As the Federal Reserve continues to, savers are in a great position to with interest.
Whileare ideal options for savers who want to build an or contribute over time, offer the opportunity to put your existing savings in an account and lock in long term, without worrying about interest falling in the future.
That's because CDs require you to deposit the full balance upfront to lock in your interest rate over the(which typically ranges from a minimum of three months to 10 years). If you want to withdraw your funds before the term ends, you'll typically face a penalty that could wipe away a portion (or all) of your interest earnings.
Today, manyare around 4.00% to 4.50% or more — though some offer upwards of 5.00% APY. Below, we've gathered some of the top-earning CDs for you to consider if you're looking to maximize interest on your savings.
5 CDs earning at least 5% APY
If you're looking for the best rates on CDs today, you may want to stick with. When rates are lower (and likely to rise) some banks may offer their best rates on long-term CDs lasting three to five years. But today, with rates already high, the sweet spot for the best rates is generally around six-month to one-year CD terms — like the CDs on our list.
It's also important to make sure any financial institution you open a CD with is insured by the FDIC. This insurance protects your balances up to $250,000 per account type, per institution against. Each of the accounts listed below are FDIC-insured.
Bread Savings: 5.20% APY, 1-year term
Bread Savings' one-year CD offers one of the best interest rates for deposits you can get right now. To earn the 5.20% APY, you'll need to deposit at least $1,500 when you open your account. There are no maintenance fees for the account. If you withdraw before the term ends, you'll pay 180 days worth of interest.
If you're looking for a longer CD term, the two-year CD option from Bread Savings is currently offering 5.00% APY.
Bask Bank: 5.10% APY, 6-month term
Bask Bank's highest-earning CD has just a six-month term for its 5.10% APY rate. There are no monthly fees but there is a $1,000 minimum to open the account. If you need to withdraw early, you'll face a penalty worth 90 days of interest on the amount withdrawn.
Bask also offers a one-year CD with a slightly lower 5.00% APY and the same minimum.
CIT Bank: 5.00% APY, 6-month term
The six-month CD option from CIT bank earns 5.00% APY after you deposit at least $1,000 at the opening. There are no fees for keeping the account, but you can incur a penalty of 3 months' interest for withdrawing early.
Citizens Access: 5.00% APY, 1-year term
For a higher $5,000 minimum, you can lock in a 5.00% APY for one year with Citizens Access. This account has no monthly fees but you'll pay a penalty of 90 days interest on your balance for early withdrawals.
Synchrony Bank: 5.00% APY, 6-month term
Synchrony Bank's six-month CD option also earns 5.00% APY on your balances. Unlike other banks on our list, there's no minimum balance required, so you can earn this rate regardless of the amount you deposit. Synchrony charges no maintenance fees, but you'll incur a penalty worth 90 days of interest for withdrawing early.
What to look for in a CD
Interest is one of the top benefits of CDs, but there are other things to look for that can help ensure you're getting the best value from your account.
One is knowing exactly how that interest works.
"When evaluating CDs, be sure to understand how the interest compounds (monthly, quarterly, semi-annually, or annually)," says Steve Schleupner, CFP, founder of You Tree financial planning. The more frequently your account compounds interest, the longer you'll have to subsequently earn interest on that (in addition to your deposit).
Additionally, account details like minimum deposit requirements, early withdrawal penalties and how you move funds in and out of the account are all important. And when the term ends, you'll want to know your options for renewal or withdrawal.
"If getting a CD be sure to ask whether it automatically renews," Schleupner says. "It may not be something a saver wants if rates are lower at the end of the term." If you don't want to renew, you'll usually have the option to decide during a 10-day grace period at the end of your account term.
The bottom line
CDs are one of thefor taking advantage of today's high interest rates over the long term. If you're considering putting your money in a CD, look for accounts with the best APYs and terms and minimums that fit your , so you can lock your money away without penalty.
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