A certificate of deposit (CD) is a good place to store money you don't need access to immediately. But the key to growing your money is finding a healthy annual percentage yield.
While the average rate for a 12-month CD is 1.71%, according to FDIC data, some banks are touting APYs of 4.00% to 4.30%. The highest return we've found on the market is from Financial Partners Credit Union (FPCU), which is offering a 6.00% APY on its eight-month CD.
However, the CD isn't offered to everyone, and there are restrictions on how much you can deposit.
Here's what to know about Financial Partners' 6.00% APY CD and other top options for savers looking to maximize their return.
Who is eligible for Financial Partners Credit Union's 6.00% APY CD?
Founded in 1937, FPCU is a California-based credit union with more than 93,000 members and $2.2 billion in assets. Membership is limited to people who live, work or attend school in Los Angeles, Orange, Riverside or San Diego County or in the cities of South San Francisco or Alameda, California. Current or retired employees of eligible companies can also open accounts.
To activate your membership, you need to deposit at least $25 in a FPCU savings account.
FPCU's eight-month CD has a $1,000 minimum deposit and a $5,000 maximum. If you deposit $5,000 for eight months, you'll earn close to $200 in interest, giving you $5,200 at maturity.
Minimum deposit: $1,000
Maximum deposit: $5,000
Early withdrawal penalty: 90 days of interest
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
From 3.80% to 4.50% APY
From 6 months to 5 years
Bread Savings™ (formerly Comenity Direct) is a product of Comenity Capital Bank, a Member FDIC.
From 3.90% to 4.35% APY
From 6 months to 6 years
Marcus by Goldman Sachs® is a brand of Goldman Sachs Bank USA, a Member FDIC.
Other top CD rates
If you don't qualify for Financial Partners Credit Union, there are other notable returns on CDs with similar terms.
California Coast Credit Union offers a 5.00% APY on a five-month CD, with a $500 minimum deposit and a maximum of $5,000. But membership to CCCU is limited to residents of San Diego, Riverside, Imperial, Orange, Los Angeles, Ventura and San Bernardino counties.
California Coast Credit Union CDs
Annual Percentage Yield (APY)
0.10% to 5.00% APY
Terms
3 months to 5 years
Minimum deposit
$500 or $1,000
Monthly fee
None
Early withdrawal penalty fee
For terms 6 to 24 months, the early withdrawal penalty is equal to 180 days of interest on the amount withdrawn. For terms greater than 24 months, the penalty is equal to 365 days of interest on the amount withdrawn.
Terms apply.
Pros
- Above-average APYs
- Range of CD terms
- No monthly fee
Cons
- To join CCCU, you must live, work, worship or study in one of seven qualifying Southern California counties, pay a one-time $5 fee and open a deposit account.
- Only has branch locations in California.
Nuvision Credit Union offers a 5.00% APY on a four-month term. Nuvision also extends membership to residents of Southern California, but non-residents can join by joining the nonprofit American Consumer Council for free. You do need to open a savings account with a $5 opening deposit.
Nuvision Credit Union Certificate Accounts
Annual Percentage Yield (APY)
2.55% to 5.00% APY
Terms
From 3 months to 5 years
Minimum deposit
$1,000
Early withdrawal penalty
Up to 90 days' interest on CDs with terms of three to 12 months. Up to 180 days' interest on terms greater than 12 months but less than 36 months. Up to 365 days' interest on terms of 36 months or longer:
Terms apply.
Pros
- Highly competitive promotional rates on short-term CDs
- Membership only requires joining the American Consumer Council and making a $5 savings account deposit.
Cons
- Promotional short-term CDs capped at $5,000
- Only has branches in California, Alaska, Arizona, Washington and Wyoming
If you don't want to go through the hoops of joining a credit union, American Express is offering 4.25% for a 10-month term CD, with no minimum requirement. In addition, Bread Savings has a 4.25% APY on a one-year CD with only a $1,500 deposit required.
Bread Savings™ CDs
Annual Percentage Yield (APY)
From 3.80% to 4.35% APY
Terms
6 months to 5 years
Minimum deposit
$1,500
Early withdrawal penalty
For terms of less than 12 months, the penalty is 90 days of simple interest. For terms of 12 months to three years, the penalty is 180 days of simple interest. For terms of four years or longer, the penalty is 365 days of simple interest.
Terms apply.
Pros
- Above-average APYs
- Wide range of terms
Cons
- $1,500 minimum deposit
- Doesn't offer no-penalty or bump-up CDs
- No physical branches
American Express CDs
Annual Percentage Yield (APY)
2.25% to 4.25% APY
Terms
From 10 months to 5 years
Minimum deposit
None
Early withdrawal penalty
For CDs with terms less than 12 months, the penalty is 90 days' interest on the withdrawn amount. For terms between 12 and 48 months, it's 270 days' interest. For terms between 48 and 60 months, it's 365 days' interest. For terms of 60 months or more, the penalty is 540 days' interest.
Terms apply.
Pros
- Above-average APYs
- No minimum deposit
- Wide range of CD terms
Cons
- Penalty for early withdrawal is severe
- No physical branches
What is a CD?
A CD, or certificate of deposit, is a savings account that pays a fixed interest rate for a set period, usually between three months and five years. In return for a guaranteed return, you agree to leave your money untouched until the CD matures. (Withdrawing funds before maturity typically means paying an early withdrawal penalty.)
When the CD matures, you can roll the money over into a new CD or take the funds and close the account. If you do nothing, most banks will auto-renew your CD at the rate offered at maturity.
How to choose a CD
To pick the right CD, start by looking for banks that a term you're comfortable with. From there, consider:
- APY: Shop banks, credit unions and online institutions to find the best interest rate.
- Minimum and maximum deposit: Minimum deposits can range from $100 to $10,000, with jumbo CDs requiring as much as $100,000 or more. There may also be a cap on earning an advertised APY.
- Early withdrawal penalty: See what the fee is if you take your money out early. It might be worth a slightly lower APY if you have more flexibility.
- Compounding interest: See whether interest compounds daily or monthly.
- FDIC or NCUA insurance: Only open an account at a bank or credit union with deposits that are federally insured up to at least $250,000 per depositor, per ownership category.
CD pros and cons
Pros
- A fixed interest rate means predictable earnings
- An early withdrawal penalty discourages spending money meant for savings.
Cons
- CDs have limited liquidity.
- There may be a minimum deposit requirement.
- CDs have lower returns than stocks and other investments.
- The value of your CD could decline if your APY slips below the rate of inflation.
FAQs
How much will $5,000 in an eight-month CD earn?
The amount of interest you'll earn on a $5,000 six-month CD depends on the APY when you open the account. With a 6.00% APY, a $5,000 deposit would earn about $200 in interest over eight months.
Which is better, an eight-month CD or a high-yield savings account?
Whether a CD or HYSA is better depends on your goals and risk tolerance. An eight-month CD offers a fixed rate and guaranteed returns, while an HYSA provides easier access to your money.
Can I withdraw my money early from Financial Partners Credit Union's eight-month CD?
Taking your money out before a CD matures typically results in an early withdrawal penalty. Financial Partners Credit Union's penalty is equal to 90 days of interest. If you deposited the $5,000 limit and withdrew your funds after four months, you would have earned about $100 in interest, but the penalty would be about $75. As a result, you'd only have earned about $25. If you withdrew the funds after two months, you would have only earned about $50 in interest. The remaining $25 would be taken from your principal.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every banking article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of savings products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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