The best CD rate available nationwide from a bank is 4.25% APY, a mark shared by more than one institution as of June 16, 2026. Certificates of deposit remain one of the few places savers can lock in a fixed return well above the national average, sometimes three to five times higher.
At a Glance
- OMB Bank leads short term CDs with a 4.25% APY on a 5 month term and a minimum deposit of $1,000.
- TAB Bank and Merrick Bank tie for the top 5 year rate at 4.20% APY.
- The Federal Reserve held its benchmark rate steady at 3.50% to 3.75% at its April 29 meeting, the third straight meeting without a change.
- CD rates typically move with the federal funds rate, so further Fed cuts later this year could push CD yields lower.
- Early withdrawal penalties vary widely, from one month of interest to as much as 18 months, depending on the bank and term.
Where the Top Rates Stand Right Now
Rates shift often enough that timing matters. Among the standouts: OMB Bank pays 4.25% APY on a 5 month CD with a $1,000 minimum, while First National Bank of America also offers 4.25% APY but on a 120 month (10 year) term with an 18 month interest penalty for early withdrawal, a steep trade off for that headline rate. Popular Direct pays 4.20% APY on an 18 month CD, though it requires a $10,000 minimum and carries a 9 month interest penalty. Merrick Bank matches that 4.20% APY across four different terms (24, 36, 48, and 60 months) with a $25,000 minimum, and TAB Bank offers the same 4.20% APY on a 5 year CD with just a $1,000 minimum and a lighter 6 month penalty.
Comparing the Leading CD Options by Term
| Institution | APY | Term | Minimum Deposit | Early Withdrawal Penalty |
|---|---|---|---|---|
| OMB Bank | 4.25% | 5 months | $1,000 | 2½ months of interest |
| First National Bank of America | 4.25% | 120 months | $1,000 | 18 months of interest |
| Popular Direct | 4.20% | 18 months | $10,000 | 9 months of interest |
| Merrick Bank | 4.20% | 24, 36, 48, or 60 months | $25,000 | 6 to 9 months of interest, depending on term |
| TAB Bank | 4.20% | 60 months | $1,000 | 6 months of interest |
| Climate First Bank | 4.18% | 8 months | $500 | None |
| T Bank | 4.16% | 6 or 12 months | $1,000 | 1 month of interest |
| BTG Pactual | 4.16% | 24 months | $500 | All interest (3 months minimum) |
| LendingClub | 4.15% | 11 months | $500 | All earned interest on amount withdrawn |
| Bread Savings | 4.15% | 9 months | $1,500 | 3 months of interest |
To make our comparison, institutions had to be FDIC insured and offer a minimum opening deposit of $25,000 or less. Where rates tied, shorter terms and smaller minimums ranked higher, with alphabetical order as the final tiebreaker.
What Exactly a CD Is and How It Works
A certificate of deposit sits alongside savings, money market, and checking accounts as a deposit product, but it works differently. Rather than adding or pulling money out whenever you like, you generally make one lump sum deposit and agree not to touch it for a set stretch of time called the CD term. In exchange, the bank locks in your interest rate for that entire period, regardless of what happens in the broader rate environment.
Quick Facts
- CDs are FDIC insured up to $250,000 per depositor, per bank, making them essentially risk free.
- Interest earned on a CD counts as taxable ordinary income, and banks issue a Form 1099-INT once interest reaches $10 or more.
- Terms typically range from 3 months to 10 years, though some banks offer even shorter or longer windows.
- A recent Investopedia reader survey found 10% would put an extra $10,000 into CDs, trailing individual stocks, ETFs, and money market funds but ahead of high-yield savings and paying down debt.
Weighing the Trade Offs Before You Lock In
CDs offer a fixed, guaranteed yield and tend to pay more than liquid savings or money market accounts, which makes them appealing when rates are elevated. They also work as a built in deterrent against impulse spending, since pulling money out early costs you. But that same rigidity is the catch: withdraw before maturity and you'll face a penalty, often measured in months of forfeited interest. If rates climb after you've locked in, you're stuck with the lower yield until the term ends. And compared with stocks over long stretches, CDs simply won't keep pace, though they also won't lose principal.
Other Places to Park Cash
High-yield savings and money market accounts trade the fixed rate for flexibility, letting you deposit and withdraw at will, though their yields can drop the moment the Fed cuts rates. Treasury notes behave much like CDs, backed by the federal government with a predictable rate if held to maturity. I bonds adjust their rate twice a year based on inflation and carry a milder three month interest penalty, but you can't cash one in during its first 12 months under any circumstance. Bond funds can outperform a fixed CD rate but carry the risk of a down year, making them a tougher sell for short holding periods. Equities offer the highest potential return over years, but with real risk of loss, something a CD simply doesn't carry.
Opening an Account and Deciding If It Fits Your Plans
Opening a CD resembles opening any other bank account. You'll fill out an application, often online, though some banks still allow in-branch or mailed paper applications. New customers need photo identification, and everyone signs off on the account's written terms. Funding usually comes from a transfer, a mailed check, or mobile deposit, and since you generally only get one shot at funding the account, it pays to decide on your amount up front. Once it's open, mark a reminder a month or two before maturity so you're not caught off guard when the bank asks for instructions.
CDs make the most sense for money you won't need for a few years but also don't want exposed to market swings, think a home down payment planned three to five years out. They're a poor fit for retirement savings decades away, where stocks have historically returned around 10% annually (6% to 7% after inflation), and an even worse fit for emergency funds, where you might need cash on short notice.
Picking the Right CD for Your Situation
Shopping for a CD means weighing more than just the advertised APY. Terms can run from 3 months to 10 years, and locking in a longer term protects you if rates fall later. Penalties differ sharply by bank, some charge 30 days of interest on a short CD, others charge a full year's interest on a two year CD, so reading the fine print matters. Minimum deposits range from as little as $5 to $5,000 or more. And a smaller subset of CDs carry call features, letting the bank end the CD early if rates drop, a right that doesn't flow the other way to the depositor.
Beyond the standard CD, banks offer variations worth knowing: add-on CDs that accept extra deposits during the term, jumbo CDs aimed at deposits of $100,000 or more, no-penalty CDs that sacrifice yield for flexibility, variable-rate CDs whose returns shift with the economy, and brokered CDs sold through investment firms that can offer higher rates but come with added risk.
What Happens to These Rates if the Fed Cuts Again
The Federal Reserve held its key rate at 3.50% to 3.75% at its April 29 meeting, the third consecutive meeting without a move following six rate cuts since September 2024. Because CD rates tend to track the federal funds rate closely, any cut later this year would likely pull today's top yields lower, which is the main argument for locking in a longer term now rather than waiting to see what happens next.
