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Five-year CDs offer some of the highest guaranteed rates of return you can find right now.
Currently, the best 5-year CD rates are at least 3.2o% APY. As of August 2022, the national average APY on a 5-year CD is 0.57%, according to the FDIC.
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 has a CD with a higher rate, it’s possible you’ll accumulate less wealth than with an account that compounds your interest more frequently.
First Internet Bank of Indiana Certificate of Deposit
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.
APY for 5-year CD: First Internet Bank of Indiana Certificate of Deposit
5-year CD early withdrawal penalty: 365 days interest
What to look out for: 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.
Capital One 360 Certificate of Deposit®
Why it stands out: Capital One offers a competitive interest rate on long-term CDs. It also doesn’t require any minimum opening deposits.
APY for 5-year CD: Capital One 360 Certificate of Deposit®
5-year CD early withdrawal penalty: 6 months of interest
What to look out for: Your banking experience may vary depending on where you live. The bank has branches in Connecticut, Delaware, Louisiana, Maryland, New Jersey, New York, Texas, Virginia, and Washington, DC; you can also open CDs online.
Marcus by Goldman Sachs High-Yield CD
Why it stands out: Marcus offers a variety of CDs, and it pays a competitive interest rate on its 5-year CD. The $500 minimum opening deposit for a CD is also lower than most competitors’ required deposits.
APY for 5-year CD: Marcus by Goldman Sachs High-Yield CD
5-year CD early withdrawal penalty: 365 days interest
What to look out for: Marcus is an online-only bank, so you may not have easy access to your account.
Synchrony CD
Why it stands out: Synchrony is offering one of the highest rates on 5-year CD rights now. There’s also a $0 minimum opening deposit.
APY for 5-year CD: Synchrony CD
5-year CD early withdrawal penalty: 365 days interest
What to look out for: Synchrony is an online-only institution, so you may not have easy access to your account.
Pentagon Federal Credit Union Money Market Certificate
Why it stands out: PenFed has some of the highest interest rates on long-term CDs right now.
APY for 5-year CD: Pentagon Federal Credit Union Money Market Certificate
5-year CD early withdrawal penalty: All interest earned OR 30% of the gross dividends you would have earned if the certificate had matured
What to look out for: PenFed has high early withdrawal penalties for CDs, especially if you withdraw money within the first year.
First National Bank of America Certificate of Deposit
Why it stands out: First National Bank of America’s main strength is its competitive interest rate.
APY for 5-year CD: First National Bank of America Certificate of Deposit
5-year CD early withdrawal penalty: 540 days interest
What to look out for: First National Bank of America has high early withdrawal penalties. You can find institutions that charge less than 540 days interest to take out funds early from 5-year CDs.
Other 5-year CDs we considered
We looked at the following 5-year CDs as well. However, our top picks may have higher interest rates, lower minimum opening deposits, and lower early withdrawal penalties, which make them more compelling options.
Delta Community Credit Union Certificate of DepositVyStar Credit Union Certificate of DepositGolden 1 Credit Union Certificate of DepositAlly High Yield CDSuncoast Credit Union Share CertificateBread Savings High-Yield CDCFG Bank Certificate of DepositPopular Direct Certificate of DepositCIT Bank CDWashington Savings Bank CDCitizens Access Online Certificate of DepositBrioDirect High-Yield CDSallie Mae CDAmerant CDAmerican Express CDs®Live Oak Bank Certificate of DepositBMO Harris Certificate of DepositAmerica First Credit Union CertificateRandolph-Brooks Federal Credit Union CertificateNBKC CDDiscover CD (Member FDIC)Connexus Share CertificateTAB CD
Which bank is the most trustworthy?
We’ve compared each company’s Better Business Bureau score. The BBB grades businesses based on factors like responses to customer complaints, honesty in advertising, and transparency about business practices. Here is each company’s score:
InstitutionBBB ratingFirst Internet Bank of IndianaA+Capital One 360A-MarcusA+SynchronyA+PenFedA+First National Bank of AmericaA+
All of our top picks have at least an A- rating from the BBB. A good BBB rating doesn’t necessarily guarantee your relationship with a bank will be perfect. Reach out to current customers or read online customer reviews to see if a bank might be a good fit for you.
Capital One is the only institution on our list with a recent public scandal.
In 2020, The Office of the Comptroller of Currency required Capital One to pay $80 million in a settlement that said the bank had inefficient security practices, which comprised personal information of bank credit cardholders.
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.
Frequently asked questions
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 five years.
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.
See Insider’s picks for the best CD rates »
Which is better, a 5-year CD or a high-yield savings account?
The choice between a 5-year CD and high-yield savings account will depend on several factors.
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.
See Insider’s picks for the best high-yield savings accounts »
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.
See Insider’s picks for the best money market accounts »
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.