A certificate of deposit (CD) is an excellent way to build your savings, as long as you don’t need to liquidate your funds on the fly. CDs have some of the most competitive interest rates of any federally-insured bank account, and the rate is locked in for the entire term. According to NerdWallet, online banks and credit unions offer the best rates on CDs, though you may find some banks with competitive rates, too.
Like other investment vehicles, such as a 401(k), you have to pay a fee if you withdraw the money from your CD before the end fo the term. However, some lenders will waive this penalty throughout November, including Marcus by Goldman Sachs, Ally Bank, and CIT Bank.
NerdWallet looked at hundreds of CDs to find which ones have the highest interest rates. If you’re interested in opening a CD account, consider getting one from one of these lenders.
Marcus by Goldman Sachs
Marcus offers fee-free personal loans, high-yield online savings accounts, and generous same-day transfer restrictions. While it lacks important financial products like checking accounts, it does have some of the best CD interest rates of any lender. You can get 0.65% on a one-year and three-year APY and 0.70% on a five-year APY.
Compared to other services, Marcus also has more options for term limits. Marcus CD accounts have a $500 deposit threshold, and Goldman Sach’s CD pledge gives you the best rate in less than ten days after getting your CD. But make sure that you remove your funds when they mature — by default, CDs start over following a ten-day moratorium at the end of the term. Alternatively, Marcus offers three penalty-free CD accounts, which let you withdraw your money early without a penalty.
TAB Bank got its start in the trucking industry, but now everyone who is interested can take advantage of its services. It has several bank account options that provide rewards and competitive returns without charging a monthly fee. TAB also has CDs with varying term lengths from six months to up to five years.
Before traditional banks started lowering their CD rates earlier this year, TAB Bank had some of the best available. Even still, you will find that TAB’s CDs offer some of the highest-yields on the market, like 0.60% on a one-year APY, 0.75% on a three-year APY, and 0.85% on a five-year APY.
TAB Bank requires a minimum deposit of $1,000 when you open a CD account. While other financial institutions may have smaller deposit amounts, this threshold is one of the lowest offered by any other online bank.
Ally Bank is known for its robust interest rates and excellent customer service. As an online bank, it doesn’t have to deal with operating costs associated with running physical locations. As a result, Ally passes these savings onto its customers in the form of better rates and fewer fees than banks with physical branches.
Ally provides three different kinds of CDs, including a high-yield account, Raise Your Rate CDs, and one account that waives fees for early withdrawals. The High-Yield CD gives you three options: 0.65% on a one-year APY, 0.75% on a three-year APY, and 1.00% on a five-year APY.
With the Raise Your Rate CD, you can increase your APY up to two times, based on the duration of the term, to match the current rate promoted for new CDs. Best of all, none of these CDs require a deposit. However, keep in mind that if you decide to open a CD account with Ally, your rate can change depending on the number of funds you have in it. NerdWallet offers a helpful tool to compare Ally’s CD rates with other institutions.
- Burnette, Margarette. “TAB Bank Review: Checking, Savings and CDs.” NerdWallet, 7 Oct. 2020, https://tinyurl.com/yylrh6sk.
- Burnette, Margarette. “Ally Bank Review: Checking, Savings and CDs.” NerdWallet, 19 Aug. 2020, https://tinyurl.com/y4chpo42.
- Tierney, Spencer. “10 Best CD Rates for November 2020.” NerdWallet, 1 Nov. 2020, www.nerdwallet.com/best/banking/cd-rates?trk_copy=hpbestcds.
- Tierney, Spencer. “Marcus by Goldman Sachs Bank Review: Savings and CDs.” NerdWallet, 5 Nov. 2020, https://tinyurl.com/y4ytowty.