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If you want to grow your money but keep it safe from the turbulence of the stock market, a certificate of deposit (CD) may be a good option.
A 6-month CD is a short-term CD that lets you maintain a fixed interest rate for a short period of time. It may a good option if you’re not comfortable parting with your money for more than six months.
6-month CD rates at the largest US banks
As of August 2022, the national average APY on a 6-month CD is 0.22%, according to the FDIC.
However, it may be important to you to bank with a company you’re familiar with. Here are the rates you’ll earn on a 6-month CD with some of the most popular institutions:
BankAPYNext stepsCitibank1.10%Citibank Citibank Fixed Rate Certificates of Deposit (CDs)Capital One1.30%Capital One Capital One 360 CDs®PNC Bank0.01% to 0.03%PNC Bank PNC Fixed Rate Certificate of DepositTD Bank0.05%TD Bank TD Bank Choice Promotional Certificate of DepositBank of America0.03%Bank of America Bank of America Standard Term Certificate of DepositChase Bank0.01% to 0.05%Chase Chase Certificate of Deposit (CD)US Bank0.05%US Bank US Bank Certificate of DepositCharles Schwab Bank2.82%Charles Schwab Bank Charles Schwab Bank Certificate of DepositWells Fargo0.01% to 0.02%Wells Fargo Bank Wells Fargo Step Rate Certificate of Deposit
Ally High Yield Certificate of Deposit
Why it stands out: Ally lets you open a CD with $0 and you’ll earn a great interest rate. The early withdrawal penalties for an Ally CD are a bit lower than some of our other top picks.
Interest for 6-month CD: Ally High Yield Certificate of Deposit
6-month CD early withdrawal penalty: 60 days interest
What to look out for: Ally doesn’t have any physical branches, so you’ll have to be comfortable with online-only banking. Other financial institutions may also offer higher interest rates right now.
Capital One 360 Certificate of Deposit®
Why it stands out: Capital One has a competitive interest rate for 6-month CDs. There’s also no minimum opening deposit.
6-month CD early withdrawal penalty: 90 days simple interest
Interest for 6-month CD: Capital One 360 Certificate of Deposit®
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. If you don’t live nearby any of these areas, your banking experience will be completely online.
Citi Fixed Rate Certificates of Deposit
Why it stands out: Citibank has a competitive interest rate for 6-month CDs.
6-month CD early withdrawal penalty: 90 days simple interest
Interest for 6-month CD: Citi Fixed Rate Certificates of Deposit
What to look out for: Other CD rates at Citibank aren’t as competitive. The minimum opening deposit required for a CD also may depend on where you live.
First Internet Bank of Indiana Certificate of Deposit
Why it stands out: First Internet Bank of Indiana pays a good rate for 6-month 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.
Interest for 6-month CD: First Internet Bank of Indiana Certificate of Deposit
6-month CD early withdrawal penalty: 180 days interest
What to look out for: First Internet Bank of Indiana compounds your interest monthly, not daily. Depending on how much money is in your CD, this may or may not make a significant difference. You can also find a bank that charges less for an early withdrawal from a 6-month CD.
Quontic Certificate of Deposit
Why it stands out: Quontic pays a competitive interest rate on its 6-month CD. It also has a $500 minimum opening deposit.
Interest for 6-month CD: Quontic Certificate of Deposit
6-month CD early withdrawal penalty: All interest earned
What to look out for: Quontic charges high early withdrawal penalties. If you are worried about taking money from a CD early, you may prefer one of our other top picks.
Synchrony CD
Why it stands out: Synchrony pays higher interest rates on CDs than many other financial institutions.
Interest for 6-month CD: Synchrony CD
6-month CD early withdrawal penalty: 90 days interest
What to look out for: The early withdrawal penalties are a bit steep, but some of our other top picks have lower penalties.
TAB Certificate of Deposit
Why it stands out: TAB Bank pays good rates. You get to choose how you receive your interest — keep it in your CD, receive a check, or transfer the money to another TAB bank account.
Interest for 6-month CD: TAB Certificate of Deposit
6-month CD early withdrawal penalty: 90 days interest
What to look out for: Some of our other top picks have lower early withdrawal penalties.
TIAA Yield Pledge® Certificate of Deposit
Why it stands out: TIAA pays a competitive interest rate for its 6-month CD.
Interest for 6-month CD: 1% APY
6-month CD early withdrawal penalty: One-fourth of total interest earned (approximately 45 days)
What to look out for: TIAA requires a minimum opening deposit of $1,000. Other financial institutions may have lower initial deposits.
Other CDs that didn’t make the cut and why
Navy Federal Credit Union Standard Certificate: Navy Federal Credit Union has solid interest rates, but our top picks have higher interest rates.Marcus by Goldman Sachs High-Yield CD: Marcus offers a solid interest rate but some of our top picks offer higher rates or lower minimum opening deposits.NBKC CD: NBKC offers competitive interest rates on long-term CDs, but its short-term CDs aren’t as strong. Live Oak Bank CD: Live Oak Bank offers a competitive interest rate, but you’ll need a minimum opening deposit of $2,500. Sallie Mae Certificate of Deposit: Sallie Mae has a solid interest rate, but you’ll need a minimum opening deposit of $2,500. Discover CD: Discover has competitive interest rates on long-term CDs, but its short-term CDs aren’t as strong. Pentagon Federal Credit Union Money Market Certificate: Pentagon Federal Credit Union offers a competitive interest rate, but the early withdrawal penalties are high compared to our top picks. Popular Direct CD: Popular Direct has great interest rates on long-term CDs, but its short-term CDs aren’t as strong. Charles Schwab Bank Certificate of Deposit: Charles Schwab has brokered CDs, meaning Charles Schwab doesn’t actually own the CD. Instead, Charles Schwab acts as the middleman for you and the bank that owns the CD. Depending on how your bank, you may prefer open a CD directly with the financial institution.American Express CD: American Express offers a good interest rate, but our top picks offer even higher rates.BMO Harris CD: BMO Harris requires a minimum opening deposit between $1,000 to $5,000 to open a CD. CIT Bank Certificate of Deposits (CD): Other institutions on our list offer higher interest rates right now.
Which bank is the most trustworthy?
We’ve compared each financial institution’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 GradeFirst Internet Bank of IndianaA+TAB BankA+CitiFCapital OneA-Quontic BankA+AllyC-TIAA A+SynchronyA+
Capital One, Ally, and Citi have lower than A rating from the BBB.
According to the BBB, Capital One received an A- rating due to the volume of customer complaints. Ally received a C- due to a high volume of customer complaints and 3 unresolved complaints filed against the business. Citi has an F rating due to unresolved complaints and government action taken against the business.
Capital One, Citi, and TIAA have also been involved in recent public controversies.
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.
In 2020, Citi was required to pay $400 million in the settlement because the Federal Reserve and Office of the Comptroller of the Currency stated the bank failed to recognize money laundering by its customers.
In 2021, TIAA agreed to pay $97 million in restitution to customers who were pressured into moving retirement investments into the company’s higher-fee accounts.
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 6-month CD?
With a 6-month CD, you stash away your money for six months and typically earn a fixed rate. You have the option to renew your CD at the end of the 6-month 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 6-month CD at a 0.40% APY, you’ll earn 0.40% for the entire six months. If you renew your CD after it matures, you’ll earn the new rate available in six months.
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 6-month, 1-year, or 5-year CD?
CDs with 1-year and 5-year terms pay higher rates than ones with 6-month terms. You may prefer longer terms than six months to earn better interest rates.
Ultimately, your choice will likely depend on how soon you plan to need the money. For example, if you want the money to buy a house in less than a year, a longer term isn’t the best idea.
Going for a shorter term also gives you the opportunity to snag a better APY if rates are up in a year. With a 1-year or 5-year CD, you could miss out on higher rates. But on the other hand, you could avoid lower rates with a 1-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 6-month, 1-year, and 5-year CDs at the same time, which means you’ll get some of your money back in six months, then more in a year, then more in five years.
Which is better, a 6-month CD or a high-yield savings account?
The choice between a 6-month CD and high-yield savings account will depend on several factors.
First, many institutions pay higher rates on high-yield savings accounts than on 6-month CDs. This isn’t always the case, though, so be sure to double-check.
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 6-month 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 you’ll have to pay a fee if you need access to money from your 6-month CD before it matures. You can also continuously add money to your savings account, whereas most CDs block you from making additional deposits after opening the account.
Which is better, a 6-month 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 or down over a 6-month 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 6-month 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 six months and want a guaranteed rate of return, a 6-month 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 a sort of combo savings/investment account. It’s a safe investment tool that may be a worthwhile option for people who are close to retirement age.