Friday, 27 November 2020

The Best CD Rates – August 2018

The Best CD Rates – August 2018
02 Aug
6:45
The Best CD Rates
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Updated August 1, 2018

If you are looking for a better yield on your savings, a high rate CD (certificate of deposit) offered by an online bank could be a good option. Internet-only banks offer much better interest rates than traditional banks. For example, a 12-month CD at Bank of America would require a $10,000 minimum deposit and would pay only 0.07%. At an online bank, you could earn 2.40% with no minimum deposit. (If you would rather get a savings account or money market with no time restriction, look at the best savings accounts or best money market accounts).

The Best CD Rates in August 2018

This list is updated monthly, and competition continues to intensify. Here are the accounts with some of the best CD rates:

Term

Institution

APY

Minimum Deposit Amount

1 year

CIT Bank

2.50%

$1,000

2 years

CD Bank

3.00%

$10,000

3 years

KS StateBank

3.10%

$500

5 years

KS StateBank

3.37%

$500

See a full list of the best CD rates below.

  • 12-Month CD: CIT Bank – 2.50% APY, $1,000 minimum deposit

1-Year Term CD from CIT BankCIT Bank is a bank subsidiary of the publicly traded financial holding company, CIT. Established in 2009, the bank has quickly grown to procure over $42 billion in assets. They’re currently offering one of the highest CD rates available. With $1,000 minimum deposit amount, you can earn a 2.50% APY on a 12-month CD.

  • 6 months – 6 years: Goldman Sachs Bank USA – 0.60% APY – 3.10% APY; $500 minimum deposit
Goldman Sachs Bank USA

Our advertiser Marcus by Goldman Sachs is the online consumer bank of Goldman Sachs Bank USA (the large investment bank). Your funds are FDIC insured, and Goldman offers very competitive rates. Even better: there is only a $500 minimum deposit. So, if you don’t have enough money to meet the minimum deposit of the other banks on this list, or you are looking for another bank for your savings, GS is a good option. It also doesn’t hurt that they also offer some of the best CD rates in the market today. Here are their rates:

  • 6-month: 0.60% APY
  • 9-month: 0.70% APY
  • 12-month: 2.45% APY
  • 18-month: 2.45% APY
  • 2-year: 2.50% APY
  • 3-year: 2.55% APY
  • 5-year: 3.00% APY
  • 6-year: 3.10% APY
  • 3 months – 5 years: Synchrony Bank – 0.75% APY – 2.85% APY; $2,000 minimum deposit
Synchrony Bank

Synchrony used to be a part of GE, and now has an online bank that pays competitive rates. The online deposits are used to fund their store credit card portfolio – and the company is publicly traded. Your deposit will be insured up to the FDIC limit. In a rising rate environment, this is a great way to get a high interest rate without locking yourself into a long term.

  • 3-months: 0.75% APY
  • 6-months: 1.00% APY
  • 9-months: 1.25% APY
  • 12-months: 2.45% APY
  • 18-months: 2.40% APY
  • 24-months: 2.50% APY
  • 36-months: 2.55% APY
  • 48-months: 2.65% APY
  • 60-months: 2.85% APY
  • 1 year – 5 years: Barclays Bank – 2.45% – 3.00% APY, no minimum deposit

12 Month Online CD from Barclays Barclays is one of the oldest banks in the world. Although they’re based in London, they do have a U.S. presence and offer competitive rates on their CDs and savings account. Currently, they’re offering some of the highest CD rates in the market, and they have an edge over the rest of the institutions on this list: they don’t require a minimum balance to earn the APY or open an account. Deposit as little or as much as you’d like into a term of your choice and you can start earning interest as long as the account is funded within 14 days of opening the CD. Additionally, your funds are insured through the FDIC.

  • 1-year: 2.45% APY
  • 2-year: 2.50% APY
  • 3-year: 2.55% APY
  • 4-year: 2.65% APY
  • 5-year: 3.00% APY
  • 3 months – 5 years: Ally Bank – 0.75% APY – 2.75% APY; $0 minimum deposit (higher APY with higher deposit)
Ally Bank

Ally is one of the largest internet-only banks in the country. Ally’s former advertising campaign made it very clear: no branches = higher rates. And Ally has consistently paid some of the highest rates in the country across savings accounts, money market accounts and CDs. For savers with fewer funds, Ally is unique. There is no minimum deposit to open a CD. However, if you have more money, you can earn a higher APY. If you have more than $25,000 to deposit, you can earn between 0.75% APY and 2.75% APY. And one of our favorite features of Ally: they often (although not always) offer preferential rates on renewal. Far too often banks give the biggest bonuses to new customers, but Ally has done a good job of rewarding its existing customers. All deposits at Ally are FDIC insured up to the legal limit.

  • 3-months: 0.75% APY (less than $5k); 0.75% APY ($5k minimum deposit) and 0.75% APY ($25k minimum deposit)
  • 6-months: 1.00% APY (less than $5k); 1.00% APY ($5k minimum deposit) and 1.00% APY ($25k minimum deposit)
  • 9-months: 1.25% APY (less than $5k); 1.25% APY ($5k minimum deposit) and 1.25% APY ($25k minimum deposit)
  • 12-months: 2.10% APY (less than $5k); 2.25% APY ($5k minimum deposit) and 2.40% APY ($25k minimum deposit)
  • 18-months: 2.15% APY (less than $5k); 2.35% APY ($5k minimum deposit) and 2.50% APY ($25k minimum deposit)
  • 3-year: 2.50% APY (less than $5k); 2.55% APY ($5k minimum deposit) and 2.55% APY ($25k minimum deposit)
  • 5-year: 2.50% APY (less than $5k); 2.65% APY ($5k minimum deposit) and 2.75% APY ($25k minimum deposit)
  • 1-Year CD from a Credit Union: PenFed Credit Union – 2.35% APY, $1,000 minimum deposit

12 Month Money Market Certificate from PenFed Credit UnionPenFed is a credit union that offers very competitive interest rates. You need to join the credit union in order to benefit from their products. If you have a military or government affiliation, it is free to join. Otherwise, you would need to join an organization like Voices for America’s Troops, which costs $17.00. Once you are a member, you can open PenFed products (including this certificate) online. Your deposit would be insured by the NCUA, which is the National Credit Union Administration. There is a $1,000 minimum deposit for the one-year certificate.

  • 2-Year CD: CD Bank – 3.00% APY, $10,000 minimum deposit

24 Month CD from CD BankCD Bank is the online division of TBK Bank, which is located in Dallas, Texas. With the help of TBK Bank’s backing, the two institutions have over $3 billion in assets. Currently, CD Bank is offering a 24-month CD with a 3.00% APY. There is a steep minimum deposit amount of $10,000, but your deposit is FDIC-insured.

  • 2-Year CD from a Credit Union: Communitywide Federal Credit Union – 2.90% APY, $2,000 minimum deposit

24 Month Share Certificate from Communitywide Federal Credit UnionCommunityWide Federal Credit Union was established in 1967 to provide quality financial services to those residing on the west side of South Bend, IN. Today, the credit union operates similarly even though they’ve expanded their footprint in Michigan. Thanks to their online services, however, their able to service customers nationwide. Anyone can become a member of this credit union if they are a donor member of one of their partner organizations, such as the Y.M.C.A. Once you become a member, you can apply for their 24 month CD. You’ll need to deposit $2,000 in order to earn their outstanding 2.90% APY. This account can be managed online or through their mobile app. Deposits made to Communitywide Federal Credit Union are insured by the NCUA.

  • 3-Year CD: KS StateBank – 3.10% APY, $500 minimum deposit

3 Year CD from KS StateBankKS StateBank is mainly a brick-and-mortar institution located in Kansas and Phoenix, Arizona. However, they also offer online services to reach those not in their area. Sometimes, they even offer special rates to their online customers. While this 3-year CD is not an online special, it is a term that can be opened online rather than at a branch. With a minimum deposit amount of $500, you can begin earning an APY of 3.10%. KS StateBank not only offers online banking, they also have a mobile banking app. Deposits made to this bank are FDIC-insured.

  • 3-Year CD from a Credit Union: Greenwood Credit Union, 3.25% APY, $1,000 minimum deposit
Greenwood Credit Union

Greenwood Credit Union is open to anyone and everyone. The only requirement to become a member with this credit union is to open their Share Savings Account with a minimum deposit amount of $5. You’ll also have to maintain that amount in the account to remain an active member. When you go to apply for membership, you can also add that you want to open their 30 month CD. You’ll need to deposit $1,000 in order to earn their outstanding 3.25% APY. This deposit will be in addition to the $5 to open the Share Savings Account. Accounts can be managed online or through their mobile app. Deposits made to Greenwood Credit Union are insured by the NCUA.

on Greenwood Credit Union’s secure website
  • 5-Year CD: KS StateBank – 3.37% APY, $5,000 minimum deposit

5 Year CD from KS StateBankOnce again KS StateBank lands a top spot on our list. Its 5-year CD has an APY of 3.37%, which is one of the highest currently available. You’ll only need $500 to deposit to open the account.

  • 5-Year CD from a Credit Union: CommunityWide Federal Credit Union – 3.30% APY, $2,000 minimum deposit

60 Month Share Certificate from Communitywide Federal Credit UnionCommunityWide Federal Credit Union also makes another appearance on our list with their 60-month CD. With a $2,000 minimum deposit, you could earn a 3.30% APY.

3 Questions To Ask Before You Open A CD

1. Should I just open an online savings account instead?

With a CD, the saver and the bank make stronger commitments. The saver promises to keep the funds in the account for a specified period of time. In exchange, the bank guarantees the interest rate during the term of the CD. The longer the term, the higher the interest rate – and the higher the penalty for closing the CD early. With a savings account, there are few promises. You can empty the account without paying a penalty and the bank can change the interest rate at any time.

If you have a high level of confidence that you do not need to touch the money for a specified period of time, a CD is a much better deal. However, if you think you might need to use the money in the next couple of months, a savings account is a much better idea.

You can earn a lot more interest with a CD. Imagine you have $10,000 and know that you do not need to touch the money for two years. In a high-yield savings account earning 1.60%, you would earn $322.56 over two years. If you put that money into a 2.51% CD, you would earn $508.30. Given the ease of switching to an online CD, the extra interest income is easy money.

2. What term should I select?

The early withdrawal penalties on CDs can be significant. On a 1-year CD, 90 days is a typical penalty. And on 2 and 3 year CDs, a 6-month penalty is common. The impact of the penalty on your return can be significant. If you opened a one-year CD with a 2.20% APY and closed it after six months, you would forfeit half of the interest and earned only 1.11%. You would have been better off with a savings account paying 1.60%.

The worst case scenario is with the longest CDs. 5-year CDs usually have a one-year penalty for taking out funds early. If you open a 5-year CD and close it quickly, you could actually end up losing money.

Given the early penalties, you need complete confidence that you will not need to withdrawal the money early. Ask yourself this question: “do I have 90% confidence that I will not need access to the cash during the CD term?” If you don’t have confidence, go for a shorter term or a savings account.

3. Should I consider my local bank or credit union?

The interest rates shown in this article are all from online banks that offer products nationally. Our product database includes traditional banks, community banks and credit unions. If traditional banks offered better rates, they would have been featured in this article. The internet-only banks have dramatically better interest rates. That should not be surprising. Because internet-only banks do not have branches, they are able to pass along their cost savings to you in the form of higher interest rates.

However, you can always visit your local bank or credit union and ask them to beat the rates listed in this article. The chance of getting a better deal is extremely low (remember that Bank of America is only paying 0.07%), but you can try.

How To Find The Best Account

If you don’t find an account that meets your needs in this article, you can use the MagnifyMoney CD tool to find the best rate for your individual needs. Input your zip code, deposit amount and term. The tool will then provide you with CD options, from the highest APY to the lowest.

You can learn more about us and how we make money here.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements

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Source: https://www.magnifymoney.com/blog/earning-interest/best-cd-rates967994263/

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