Best 5-Year CD Rates Of September 2024 (2024)

While you may find certificates of deposit with terms of 10 years or longer, the five-year CD is the most commonly available longer-term certificate. By choosing a five-year CD, you’re committing to the interest or dividend rate on offer for that extended period. Certificates with five-year terms often pay high APYs in exchange for the longer commitment. First National Bank pays 4.50% APY—topping our list of the best 5-year CD rates.

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• CD Promotions for 2023
• Featured
• Best 5-Year CD Rates
• Summary: Best 5-Year CD Rates of 2024
• Methodology
• Current 5-Year CD Rates
• How To Find the Highest 5-Year CD Rates
• How 5-Year CD Rates Performed Over the Years
• Complete Guide to 5-Year CD Rates
• What Is a 5-Year CD?
• Pros and Cons of 5-Year CDs
• Key Factors To Consider Before Opening a 5-Year CD
• How To Choose a 5-Year CD
• Alternatives to 5-Year CDs
• Recap: Best 5-Year CD Rates
• Are 5-Year CDs Worth It?
• Banks We Monitor
• Frequently Asked Questions (FAQs)
• Next Up In Banking

We’ve compared 142 CD accounts at 84 nationally available banks and credit unions to find some of the best five-year certificates available. See below to learn more about why we picked each account, the pros and cons and to access individual bank reviews.

Annual percentage yields (APYs) and account details are accurate as of August 26, 2024.

To create this list, Forbes Advisor analyzed 142 CD accounts across 84 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. For the star rating, we ranked each institution on 11 data points within the categories of APY, minimums, compound interest schedule, customer experience, digital experience, available terms and overall availability. We also analyzed and ranked each institution by individual term.

The following is the weighting assigned to each category:

• APY: 50%
• Customer and digital experience: 20%
• Minimum deposit requirement: 12.5%
• Compound interest schedule: 7.5%
• Availability: 5%
• Available terms: 5%

CD accounts with higher APYs rose to the top of the list. Minimum deposit requirements of $10,000 or higher affected scores negatively. Accounts with daily compounding interest schedules were scored higher than those with monthly or quarterly schedules. To appear on this list, the account must be nationally available.

To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.

To find the highest five-year CD rates, don’t just look for banks and credit unions that claim to beat the national average. Truly competitive certificate accounts will pay interest rates far above this, making the average APY a less-than-helpful point of comparison.

Instead, compare current rates between the institutions featured on this list and any others you know you like to work with. You can also use our Best CD Rates list to see available APYs and learn the advantages and disadvantages of different banks. Most banks offer CD terms of up to five years.

• What Is a 5-Year CD?
• Pros and Cons of 5-Year CDs
• Key Factors To Consider Before Opening a 5-Year CD
• How To Choose a 5-Year CD
• Alternatives to 5-Year CDs
• Recap: Best 5-Year CD Rates
• Are 5-Year CDs Worth It?
• Banks We Monitor
• Frequently Asked Questions (FAQs)

A five-year CD is a certificate of deposit that keeps your money locked up for five years, or 60 months. CDs typically offer higher interest rates than savings accounts and other types of deposit accounts, making them a good option if you want to grow your money. However, they also require you to leave your cash in the account for the entire term, which can be a drawback if you need to access your money before the CD matures.

CDs are FDIC-insured, which means your money is protected up to $250,000 if the bank fails. They are also relatively low-risk investments, which can be appealing to risk-averse investors.

How Does a 5-Year CD Work?

When you open a five-year CD, you agree to deposit a set amount of money into an account and leave it there for five years. In return, the issuing bank promises to pay you interest at a guaranteed rate. The interest might be compounded daily, monthly, quarterly or annually.

At the end of the five years, the CD matures, and you get back your original deposit plus the interest earned. Alternatively, you can reinvest your principal and earnings by allowing the account to renew for another term. If you decide to withdraw funds before five years are up, you’ll likely pay an early withdrawal penalty and lose some of the interest you’ve accumulated.

Who Should Open a 5-Year CD?

A five-year CD could be a good fit for someone who has a lump sum of cash that they know they won’t need to access for a significant period of time. You can potentially earn more in interest on your funds with a five-year CD than in a traditional savings account at a brick-and-mortar bank.

A five-year CD is a substantial commitment. Before you invest in a long-term CD, it helps to understand the pros and cons of locking up your funds for such a considerable period.

Pros

• Higher yields. Compared to shorter-term CDs, five-year CDs offer some of the highest CD rates available.
• No access to your money. If you want to remove the temptation to tap your savings for an extended period, a five-year CD term can be a useful tool. You’ll generally face a hefty early withdrawal penalty if you feel the itch to make a withdrawal.

Cons

• No access to higher APYs. If certificate of deposit interest rates rise during your five-year CD term, you could miss out on earning a higher interest rate on your funds.
• Early withdrawal penalties. Early withdrawal penalties can be steep. An emergency could force you to tap your five-year CD and cost you dearly.

Opening a five-year CD is a big commitment, so be sure to acknowledge the necessary factors before choosing an account.

• Balance requirement to earn the maximum APY. Ensure you can meet the minimum balance requirement to earn the best APY. Otherwise, you might earn less than expected.
• Minimum deposit for opening. Some CDs require a certain minimum deposit to open the account. So even if you have money set aside for a CD, you may not be able to open the account with the highest APY.
• Time. Five-year CDs are time-deposit accounts, so you must give up access to your funds for five years to collect the advertised interest. Be sure you’re willing to lock your funds away for the entirety of the term. If you withdraw funds early, you’ll sacrifice some or all of your earnings.
• Adding funds. Standard CD accounts don’t allow additional deposits after account opening, but some add-on CDs do. If you want the option to deposit funds throughout your CD term, search online for add-on CDs.

With a five-year CD, you’re looking at a longer-term investment, so you want to be sure that the fixed APY on offer is sufficient to make it appropriate to tie up your funds for five full years, unless you’re willing to risk incurring an early withdrawal penalty. As with any CD, consider:

• APY. With a five-year CD, you’re taking on a higher risk that interest or dividend rates could increase during the term of the CD. Is the APY being offered sufficient to give you confidence in investing at that rate for a five-year period?
• Compounding schedule. To receive the best return on your investment, look for interest or dividends to be compounded on a daily basis, rather than monthly or quarterly.
• Safety. Look for financial institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). In the event of a bank or credit union failure, your deposits would be insured for up to $250,000 per account for each account ownership category.
• Early withdrawal. A very important factor, especially with a longer-term certificate, is the CD’s early withdrawal penalty. If you need to access your money before the five years are over, the early withdrawal penalty could decrease your interest or dividend earnings. Some banks impose withdrawal penalties that could not only reclaim any interest earned but also reduce your principal balance.
• Term. Can you manage your household finances without access to these funds for the full five years? If it’s likely that you’ll withdraw funds before the CD’s maturity date, a savings account or money market account may be a better savings choice.

If you’re thinking a five-year CD isn’t for you, here are a few other options to consider:

• High-yield savings account. High-yield savings accounts may not earn as much as the best five-year CD rates, but you can access your money when you need to—up to six times per month, in some cases. So a high-yield savings account may be a good trade-off if you don’t want to lock your money away.
• Money market account. A high-yield money market account is similar to a high-yield savings account. But it typically comes with check-writing privileges and a debit card, giving you even more ways to access your cash.
• Bonds. A bond can be a good alternative to a five-year CD if you want a low-risk on-ramp to the stock market. But they’re not federally insured like CDs, so they could lose value.
• Treasury Inflation-Protected Securities (TIPS). TIPS are a type of government bond designed to keep up with inflation. They generally pay interest every six months. You can invest in TIPS through the Treasury Direct website or by buying them inside of an ETF or mutual fund.

• First National Bank of America Certificates of Deposit: 3.83% APY
  We chose First National Bank of America because it offers some of the highest CD rates.
• Quontic Bank Certificate of Deposit: 3.50% APY
  We chose Quontic Bank because it’s low minimum deposit makes it perfect for CD laddering.
• Bethpage Federal Credit Union Certificate Account: 3.00% APY
  We chose Bethpage Federal Credit Union because it has the lowest minimum deposit on this list—only $50.
• PenFed Credit Union Money Market Certificates: 3.20% APY
  We chose PenFed Credit Union because it offers a variety of CD terms, and you can choose what happens when your CD matures.
• Connexus Credit Union Share Certificate: 3.46% APY
  We chose Connexus Credit Union because if you can swing a larger deposit, you can earn higher jumbo CD rates.

These financial institutions were included in our research for the best jumbo CD rates: ableBanking, Affinity Federal Credit Union, Ally Bank, American Express, Axos Bank, Apple Federal Credit Union, Bank of America, Bank5 Connect, BankDirect, BankPurely, BankUnitedDirect, Barclays, Bethpage Federal Credit Union, Bread Savings (formerly Comenity Direct), BrioDirect Banking, Capital One, Charles Schwab Bank, Chase, Chevron Federal Credit Union, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Credit Union of Denver, Discover, Dollar Savings Direct, EmigrantDirect, Financial Partners Credit Union, Financial Resources Federal Credit Union, First National Bank of America, Georgia’s Own Credit Union, Golden1 Credit Union, Greenwood Credit Union, HSBC Direct, Hughes Federal Credit Union, Ideal Credit Union, iGoBanking, Investors eAccess, Keybank, Kinecta Federal Credit Union, Limelight, Live Oak Bank, MAC Federal Credit Union, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My eBanc, MySavingsDirect, Navy Federal Credit Union, nbkc Bank, Northern Bank Direct, Northpointe Bank, Nuvision Federal Credit Union, Pacific National Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Quontic, Quorum Federal Credit Union, Radius Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Spectrum Federal Credit Union, State Bank of Texas, State Department Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, EverBank, TotalDirect Bank, U.S. Bank, USAA, USAlliance Federal Credit Union, Vio Bank, Virtual Bank, Wells Fargo and Truist.

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