Best CD Rates for January 2021
The best CD rates available are offered by online banks that consistently offer the top rates. When it comes to certificates of deposit (CDs), shopping for a higher rate can be especially rewarding.
That's because, if you find a higher rate today, it can continue to pay off for you over the life of that CD.
The time you spend shopping for the top CD rates today could earn you extra money for months or years to come.
Compare featured CD accounts: Picks of January 2021
Which Banks Have the Best CD Rates
A large number of banks offer CDs, and many compete to have the best CD rates. Use the MoneyRates CD rate-finder tool below to sort through the massive list and find a CD that suits your financial situation and goals.
Select the type of account, deposit amount, and desired CD length. The results show the top rates from our featured banks, but each listing can be expanded to reveal more rates. Click + to see all CD rates for each bank.
A second table below shows more CD products that meet your specifications. (Rates in this table may be higher or lower than the featured-bank rates.) Click + to see more offers.
Fifth Third Bank
Wells Fargo Bank (Rate in NY)
Chase (Rate in NY)
PNC Bank (Rate in NY)
Bank of America (Rate in NY)
TD Bank (Rate in NY)
US Bank (Rate in CA)
Bank of Blue Valley
First Citizens Bank
American Savings Bank
Bank of America (Rate in CA)
Charles Schwab Bank
Amegy Bank of Texas
Bank of America (Rate in IL)
First National Bank of Omaha
The Huntington National Bank (Rate in OH)
BMO Harris Bank
Commerce Bank (Rate in IL)
California First National Bank
Raymond James Bank
Atlantic Union Bank
US Bank (Rate in IL)
Bank of Oklahoma
Genesee Regional Bank
Commercial Bank and Trust of Pennsylvania
KeyBank (Rate in OH)
Bank of the West
M and T Bank (Rate in NY)
The First Bank and Trust Company of Murphysboro
KeyBank (Rate in NY)
American State Bank and Trust Company
Central Pacific Bank
The National Bank of Blacksburg
Aspire Federal Credit Union
City National Bank
People's United Bank
Citizens Trust Bank
Provident Bank (myprovident.com)
TCF Bank (Rate in MN)
First Midwest Bank
Gulf Coast Bank and Trust Company
United Community Bank
Tri City National Bank
First Hawaiian Bank
Watertown Savings Bank (watertownsavings.com)
Heritage Bank (heritagebanknw.com)
Glenview State Bank
First Commonwealth Bank
North American Savings Bank
Bridge Community Bank
Standing Stone National Bank
National Bank of Arizona
North Country Savings Bank
The Farmers National Bank of Canfield
O Bee Credit Union
Superior Savings Bank
Comerica Bank (Rate in CA)
1st Source Bank
PNB Community Bank
Armed Forces Bank
Dollar Bank Federal Savings Bank
The First Central National Bank
Americas Credit Union
Commonwealth Community Bank
The Commercial Bank
The Bank of Castile
Valley National Bank
Inland Bank and Trust
Bryn Mawr Trust
First Financial Northwest Bank
Greenville National Bank
Windsor Federal Savings and Loan Association
Bank of Hawaii
Sandy Spring Bank
CD Rate History - Average APY (%) Rate Trend over Time
Disclosure: MoneyRates.com collects rates on a weekly basis and averages the last rate collected every month for each bank's products to produce this dataset.
Current CD Rate Trends
In 2020, CD rates continued their decline after rising steadily a few years back. The turning point for CD rates happened in 2019 and was exacerbated by the coronavirus pandemic.
Still, the average online CD rate is many times higher than the average rate available from 1-year CDs at traditional, branch-based accounts.
Long-term CD rates drop most
The drop in CD rates was especially steep for long-term CDs. This reflects caution on the part of banks. If rates are going to be falling, banks do not want to get caught having made commitments to pay higher rates on CDs with longer terms.
With long-term CD rates dropping more than short-term rates, the difference between long and short rates shrunk. While longer term rates are somewhat higher, the reward consumers get for committing to a CD with a longer term has been reduced.
Choices for consumers in 2021
Despite that reduced reward for choosing a long-term CD, a falling rate environment might encourage you to choose longer CD terms if you can afford to commit your money for a longer period of time. This may come to pass given recent policy changes announced by the Federal Reserve Board.
Even if you use CD laddering to provide liquidity at regular intervals, you can adjust for a changing rate environment by weighting the short-term portions of your CD ladder more heavily than the long-term portions.
Times when interest rates are changing make it especially important to shop around before you open a CD account. When rates are on the move, banks offering CDs adjust their rates at different times and by different amounts. That can change where the best CD rates are to be found.
Looking ahead, the Federal Reserve has indicated it expects to keep interest rates low even if inflation pressures are felt in the economy in 2021. So, you may not see much more change in CD rates unless there is a big change in the economy. If the economy weakens, there's not much room for rates to drop again; but if growth or inflation happens and the economy strengthens, they might reverse direction and start to rise at some point.
How CDs Work
Unless you are already familiar with CDs, understanding a little about how they work might help you decide which is best for you.
But first, what do these terms mean?
CD term, maturity date, minimum-balance requirement
As a reward for committing your money for a specified period of time, banks generally pay higher interest rates on CDs than savings accounts or money market accounts. In most cases, the longer you commit to a CD, the higher the interest rate will be.
The length of time you agree to commit your money for is known as the CD term. The date at which that term expires is known as the maturity date.
Some banks vary their CD interest rates depending on how much you deposit. In such cases, you have to meet a minimum-balance requirement in order to qualify for the advertised rate.
How long would my funds be unavailable?
CD terms come in a variety of lengths, with the most common ranges being as little as one month to five years.
But watch out for this:
If you want to take money out of the CD before the maturity date, you usually have to pay an early withdrawal penalty. That early withdrawal penalty is an important factor to consider before you lock your money up in a CD.
While a longer commitment is an opportunity to earn more interest, it also limits access to your money. Having to pay an early withdrawal penalty may negate the rate advantage you gained by choosing a longer CD term.
How safe are CD investments?
Certificates of deposit offered by federally insured banks or credit unions are protected by deposit insurance from the FDIC. This covers up to $250,000 worth of deposits per customer at each participating financial institution.
If you have more than one account, you can only be insured for a maximum of $250,000 across all accounts. You can, however, gain more insurance coverage by spreading accounts across different banks.
This applies to most CDs, but there are exceptions:
Some CD products have rates that vary under certain circumstances, and a few don't charge an early withdrawal penalty.
However, these exceptions are fairly rare, so in most cases you will be dealing with the characteristics described above.
What Should You Look for When Choosing a CD?
You could spend all day comparing CDs, but you may wonder if there's a more efficient way to shop.
Here's how to narrow your search:
- Select your CD term
The starting point for choosing a CD should be to decide how long you can afford to lock up your money. That makes it easier to compare rates based on the same CD length.
Most CDs are issued for uniform time periods such as 1-year, 3-years, 5-years, etc. But sometimes banks issue CDs with slightly irregular time periods such as 13 months rather than 1 year as a special promotion. These may meet your needs well enough to be included in your search.
- Confirm deposit insurance
If you want full safety for your CD, you should limit your comparison-shopping to products backed by the FDIC (Federal Deposit Insurance Corporation).
Here's how to make sure the bank you choose is federally insured: FDIC-insured banks must display the FDIC emblem in their branches or, in the case of online-based banks, on their website. Credit unions have deposit insurance through the NCUA and are considered just as safe as traditional banks.
- Investigate early withdrawal penalties
You should try to avoid paying an early withdrawal penalty by choosing a CD term that expires before you are likely to need to access your money.
However, it's still a good idea to compare early withdrawal penalties when choosing a CD just in case something goes wrong. If two CDs have roughly the same term and the same interest rate, it can be a good tie-breaker to choose the one with the lower early withdrawal penalty.
- Compare fixed interest rates
Comparing interest rates is fairly straightforward if you are looking at CDs with the same term length. However, make sure that the rates you are comparing are fixed interest rates for the full term of the CD.
Also, compare annual percentage yield (APY) rather than just the ordinary interest rate because, when rates are fairly close, the bank's compounding method might make a difference as to which CD will pay you more interest.
- Know the maturity date
Knowing the maturity date helps you confirm the length of the CD term and allows you to plan ahead for when you cash out your CD or roll it over into a new one.
- Verify minimum-balance requirements
The MoneyRates CD rate comparison tool above lets you to specify the size of the CD you want. This is important because you should base your rate-shopping on products that are available to your account size.
How We Track CD Rates
Though CD rates are locked in for the term of the CD, the rates banks offer on new CD accounts can change at any time. This is why MoneyRates actively researches CD rates from week to week to bring you the most current information available.
Researchers for MoneyRates regularly monitor close to a thousand CD products from hundreds of financial institutions. These CD accounts represent a range of different terms and minimum balances, giving you plenty of CDs to choose from in searching for one that will meet your needs.
Also, the rates collected by MoneyRates are sorted into different term-length categories and averages are calculated for each of those categories. These averages are used as the basis for the interactive rate trend chart found above. Those averages can give you some context in evaluating whether a given CD product's rates are above or below average.
What is a Certificate of Deposit (CD)?
A certificate of deposit (CD) is a type of deposit product that pays a fixed interest rate on your funds for a specific period of time. Interest rates on CDs are typically higher than for savings accounts because your principal is locked until the CD matures.
CD accounts are typically insured by the Federal Deposit Insurance Corporation (FDIC), depending on whether or not the institution is an FDIC member, making them low-risk investments for savers.
CDs vs. Other Savings Accounts
"Savings accounts, money market accounts, and certificates of deposit are different savings vehicles that can help you manage the liquid funds in your portfolio.
"It's important to choose the right kind of account for your financial needs and lifestyle, though. Picking the wrong account can lead to lackluster dividends, inconvenient access restrictions and hefty fees.
"It's not hard to decide which is right for you. All you need to know is what types of accounts are available, how they help you and how they differ."
>> Read more: Compare savings accounts, money market accounts and CDs.
Certificates of deposit usually require that the funds on deposit remain untouched for a defined period of time; however, many CDs allow the funds to be withdrawn before maturity if you pay a penalty. Need to learn more? Read: When does it make sense to pay an early withdrawal penalty?
Interest rates in general - and CD rates in particular - are not rising at this time. But, of course, that may change. An easy way to stay on top of changing interest rates is to bookmark the America's Best Rates Survey, which is done every quarter here on MoneyRates.com.
At this time, the best 5-year CD rate on a minimum balance of $10,000 is 1.20%.
Whether you are a low-risk investor or someone who can accept investment risk, some portion of your assets should be in safe investment options. Certificates of deposit make good low-risk investments because they are usually FDIC-insured. Learn more: 5 reasons why CDs are perfect for low-risk investors