Best CD Rates of April 2024: Up To 5.30%
Updated April 12, 2024 at 3:34 pm
A variety of economic factors, including interest rate hikes from the Federal Reserve, have boosted CD rates and other savings rates into a highly favorable range for consumers. Today’s rates are even high enough to make certificates of deposit (CDs) an excellent choice when it comes to storing short-term and mid-term savings or for keeping emergency funds you might need to cover unexpected bills or live off of after a job loss or a loss in income.
Even so, you’ll want to find out which banks offer the best CD rates along with reasonable opening requirements and no fees (or minimal fees). We compared all financial institutions offering the best CD interest rates to come up with this ranking of the top options for 2024.
Our Methodology Newsweek Vault’s banking experts have done hundreds of hours of research to present you with all the latest information about your banking options. Whether you’re interested in opening a new checking account or savings account, our research spans all the top online banks, credit unions and brick-and-mortar branches.
We assessed the following five key factors to help you choose the best account for your personal finance needs.
- Associated fees
- ATM access
- Balance requirements
- Customer service
- Interest-earning potential
Our Picks - Best for No Minimum Balance: Capital One
- Best for No Hidden Fees: Ally Bank
- Best for Competitive CD Rates: LendingClub
- Best Rates for 12-Month CDs: BMO Alto
- Best for No-Penalty CDs: CIT Bank
- Best Renewal Rates: Bread Savings
- Best for Shorter-Term CDs: Sallie Mae
- Best Credit Union CDs: Alliant Credit Union
8 Best CD Rates of 2024
Best for No Minimum Balance
Capital One
Vault Verified
Why We Chose It
Capital One made our ranking due to its lack of minimum balance requirements for CDs. This lets you earn the best CD rates on small amounts of money, whereas other competing banks may require you to have at least $1,000 or $5,000 to get started.
Pros
- Open a CD with any amount of money
- Certificates of deposit (CDs) last up to 60 months
- There are no monthly fees or hidden fees
Cons
- Rates are less competitive for longer CDs
- Physical bank branches are limited in some locations
- Early withdrawal penalties apply on all CDs
Best for No Hidden Fees
Ally Bank
Vault Verified
Why We Chose It
Ally Bank offers exceptional CD rates with no hidden fees. And just like Capital One, Ally Bank offers CDs with no minimum balance requirements.
Pros
- There are no minimum balance requirements or fees required
- Earn a 0.05% Loyalty Reward when you renew a CD with Ally
- CD terms range from 3 months to 5 years
Cons
- Early withdrawal penalties apply on most CDs
- Ally Bank has no physical bank branches
- You’ll get a lower rate for longer-term CDs
Best for Competitive CD Rates
LendingClub
Vault Verified
Why We Chose It
LendingClub typically offers some of the best CD interest rates of all institutions in this ranking. Terms are also flexible with CD rates that last up to 60 months.
Pros
- Earn a competitive rate on savings with a CD
- There are no monthly fees to speak of
- Lock in a fixed rate for up to 5 years
Cons
- Longer-term CDs feature less competitive rates
- LendingClub doesn’t have physical bank branches
- The minimum CD term is 6 months
Best Rates for 12-Month CDs
BMO Alto
Vault Verified
Why We Chose It
BMO Alto offers some of the best CD interest rates around with no minimum deposit.
Pros
- Open a CD with any amount of money
- There are no monthly or hidden fees
- Earn great rates for 12-month CDs
Cons
- There are no CD terms shorter than 6 months
- This is an online-only bank with no physical locations
- Rates are less competitive for CDs over 12 months
Best for No-Penalty CDs
CIT Bank
Vault Verified
Why We Chose It
CIT Bank offers a combination of traditional CDs and no-penalty CDs that let you withdraw funds early without a penalty. Rates for no-penalty CDs are highly competitive, although only one term (11 months) is offered.
Pros
- Lock in a fixed rate for 11 months with a no-penalty CD
- Some traditional CDs also earn competitive rates
- There are no monthly or hidden fees
Cons
- You need a minimum of $1,000 to start saving
- Watch out for low CD rates on some terms
- This online-only bank has no physical locations
Best Renewal Rates
Bread Savings
Vault Verified
Why We Chose It
Bread Savings offers highly competitive rates for its 12- to 24-month CDs (though you can get terms of up to 5 years), but its renewal rates are even higher. These accounts also come free of hidden fees.
Pros
- Earn competitive rates for 12- to 24-month CDs
- Enjoy even better rates for CD renewals
- There are no monthly fees
Cons
- The shortest available CD term is one year
- You need a minimum balance of at least $1,500
- Early withdrawal penalties apply on all CDs
Best for Shorter-Term CDs
Sallie Mae
Vault Verified
Why We Chose It
Sallie Mae offers competitive rates for all of its CD terms, ranging from six months to five years.
Pros
- Highly competitive CD rates
- These accounts come without monthly fees
- CD terms last up to 60 months
Cons
- You need at least $2,500 to get started
- Early withdrawal penalties apply on all CDs
- Rates for longer-term CDs are less competitive
Best Credit Union CDs
Alliant Credit Union
Vault Verified
Why We Chose It
Alliant Credit Union offers competitive rates for CDs, and they even offer jumbo CDs with better rates for deposits of $75,000 or more. IRA CDs are also available.
Pros
- Enjoy competitive rates for CDs with various terms
- CD terms as short as 3 months are available
- Enjoy the peace of mind of working with a credit union
Cons
- Rates are less competitive for CD terms longer than 12 months
- You need $1,000 to open an account
- Early withdrawal penalties apply for all CD products
Certificate of Deposit Overview
Certificates of deposit (CDs) offer a safe place to store excess cash for when you need it—and with fixed interest rates to boot. This makes CDs unique from savings accounts with interest rates that change over time and from investment accounts that base returns on highly variable market conditions.
If you’re in the market for a new bank and are wondering whether you should get a CD instead of opening a high-yield savings account or money market account, it’s crucial to understand the differences between these accounts and how they work.
What Is a CD?
A certificate of deposit (CD) is a specific type of savings account that’s offered by traditional banks, online banks and credit unions. CDs offer a fixed interest rate for a set period of time, during which the terms of the CD typically remain the same. Note that CDs feature FDIC insurance just like regular savings accounts do, so they’re considered an especially “safe” place to keep your money.
What makes CDs stand out is the fact you fully commit to, or “lock in,” the CD interest rate for the duration of the CD term. This means the interest rate won’t change based on market conditions, but it also means you cannot access your money early without (likely) paying a penalty.
How Do CDs Work?
When you open a certificate of deposit with a bank or a credit union, you give them a set amount of money upfront. This can be as little as $1 with some banks that don’t have a minimum opening balance requirement for CDs, yet it may also need to be $1,000, $2,500 or more with other firms.
In any case, you’ll hand over the set amount of cash to the bank in exchange for a fixed interest rate for a set term. As an example, you could purchase a $2,500 CD with a fixed rate for 18 months, or you could opt for a $25,000 CD with a 60-month term.
Because the majority of CDs require you to lock in your rate and commit to the full term, you’re typically charged a penalty if you need to access your money early. These penalties vary by bank, by account and by the amount of time left in the CD. If you keep the CD for the full term, however, you can cash out your initial deposit plus interest. Some CDs automatically renew if you don’t cash them out within a certain time period (known as a grace period).
Types of CDs
While certificates of deposit are different from other types of savings accounts, there are also some unique types of CDs to know about and understand.
Traditional CDs
Traditional CDs work in the manner described above. You invest a specific amount of money upfront in exchange for a fixed interest rate, and you have to pay a penalty if you need to access your money early.
When you shop around for traditional CDs, you’ll notice they’re offered in many different terms (usually 3 to 60 months) and rates and early withdrawal penalties can vary widely across providers.
No-Penalty CDs
A no-penalty CD is a type of CD that does not charge any fees if you access your money early. That said, no-penalty CDs may come with slightly less competitive terms than traditional CDs, and they are typically only available for 11 to 13 months at most.
No-penalty CD terms, fees and minimum opening balance requirements also vary widely by provider. Note that most banks don’t offer no-penalty CDs, so you’ll have to compare a broad range of financial institutions to find them.
Bump-Up CDs
A bump-up CD lets consumers lock in a fixed interest rate for a set period of time, but there’s a twist. These CDs let the owners request a higher interest rate when market conditions change during the CD term.
While terms for bump-up CDs vary, most allow for a one-time rate increase if rates for other CDs offered by the bank go up. There are also scenarios where a provider will allow multiple rate increase requests for longer-term CDs. Also be aware that CD interest rates for bump-up CDs tend to start lower than traditional CDs offer.
Who Should Get a CD?
Certificates of deposit are great for some types of savers and “buckets of money” consumers have, but not so much for others. For example, someone who needs quick access to their cash in the short term may be better off with a high-yield savings account or a money market account instead.
For the most part, CDs are best in the following scenarios:
- You want to earn a competitive fixed rate with no risk. If you want to earn a great rate on part of your savings without the risk of losing principal, certificates of deposit offer this benefit with FDIC insurance included.
- You’re saving for a home or another large expense. These accounts are also great for saving up for a large expense, particularly when you know you need to save up for a specific amount of time.
- Keeping some of your cash separate could benefit you. Maybe you want to “lock up” some cash so you don’t feel tempted to spend it. A CD can help in that respect—and with fixed interest rates for the length of the term.
How To Get a CD
The exact process required to get a CD depends on whether you bank in person or opt to open an account online. That said, here’s a rundown of the basic steps you’ll take either way.
- Step 1: Compare the best CD rates. Look at a variety of banks and credit unions to see which ones have the best CD rates for the term you need.
- Step 2: Look for minimum balance requirements and fees. Compare providers based on their opening balance requirements, and look for banks that don’t charge monthly fees or hidden fees.
- Step 3: Open an account. Open a CD online or in person by providing your full name and contact information, address, citizenship status, date of birth and Social Security number (SSN).
- Step 4: Transfer funds to the new CD. Set up a bank transfer to fund the new CD or present the new institution with the funds (cash or check) required in person.
- Step 5: Know when your CD matures. Make sure you know when your CD term ends so you can renew it or cash out before the grace period ends. Note that some banks will renew your CD automatically if you don’t take action within a relatively short amount of time (even as short as 10 days).
Pros and Cons of CDs
CDs can be ideal in a wide variety of circumstances, but several limitations take away from their appeal. Consider the advantages and disadvantages of these accounts before you choose a CD over a high-yield savings account or money market account.
Pros of CDs
- Know exactly how much interest you’ll earn. Because CDs offer fixed interest rates for a set period, you can run the numbers and know exactly how much interest you’ll earn during the CD’s term.
- Choose the CD term you want upfront. Select from CD terms that last however long you need them to, usually from 3 to 60 months.
- Enjoy the peace of mind that comes with FDIC insurance. Certificates of deposit come with the same FDIC insurance as savings accounts, which is good for up to $250,000 per depositor, per account type and per institution for each account ownership category.
Cons of CDs
- You’ll likely pay a penalty to access your money early. Most CDs require you to pay early withdrawal penalties if you need to cash them out before the agreed-upon maturity date.
- Longer-term CDs typically have less competitive rates. While CD interest rates vary and change over time, most banks offer their most competitive rates on shorter-term CDs.
- You can miss out on returns if rates rise during your CD’s term. If you lock in a fixed interest rate and rates rise across the board after the fact, you might regret getting a CD instead of a high-yield savings account or money market account.
How the Federal Reserve Affects CD Rates
While the Federal Reserve doesn’t set CD rates directly, its control over the federal funds rate (the rate banks pay each other when they borrow money) does play a role in CD rates. Essentially, the Fed uses the federal funds rate to conduct monetary policy and influence market conditions. When the Fed anticipates a recession or aims to slow inflation, increasing the federal funds rate and slowing the demand for goods and services can help in that respect. Meanwhile, lowering the federal funds rate can increase economic activity since it floods the market with cheaper credit that makes it easier for consumers and companies to borrow and spend money.
This is why we’ve seen CD rates rise along with mortgage rates and credit card interest rates over the last few years; the Fed hiked the federal funds rate over 10 times in 2022 and 2023 to deal with inflation and other economic concerns. Where the federal funds rate was at 0.05% in April 2020, the rate was at 5.33% in January 2024.
What Is a CD Ladder, and How Do You Build One?
A CD ladder is a series of CDs bought by a consumer to accomplish a specific savings goal while keeping some money accessible over time. Someone creating a CD ladder might take their savings and split it up into five or six different savings “buckets,” in which case they would use each bucket to purchase a CD with a different term length.
Let’s say a consumer has $100,000 saved, and they want to earn a fixed return while keeping some of their cash accessible along the way. In that case, they might purchase five different $20,000 CDs with varying lengths—12 months, 24 months, 36 months, 48 months and 60 months. In this scenario, they would earn a fixed interest rate for each CD term. They would also know they have a CD reaching maturity every 12 months during the ladder, in which case they could spend the money as needed or use it to purchase another CD.
Frequently Asked Questions
What Are the Best 12-Month CD Rates?
BMO Alto is offering one of the best rates on a 12-month CD at the moment. Consumers can earn a 5.65% APY on their savings with a $0 minimum opening balance requirement and no monthly fees.
What Is a CD Grace Period?
A CD grace period is the amount of time you have after a CD matures to take some sort of action. You typically have around 10 days to cash out your CD and access your money or move it into another account. Otherwise, the CD can renew automatically with the same duration you agreed to before.
Are Savings Accounts Better Than CDs?
A high-yield savings account can be better than a CD when someone feels they’ll probably need access to their money at any time. Meanwhile, CDs can be better for people who are willing to have their money less accessible in exchange for a fixed interest rate.
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
