partners' eight-month CD: The high 6.50% APY rate is offered only up to a $5,000 balance and, quite possibly the biggest hurdle, credit union membership is only open to those who live, work or attend school in certain parts of California (Los Angeles, Orange, Riverside, San Diego County, the City of South San Francisco and Alameda), or to employees and retirees of select employer groups.
Luckily, there are other CD options for savers looking to maximize the return on their cash.
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3 saving options to consider
If you don't qualify for Financial Partners Credit Union, you're not out of luck. Though maybe not quite as high, there are other CDs out there with strong APYs that have no balance caps, allow just about anyone can open an account and have longer CD terms, thus allowing you to earn more interest.
For those comfortable locking up a certain amount of their savings for 12 months, CIBC Bank USA's one-year CD offers 5.51% APY to anyone. There's a $1,000 minimum deposit, which is on par with what many high-APY CDs require. Although this particular CD has a lower APY than Financial Partners' eight-month CD, it will earn you more in interest overall since the CD term is four months longer — giving your money more time to compound. Plus, there's no cap to earning interest so you can deposit as much as you'd like and still earn 5.51% APY.
If you were to maximize Financial Partners' eight-month CD offering and deposit the cap of $5,000, the 6.50% APY would net you $214.38 in interest earnings over the eight months. That same $5,000 balance in CIBC Bank's one-year CD at 5.51% APY, however, would net you $275.50 in interest earnings over the one year.
CIBC Bank USA CDs
Annual Percentage Yield (APY)
Up to 5.25% APY
Terms
From 9 months to 30 months
Minimum deposit
$1,000
Monthly fee
None
Early withdrawal penalty fee
CIBC Bank USA may charge a 30-day penalty if you withdraw your CD funds before maturity
Terms apply.
You may not want to tie up your savings for one year, though. In this case, consider a shorter CD term like nine months. Both Signature Federal Credit Union (FCU) and Marcus by Goldman Sachs® currently offer nine-month CDs with good APYs: 5.45% APY and 5.30% APY, respectively.
Sticking to the example above, a $5,000 balance in Signature FCU's nine-month CD at 5.45% APY would net you $203.01 in interest earnings or $197.46 in Marcus' nine-month CD with a 5.30% APY — not far off from the interest you'd earn with Financial Partners' eight-month CD.
Signature FCU and Marcus both require a $500 minimum deposit and have no balance caps. Plus, anyone can become a member of Signature FCU with a $5 deposit into the Signature FCU basic Savings account.
Signature Federal Credit Union (FCU) CDs
Annual Percentage Yield (APY)
From 4.15% to 5.55% APY
Terms
From 3 months to 60 months
Minimum deposit
$500
Monthly fee
None
Early withdrawal penalty fee
A penalty may be assessed for early withdrawal of funds from CDs
Terms apply.
Marcus by Goldman Sachs® CDs
Annual Percentage Yield (APY)
From 3.90% to 5.10% APY
Terms
From 6 months to 6 years
Minimum deposit
$500
Monthly fee
None
Early withdrawal penalty fee
If you withdraw the balance entire principal amount from your CD account prior to maturity, you'll be charged an early withdrawal penalty based on the term of your CD and the principal (except in the case of a No-Penalty CD). Here's how early withdrawal penalties are calculated:
Early Withdrawal Penalty = Interest Rate ÷ 365 (or 366) × Penalty Days × Original Principal Balance
Terms apply.
Bottom line
The record-high CD APYs we're seeing today won't last forever, so now's the time to lock in a good rate. If the Federal Reserve begins to cut rates, which it's expected to do in 2024, then savings rates would drop as well. Consider the CDs in this article if you want to maximize your interest earnings.
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