Best CD Rates of June 2024 (2024)

• Our Top Picks
• TotalDirectBank
• INOVA Federal Credit Union
• Nuvision Federal Credit Union
• DR Bank
• Credit Human
• Vibrant Credit Union
• Wellby Financial
• BMO Alto
• First National Bank of America
• See More (6)

• Frequently Asked Questions

TotalDirectBank is a division of City National Bank of Florida, which originally was established as North Shore Bank in 1946. TotalDirectBank keeps the product lineup simple, with money market accounts and CDs with terms of up to five years. Anyone in the U.S. (except those in Florida, Puerto Rico, American Samoa, Guam, Northern Mariana Islands, and U.S. Virgin Islands) can open a money market or CD account.

INOVA Federal, headquartered in Elkhart, Indiana, has six branches in Indiana and one in Berkeley, California. It also is part of the CO-OP network of shared branches and ATMs. The credit union was established in 1942 for the employees of Miles Laboratories.

If you’re not eligible for membership through your employer, you can join by joining the Tru Direction Financial Literacy Program with a $5 donation. You also must keep $5 on deposit at the credit union.

INOVA Federal offers personal and business accounts, loans, credit cards, insurance products, and CDs with terms from 30 days to six years.

In operation for nearly a century, Nuvision Federal Credit Union is based in southern California and was originally the credit union of Douglas Aircraft. It offers loans and credit cards along with checking, savings, and money market accounts, IRAs, and CDs with 3-month to 5-year terms. You can join the credit union if someone in your household is a member, you’re an employee of Boeing or another employer in the Select Employer Group, or you’re willing to join the American Consumer Council for as little as $8.

DR Bank was founded in 2006 in Connecticut, where it still operates two branches. The bank offers all standard banking products. Accounts are available nationally through digital banking.

Credit Human was formed in San Antonio, Texas, in 1935 to serve members of the National Federation of Federal Employees Local #28 union. It took the name Credit Human in 2016. The credit union has several branches throughout Texas, but members nationwide can access their accounts through online banking, a mobile app, or through CO-OP's shared branching network. Credit Human is not part of a fee-free ATM network.

Membership is available nationwide to anyone who joins the American Consumer Council, and Credit Human agrees to pay the fee to join the ACC.

Vibrant Credit Union is based in Moline, Illinois, and was started in 1935 by eight people as Deere Harvester Credit Union.

It has branches in Illinois, Iowa, and Indiana, but membership is available to anyone nationwide who opens a savings account with a minimum $5 deposit. Online banking is available, and the credit union also has a mobile app compatible with both Android and Apple devices. Account holders also can manage their accounts at shared branches that are part of the CO-OP network.

Wellby Financial was founded in Houston, Texas, in 1961 to support employees of the Johnson Space Center and its mission to the moon. Since then, it has grown to have 125,000 members and hold $2.49 billion in assets. Anyone is eligible to join the credit union through membership in the American Consumer Council.

BMO Alto is an online-only division of BMO Harris, which is a U.S. subsidiary of Bank of Montreal, the eighth-largest bank in North America. BMO has been around for over 200 years. It offers a full line of personal and business banking products and services, including checking, savings, retirement accounts, mortgages, credit cards, lines of credit, and more.

The grand-sounding First National Bank of America is actually based in small-city America: East Lansing, Michigan, specifically. In addition to its headquarters in East Lansing, it also operates branches in Grand Rapids, Michigan, and Traverse City, Michigan.

Those who do not live near one of its branches easily can open an account online and manage it via the website or an app compatible with Android and Apple devices.

A CD holds your money for a specified length of time (such as six months or two years), and your bank or credit union pays you interest based on the amount of your deposit and the length of the term.

When you use a CD, you typically commit to leaving your money in the account. In return for that commitment, banks usually pay higher interest rates than they do in more liquid savings accounts. But if you need your money before the term ends, you may have to pay an early withdrawal penalty.

Banks and credit unions often penalize you for withdrawing funds from a CD before the term is up. In many cases, they calculate the penalty as a certain number of months’ worth of interest. For example, Discover Bank charges six months’ worth of interest if you pull out of a 1-year CD early. That penalty increases to 18 months’ worth of interest on 5-year CDs.

Paying a penalty is never fun, and it can be particularly problematic when you cash out early in the term. Depending on how long your money stays in a CD, you might even receive less back than you originally deposited.

CDs often pay higher interest rates than you can earn in a savings account. Banks and credit unions tend to pay more when you agree to lock up your money for a specific length of time. Plus, if interest rates fall and the bank pays new customers lower rates, you keep earning the same higher APY throughout the term of your CD.

To earn a higher rate, however, you need to commit to leaving your money with the bank. Pulling out early may result in early-withdrawal penalties, which can wipe out your earnings. Also, if interest rates rise, you may be stuck with a comparatively low rate until your CD matures.

Pros

• Higher interest rates than savings accounts

• Earnings won’t change if interest rates drop

Cons

• Must lock up your money

• Potential early withdrawal penalties

• Might get stuck with a low rate while other interest rates rise

A CD ladder is a set of multiple CDs you purchase with different maturity dates, which helps you avoid locking up all of your money at once. With that approach, you might purchase a series of CDs with maturities in six-month increments. As a result, you periodically have cash available for planned (and unplanned) needs, or you can buy a new CD at the going rate. For example, if you have $10,000 to put into CDs, you might invest the following:

• 6-month CD: $2,500
• 12-month CD $2,500
• 18-month CD $2,500
• 24-month CD: $2,500

Ideally, every time one of these CDs matures, you would buy a new 24-month CD with the proceeds to begin the cycle again.

When your funds are federally insured, they’re safe from bank and credit union failures. There may be a brief delay in receiving your money (or no delay at all) immediately following a bank failure, but when you’re using CDs, you’re probably weren’t planning to use the funds immediately anyway. To verify that your cash is protected, look for the following types of coverage:

• FDIC insurance at banks
• NCUA coverage at federally-insured credit unions

Both of these programs insure your money up to $250,000 per depositor, per institution, so it’s critical to keep your balances below the insured limits. You might be able to have more than $250,000 insured at one place, depending on how your accounts are titled.

Several factors affect how much you earn from a CD. For starters, banks decide how competitive they want to be. If they have an appetite for new customers, they may nudge rates higher. Economic factors also influence CD rates. As rates rise or fall in financial markets, savings and CD rates tend to move in synchrony, although they might not react immediately (especially when it’s time to pay you more).

The length of your CD is critical. In general, you might expect longer-term CDs to pay more because you’re taking more risk—you’re committing to more months or years of unknowns. But the relationship is not always as direct as you might think. For example, if banks think rates might fall in the next several years, long-term CDs might pay rates that are similar to (or lower than) 1-year and 2-year CDs.

As you shop among banks, find a CD that’s the best fit for your finances. Pay careful attention to the features below.

• Interest rate: The higher the rate, the faster your money grows. The easiest way to compare rates is to use the annual percentage yield (APY), which banks typically provide for you. That quote takes compounding frequency into account and helps you make an apples-to-apples comparison.
• Minimum deposit: How much do you need to invest to use a CD? Some banks do not set any minimum, while others might require more than $1,000 to get started.
• Fees: Monthly fees in CD accounts are rare, but it's smart to verify that you won't pay additional charges to use a CD. Anything you pay will reduce your earnings.
• Joining fees: All of the credit unions we include on our best CD lists are available nationwide, but sometimes you’re required to make a donation to an organization in order to join the credit union. This fee is usually small, but it’s one more hoop you have to jump through to get the CD.
• Penalties: Examine the early-withdrawal penalties, and evaluate how likely it is that you’ll need to cash out early. Weigh the pros and cons of liquid CDs.

Calculate how much extra you can earn by getting the highest rate available, and decide if that’s what you really need. If you have a relatively small account balance, a difference of a few tenths of a percent may not make much difference and there may be other factors that are more important to you.

As you compare banks, you may notice language about compounding frequency (daily or monthly compounding, for example). All other things being equal, more frequent compounding is best. But you can ignore those details by simply comparing each bank’s APY, which includes compounding.

Some CDs allow you to withdraw money before maturity. These “no-penalty” or “liquid” CDs can provide flexibility for unexpected expenses and other situations. For example, you might be allowed to withdraw 100% of the money you deposit after six days, but the account pays a guaranteed rate of interest for 11 months.

What’s the catch? In many cases, no-penalty CDs start at a lower rate than standard, inflexible CDs. You enjoy the benefit of flexibility, and the bank has less certainty about how long it can use your money. As a result, you earn slightly less.

CDs are excellent tools for growing your money, but other products from banks and credit unions might also do the job.

Savings accounts provide more flexibility when you need money, but they don’t have fixed rates. That can work in your favor when rates rise. But if rates fall or remain stagnant, you might be better off in a CD.

Money market accounts are similar to savings accounts, but they may make it easier to spend money from your account. Some money market accounts provide a debit card or checkbook for spending, while others may require you to move your savings to a checking account before you spend.

Article Sources

1. City National Bank. "History."

2. TotalDirectBank. "Leverage Our Financial Strength and Stability."

3. TotalDirectBank. "FAQs."

4. Discover Bank. "Certificate of Deposit."

5. NCUA. "How Your Accounts Are Federally Insured."

6. FDIC. "Are My Deposit Accounts Insured by the FDIC?"

7. Internal Revenue Service. "Topic No. 403, Interest Received."

8. Internal Revenue Service. "Topic No. 451, Individual Retirement Arrangements (IRAs)."