Compare the best 5-year CD rates

CDs combine high-interest rates with the security of knowing exactly how much you’ll earn. Five-year CD’s are worth considering if you want to keep your funds safe — as long as you’re sure you won’t need your money before the term is up. We’ve researched over 75 five-year cd rates to bring you the 14 best highest rates available today.

Compare the 14 best 5-year CD rates

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.

How did we choose the best 5-year CDs?

Five-year CDs are a safe way to lock away your money for a few years, earning more interest than a standard savings account in the process. For our research, we looked at five-year CDs from 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 2020?

Early 2019 saw rates for 5-year CDs as high as 3%. But they’ve dropped quite a bit in 2020 due to the coronavirus pandemic. Due to these drops, our best list has changed. We also had several regional accounts on our list, but we replaced those with nationwide options.

Other 5-year CD options

Looking for a credit union with high 5-year CD rates? These accounts have noteworthy APYs but didn’t make our list due to membership requirements. Depending on your financial situation, these runner-ups may be just what you’re looking for.

Hiway Federal Credit Union CD

APY: 0.3% to 1.6%

Required minimum deposit: $500

Pros

• Tiered APYs. Earn 0.9% APY on balances up to $9,999, 1% APY on balances up to $24,999 and 1.1% on balances over $25,000.
• Accessible interest. Withdraw your CD’s interest at any time without penalty.
• $500 minimum deposit. Most 5-year CD’s require higher minimum deposits.

Cons

• Early withdrawal penalty. You’ll pay a fee equal to 365 days’ interest if you withdraw your money before the five-year mark.
• Membership requirements. Hiway primarily serves those who live, work, worship or attend school in select areas of Minnesota. But anyone can become a member when they join the Association of the US Army.

Pen Air Federal Credit Union CD

APY: 2.20%

Required minimum deposit: $500

Pros

• Solid APY. You don’t have to meet certain requirements to earn 2.20% APY on your total account balance.
• Penalty-free interest withdrawals. While you can’t touch your principal balance for five years, you can withdraw your interest at any time for free.
• Membership discounts. Pen Air members get access to special discounts for TurboTax, Sprint, TruStage Auto Insurance and more.

Cons

• Limited customer service. The only way to reach customer service is by phone, US mail or by visiting a local branch.
• Early withdrawal penalty. Expect to pay a penalty equal to 180 days of interest if you need to access your funds early.
• Membership requirements. Pen Air is primarily open to active duty, civil service employees and retired military and their families. But anyone can become a member when they join the Friends of the Navy Marine Corps Relief Society.

State Department Federal Credit Union CD

APY: 1.76%

Required minimum deposit: $500

Pros

• No service fees. You won’t pay anything to open or maintain this account.
• Relatively low deposit. $500 is quite low considering some institutions have required minimum deposits of $10,000 or more.

Cons

• High early withdrawal penalty. You’ll lose 360 days of interest if you need to access your money before it matures.
• Members only. As with all credit unions, you must be an existing member to open this account. If you fall outside its regular field of membership, you join when you become an American Consumer Council member, which has a $15 one-time fee.

Read up on how to compare long-term vs. short-term CD rates

How do I compare the best 5-year CDs?

Make sure to keep the following features in mind when comparing CDs:

• Interest rate. Even a small difference in interest rates can make a substantial difference to your balance at the end of a five-year investment term, so be sure to compare all your options.

• Frequency of interest payments. Check to see when your account will pay interest — monthly, quarterly, half-yearly, annually or at maturity — and what effect this will have on your balance at the end of five years.

• Fees. There are many CDs that charge nothing in ongoing fees, so don’t agree to pay any unless the interest rate is high enough to make it worthwhile.

• Renewal bonuses. Some banks provide an interest rate increase if you decide to roll over your balance into another one when your CD matures.

• Linked account requirements. Some banks will also require you to open a linked account from which you can transfer funds to your CD. If this is the case, make sure you’re aware of any fees that apply to this account.

• Minimum balance requirements. Look for an account with a minimum deposit you can afford.
• What happens when the deposit matures. Some banks will automatically roll your funds over into a new CD when your account matures. Make sure you’re aware of what will happen to your funds at the end of the investment term so that you can take control of your finances.

How do 5-year certificates of deposit work?

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.

How does interest work on a 5-year CD?

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.

What are the pros and cons of 5-year CDs?

The pros

• High, fixed-rate APYs. You’ll earn more interest in your money with a 5-year CD. Plus, your rate is locked in for the life of your CD, so it won’t change if your bank lowers its rates.

• Guaranteed returns. When you invest your money in a CD, you know exactly how much interest you’ll earn.

• Spending control. With a long-term CD, your money will be locked away to help you curb impulse purchasing.

The cons

• Rates won’t rise. If rates go up while your funds are locked away in a CD, you won’t be able to invest your funds at a higher rate until your deposit matures.
• Money locked away. Unless you have a no-penalty CD, it’s difficult to access your money while it’s invested in a CD. You’ll have to wait for five years before you’re able to withdraw. It can be challenging if an emergency pops up.
• Penalty fees. If you need access to your money earlier than expected, you’ll have to pay a penalty fee — and at some banks, you could end up walking away with less than you started with.

Why is it important to find the best rate?

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 chooses a CD

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
Interest paid	Monthly	Monthly
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.

Bottom line

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.

Frequently asked questions

• 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.