Right now, the best 5-year CD rates are at least 1.20%. You may be able to find longer terms with slightly higher rates, but most institutions' longest terms are five years. Five-year CDs offer some of the highest guaranteed rates of return you can find right now.
All 5-year CDs with the following banks are FDIC insured , and all certificates with the credit unions are federally insured by the NCUA. For the most part, banks compound your interest daily , and credit unions compound your interest monthly. This means that even if a credit union pays a higher rate, it's possible you'll accumulate less wealth than with an account that compounds your interest more frequently.
Learn more about our top picks
Delta Community Credit Union CD
Why it stands out: Delta Community Credit Union pays competitive rates, and if you need to withdraw funds before your CD matures, its penalties are lower than what most institutions charge.
5-year CD early withdrawal penalty: 270 days interest
What to look out for: Membership and compound interest. Membership is available for residents of several Georgia counties, as well as for employees of numerous companies, members of specific associations, and family members of current Delta Community members. As with many credit unions, your interest is compounded monthly rather than daily, which will limit how much wealth you build. Depending on your balance, this may or may not make a significant difference.
Navy Federal Credit Union Standard Certificate
Why it stands out: Navy Federal Credit Union pays higher rates for higher balances, but its APY is competitive regardless. For its 5-year term, early withdrawal penalties are lower than what many institutions charge. Navy Federal compounds your interest daily like most banks would, unlike many credit unions that compound monthly.
5-year CD APY: 1.25% for balances under $100,000; 1.30% for balances over $100,000
5-year CD early withdrawal penalty: 180 days interest
What to look out for: Membership and tiered APY system. You or a family member must have ties to the military for you to become a member of Navy Federal. Also, keep in mind that you won't earn the highest APY unless your balance is at least $100,000.
America First Credit Union Certificate
Why it stands out: America First Credit Union pays a good APY and charges low early withdrawal penalties. Its mandatory $500 deposit is lower than what many competitors require.
5-year CD early withdrawal penalty: 180 days interest
What to look out for: Membership and compound interest. For the most part, membership is restricted to people who live in certain counties in western US states. America First compounds your interest monthly, so you'll earn less than with an institution that pays the same rate but compounds daily.
Why it stands out: Synchrony pays a good rate on 5-year CDs, and you can speak to a live customer service agent online 24/7.
5-year CD early withdrawal penalty: 365 days interest
What to look out for: Minimum deposit. You'll need at least $2,000 to open a CD with Synchrony.
Why it stands out: TIAA's main strength is that it pays competitive rates on its CDs.
5-year CD early withdrawal penalty: 456 days simple interest
What to look out for: Opening deposit and early withdrawal penalty. You'll need at least $5,000 to open a CD with TIAA Bank, and the early withdrawal penalty for a 5-year term is higher than what some of our other top picks charge.
Why it stands out: NBKC pays a good rate for its 5-year CD. It also gives you the option to open an additional 1-year Add-to Starter CD with no opening deposit. Most CDs only allow you to place an opening deposit, but the Add-to Starter CD lets you deposit more money throughout the first year.
5-year CD early withdrawal penalty: 540 days interest
What to look out for: Variable rates and high early withdrawal penalty. Unlike most CDs, NBKC CDs' rates can change after you open the account. This can be good if rates go up, but it also means your APY could decrease. The 540 days interest penalty is also pretty steep.
First Internet Bank of Indiana CD
Why it stands out: First Internet Bank of Indiana pays a good rate for 5-year CDs, and contrary to what the bank's name may lead you to believe, this online bank is available to residents of all US states.
5-year CD early withdrawal penalty: 365 days interest
What to look out for: Monthly compounded interest. First Internet Bank of Indiana compounds your interest monthly, not daily, so you'll earn less in the long run. Depending on how much money is in your CD, this may or may not make a significant difference.
Why it stands out: You'll earn a good interest rate with a relatively low opening deposit of $500. If you choose to withdraw funds early, VyStar lets you make partial withdrawals; many institutions make you completely empty your CD if you need to take out anything before the CD matures.
5-year CD APY: 1.40% for balances up to $49,000; 1.50% for balances of $50,000 or more
5-year CD early withdrawal penalty: 365 days interest
What to look out for: Membership, compound interest, and tiers. For the most part, membership is for residents of Georgia and Florida. VyStar compounds your interest monthly rather than daily, and you need a balance of at least $50,000 to earn the highest APY.
Why it stands out: Golden 1 Credit Union pays high rates, even on its lower balance tier. You'll only need $500 to open a CD.
5-year CD APY: 1.30% for balances under $100,000; 1.40% on balance of $100,000 or more
5-year CD early withdrawal penalty: 365 days interest
What to look out for: Membership, compound interest, and tiers. Anyone who lives or works in California can become a member of Golden 1 Credit Union, and people who work for certain companies can qualify. Golden 1 compounds your interest monthly instead of daily, and you can't earn the highest APY unless you have at least $100,000 in your CD.
Why it stands out: Quontic pays a good rate, and its mandatory $500 deposit is lower than what many competitors require.
5-year CD early withdrawal penalty: 2 years interest
What to look out for: Early withdrawal penalty. The 2-year interest charge to take out funds early is pretty hefty.
First National Bank of America CD
Why it stands out: First National Bank of America's main strength is its high APYs.
5-year CD early withdrawal penalty: 540 days interest
What to look out for: Early withdrawal penalty. You can find institutions that charge less than 540 days interest to take out funds early from 5-year CDs.
Connexus Share Certificate
Why it stands out: Connexus pays a good rate on its CDs, and it's pretty easy to qualify for membership.
5-year CD early withdrawal penalty: 365 days interest
What to look out for: Opening deposit and quarterly compounded interest. You'll need at least $5,000 to open a CD with Connexus, and it compounds your interest quarterly not daily, or even monthly. This will affect how much wealth you'll build over the term.
Randolph-Brooks Federal Credit Union Certificate
Why it stands out: Randolph-Brooks pays competitive rates on its 5-year CDs. It's relatively easy to become a member if you're a Texas resident.
5-year CD early withdrawal penalty: 300 days interest
What to look out for: Membership and compound interest. There are ways to become a member if you don't live in Texas, but there are other credit unions that are easier to join. Randolph-Brooks also compounds interest monthly rather than daily.
Other 5-year CDs we considered
We looked at the following 5-year CDs as well, but all of them currently have lower rates than our winners:
Frequently asked questions
Why trust our recommendations?
Personal Finance Insider's mission is to help smart people make the best decisions with their money. We understand that "best" is often subjective, so in addition to highlighting the clear benefits of a financial product or account a high APY, for example we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.
What is a CD?
A CD, or certificate of deposit, is a time-sensitive savings account that usually holds your money at a fixed interest rate for a specified period of time. If you don't need immediate access to your savings, a CD can guarantee a return on your money since you lock in a fixed APY for the term of the CD.
With most institutions, you typically won't be able to deposit more money or access your funds before the CD matures without paying a penalty.
You will, however, earn interest on the amount and have the option to collect those payments monthly or reinvest them into your CD. Most banks offer varying rates for different terms and deposit amounts in many cases, the longer the term, the higher the rate.
At the CD's maturity date, you'll typically have a 10- to 14-day grace period in which you can withdraw your money and close the account or renew the term.
What is a 5-year CD?
With a 5-year CD, you stash away your money for 60 months and typically earn a fixed rate. You have the option to renew your CD at the end of the five-year period, or close the account and pocket the money.
How do CD rates work?
Most CDs lock in your rate for the entire term. For example, if you open a 5-year CD at a 1.20% APY, you'll earn 1.20% for the entire five years. If you renew your CD after it matures, you'll earn the new rate available in a year.
There are exceptions to the fixed-rate rule. Some institutions offer variable-rate CDs or CDs that allow your rate to change after a predetermined amount of time.
Which is best: a 1-year, 3-year, or 5-year CD?
Terms of one, three, and five years are some of the most common CD options. Your choice will likely depend on how soon you plan to need the money and which term pays the highest rate. For the most part, longer terms pay higher rates but that isn't always the case.
Going for a shorter term gives you the opportunity to snag a better APY if rates are up in a year. With a 3-year or 5-year CD, you could miss out on higher rates. But on the other hand, you could avoid lower rates with a 3-year or 5-year term if rates drop later.
Many experts recommend CD laddering. With this strategy, you open multiple CDs with different term lengths so you can take advantage of higher rates with longer terms, but also access some of your money earlier. For instance, you might open 1-year, 3-year, and 5-year CDs at the same time, which means you'll get some of your money back in one year, then more in three years, then more in five years.
Which is better, a 5-year CD or a high-yield savings account?
First, an institution typically pays a higher rate for a 5-year CD than for a savings account.
A CD also locks in your rate for the entire term. If rates are dropping, this could make the CD a better choice, because your savings account APY could decrease over the next few months. If rates are rising, the savings account might be a better fit, because your rate could go up. Either way, there's a good chance rates will fluctuate over a five-year period.
It also depends on when you'll need to access your money. You should be able to access funds from your savings account regularly but if you need access to money from your 5-year CD before it matures, then you'll have to pay a fee.
You can also continuously add money to your savings account, whereas most 5-year CDs block you from making additional deposits after opening the account.
Which is better, a 5-year CD or a money market account?
Like with a high-yield savings account, you may prefer a money market account over a CD if you want quick access to your money. Money market account rates also fluctuate, so you may prefer a money market account if rates are rising, but a CD if rates are dropping. Still, remember that rates will likely go up and down over a five-year term.
Many banks require higher deposits for money market accounts than CDs, which could affect your decision. It's also good to remember that you can add more funds to your money market account over time, while a CD only allows an opening deposit.
Which is better, a 5-year CD or another investment account?
CDs aren't generally considered investments the same way something like an index fund , which puts your money into the stock market, is. Instead, a CD is typically viewed as a type of savings account, and your potential for losses and gains your risk is much more limited. Because the stock market is risky, experts generally don't advise investing money you'll need in the next five years. In the case of a stock market drop, you wouldn't have time to make up your losses.
If you need to access your money in five years and want a guaranteed rate of return, a 5-year CD is a better choice than a different type of investment account.
If you're comfortable parting with your money for longer and want to take more risk with your money, then you may want to invest in the stock market. One way to do this is through tax-advantaged retirement accounts, like a 401(k) or IRA, which grows your money over decades. Another is through brokerage accounts , which are useful tools to build long-term wealth, but can't guarantee a given return like a CD can.
There is such a thing as an IRA CD , which is sort of a combo savings/investment account. It's a safe investment tool that may be a worthwhile option for people who are close to retirement age.
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