Our pick for 5-year CDs: CIT Bank Term CDs
- No maintenance fees
- $1,000 minimum to open
- Daily compounding interest
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The best 5 year CD rates typically offer a higher APY in exchange for keeping your money locked away for a longer term. To find the best five year CDs, we researched options at over 75 financial institutions and selected those with the highest rates. Then, we filtered through those results by choosing the top 14 with national availability and low minimum deposit requirements.
What’s changed in 2021?
Early last year we saw 5-year CD rates as high as 3%. But they’ve dropped quite a bit due to the coronavirus pandemic. Due to these drops, our best list has changed and we added Axos Bank’s five year CD.
Use the table below to compare each account by APY, minimum opening deposits and CD features. Want to compare multiple accounts at once? Click “Compare” on your top picks to explore features side-by-side.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Five-year certificates of deposit, or CDs, offer the security of a fixed interest rate and provide guaranteed returns on your investment. Also referred to as 60-month or long-term CDs, these accounts offer protection against any interest rate cuts that may occur.
Unlike a savings account, CDs are set up so that it is impossible to access the funds in your account without incurring high fees. This removes the temptation to dip into your savings on a whim, instead providing an incentive for you to invest your money for the full five-year term.
With a certificate of deposit, you invest your money for a set period — in this case five years — and earn a fixed interest rate during that time. Interest can be paid monthly, quarterly, half-yearly, yearly or when the deposit matures. The interest rate is guaranteed not to change for the life of the deposit.
The interest rate on a CD remains the same until your account matures, which means you are protected against interest rate falls but you can’t take advantage of any rises that may occur. So if you think interest rates are unlikely to increase at any time in the next five years, investing in a five-year CD could be a good idea. Once the deposit matures at the end of the five-year period, you can either withdraw your funds or roll them over into a new CD.
Even a seemingly small difference in interest rates can make a large difference to what you earn — especially if you’re investing for five years. Take a look at the following fictional example:
Steve wants to invest $10,000 in a five-year CD. When he compares the accounts available from two banks, Steve discovers a slight difference in the interest rates — Bank A offers 2.75% APY while Bank B offers 3.25% APY. Both accounts pay interest monthly, so Steve compares the accounts to see just how much difference a higher rate will make to his end balance.
|Bank A||Bank B|
|Interest rate||2.75% APY||3.25% APY|
|Investment term||5 years||5 years|
|Balance after 5 years||$11,472.21||$11,761.90|
As you can see, even though the interest rate from Bank B is only 0.50% higher, this works out to be a difference of $289.69 at the end of the investment term.
A five-year certificate of deposit provides a safe and reliable long-term investment option if you know you can wait to access your money for five years. If you need your investment to double as an emergency fund, a high-interest savings account might be a better fit.
Can you add money to a CD?
No. You can only deposit money when you first open the account — you can’t add to it once the account is open.
How can I figure out how much I’ll earn?
You can use our CD calculator to see how much your savings will grow.
Should I get a CD or a savings account?
That depends on what you’re looking for. If you need access to your money in an emergency and/or you want to add to it gradually, a savings account is your best option. If you can keep your hands off your funds for a set period, a CD will earn you the highest interest rate.
If you can’t decide, you can always open one of each.
HMBradley is a hybrid checking and savings account that earns up to 3.0% APY.
Compare the five best bank accounts for self-employed professionals and freelancers.
Unifimoney lets you spend, save and invest, but it’s only free for high-income individuals.
Reduce your carbon emissions and enjoy no monthly fees with this ethical checking account.
Access your cash from any network ATM and earn cashback on your debit card purchases from approved retailers.
The free Upgrade Rewards Checking account offers 2% cashback, but you can’t deposit checks.
CIT’s eChecking account offers more interest than most physical banks, but it can’t compete online.
A digital bank built for Asian-Americans. Earns up to 10% cash back and up to 3% APY.
The Bank5 Connect High Interest Checking account has a solid APY, but you’ll need to meet the minimum balance to earn interest.
BankPurely plants a tree for every new account.
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