Five-year CDs can be an excellent investment option. Today’s competition among banks and credit unions has driven interest rates up, making it lucrative to open a CD account right now.
Most 5-year CDs offer higher rates than traditional online savings accounts and some high-yield savings accounts.
We’ve reviewed the best 5-year CD rates from banks and credit unions nationwide.
CD rates vary depending on several factors, including:
- Term
- Current interest rates
- Deposit amount
- Your financial institution
Typically, credit unions and online banks are a great start if you’re looking for the highest-paying CD rates. Below is an up-to-date list of today’s best 5-year CDs, plus our current recommendations.
Best 5-Year CD Rates Today
Here are the best 5 Year CD rates on offer right now:
| Bank | Term | APY | Min Deposit |
|---|---|---|---|
| First Internet Bank | 60 Mo | 4.55% APY | $1,000 |
| BMO | 59 Mo | 4.50% APY | $5,000 |
| Fidelity Investments | 60 Mo | 4.30% APY | $1,000 |
| Quontic Bank | 60 Mo | 4.30% APY | $500 |
| America First Credit Union | 60 Mo | 4.20% APY | $500 |
| Bread Financial | 60 Mo | 4.15% APY | $1,500 |
| CFG Community Bank | 60 Mo | 4.05% APY | $500 |
| Sallie Mae Bank | 60 Mo | 4.00% APY | $2,500 |
| EverBank | 60 Mo | 4.00% APY | $1,000 |
| LendingClub Bank | 60 Mo | 4.00% APY | $2,500 |
Top Banks & Credit Unions for 5-Year CDs
If you are shopping for a 5-year CD, these top financial institutions frequently have some of the highest CD rates on offer:
- Quontic: 4.30% APY
- Discover® Bank: 3.75% APY
- Ally Bank: 3.90% APY
- Bread Financial: 4.15% APY
- First Internet Bank: 4.59% APY
- Barclays: 3.75% APY
- BMO Alto: 4.50% APY
- The State Exchange Bank: 4.35% APY
1. Quontic
- APY: 4.30% APY
- Term: 5 Year
- Minimum Deposit: $500
With a $500 minimum deposit requirement, Quontic’s 5-year CD offers a solid APY.
Quontic CDs are also available in 6-month, 1-year, 2-year, or 3-year terms, but the longer 5-year CD term earns the highest APY.
The account has no monthly service fee, and interest rates are locked in for the full five-year term.
You can transfer funds into your account from a Quontic account or use Plaid or ACH to transfer funds from an external account.
Learn More:
2. Discover® Bank
- APY: 3.75% APY
- Term: 5 Year
- Minimum Deposit: $2,500
While Discover® Bank, member FDIC, is best known for credit cards, it also serves as an online bank with a range of financial products that include CDs.
Discover® CDs start at 3 months. The longest term available is for 10 years or 120 months, but the 5-year CD offers the highest yield.
The account has no fees, but if you need to withdraw your money before the term expires, you’ll have to pay a penalty.
You can easily apply online. Once you fund your account with a qualifying minimum deposit, interest will start compounding daily.
The bank also gives you the option to set up a CD ladder where you open multiple CDs with different term lengths. This can help you better manage liquidity and interest rate risks.
Learn More:
3. Ally Bank
- APY: 3.90% APY
- Term: 5 Year
- Minimum Deposit: $0
Ally Bank is an online bank with a variety of products and services, including CDs. The bank has been operating since 2009 and has over 11 million customers.
Ally Bank compounds interest daily so you make the highest return possible on your deposits. If you renew your CD, you also get a bonus APY, which is an additional percentage on top of the promoted interest rate.
High Yield Certificate of Deposit terms range from 3 months to 5 years. Unlike some of the other banks featured, Ally doesn’t have a minimum deposit requirement.
Learn More:
4. Bread Financial
- APY: 4.15% APY
- Term: 5 Year
- Minimum Deposit: $1,500
Bread Financial, formerly Comenity Direct, offers CD accounts that can be opened easily online. There’s a $1,500 minimum opening balance with terms ranging from one to five years.
Interest is compounded daily and gets paid out once a month. There are no monthly fees, but there is an early withdrawal penalty, which is typical across all banks and credit unions.
Once the CD reaches maturity, it will auto-renew. That means you can withdraw without incurring fees once the term is up, but you’ll need to act fast. The grace period is only 10 days.
Learn More:
5. First Internet Bank
- APY: 4.59%
- Term: 5 Year
- Minimum Deposit: $1,000
First Internet Bank is a fully online bank that’s been in business since 1999. It offers several deposit accounts, cards, investment accounts, and loans.
The bank’s 5-year CD is one of its most competitive products. The account has a $1,000 minimum deposit.APY is fixed, and the account compounds interest daily. The penalty for withdrawing your account funds early is 360 days of interest.
While the bank doesn’t issue CD statements, you can easily find info on your account and earnings on the bank’s user-friendly app or online banking platform.
Learn More:
6. The State Exchange Bank
- APY: 4.35%
- Term: 5 Year
- Minimum deposit: $1
The State Exchange Bank is an Oklahoma-based, FDIC-insured institution headquartered in Oklahoma.
The community bank partners with Raisin, an online banking platform, to offer competitive high-yield accounts nationwide.
One of those accounts is its 5-year CD, which comes with a solid APY and a low minimum deposit requirement of $1.
While the account is offered by and held with the State Exchange Bank, you can access your account, make transfers, and check out your earnings on the Raisin app and website.
7. Barclays
- APY: 3.75% APY
- Term: 5 Year
- Minimum Deposit: $0
Barclays is a global bank headquartered in England. It offers a wealth of credit cards, personal loans, savings accounts, and CDs to US customers.
That includes a competitive 60-month CD. While Barclays’ 12-month CD earns the highest APY, the 5-year CD still offers an impressive APY.
And there are no account fees or minimum deposit requirements to worry about.
You can use Barclays’ online calculator to quickly compare rates for different CD terms and amounts. While rates are subject to change at any time before you open an account, they’re locked in once you do.
Learn More:
8. BMO Alto
- APY: 4.50% APY
- Term: 5 Year
- Minimum Deposit: $0
BMO Alto is the online arm of BMO Harris that provides access to high-yield savings and CD accounts.
You can lock in CDs ranging from six months to sixty and easily compare rates online.
While you’re required to fund your account within 10 days of opening it, there are no set minimum deposit requirements, so you can start earning interest on the first dollar you deposit.
BMO Alto CDs are FDIC-insured. Though you can’t go into a local branch for support with BMO Alto accounts, the bank offers personalized phone support for its online account holders.
The BMO Harris app is one of the most highly-rated banking apps on the App Store and Google Play Store.
Learn More:
How Do 5-Year CD Rates Work?
Interest rates vary by bank or credit union, by term length, and by type of CD. The longer the term length, the higher the interest you will earn.
While some banks offer a flat rate that’s the same across all terms, most have a tiered system. This means that a long-term CD will typically enjoy a higher interest rate than a short-term CD.
A 5-year CD will also earn you more money compared to shorter terms, due to the compounding effect of APY.
Keep in mind that many CDs also have a minimum deposit requirement to get the highest rates.
Pros & Cons of 5-Year CDs
Five-year CDs are a great savings vehicle that can help you safely reach your financial goals, but they aren’t without their drawbacks. Here are a few of the biggest pros and cons to consider:
Pros
- Higher interest rates: Compared to traditional savings accounts, CDs provide a higher return on your deposit. They’re a great fit if you have specific financial goals like saving for a down payment or planning for retirement.
- Low-risk investment: 5-year CD accounts are low-risk investments. That means you’re unlikely to lose money if you choose to invest in them. If you’re risk-averse and looking for a safe place to grow your savings, a CD is a good spot to park your funds.
- Fixed term: With a fixed term, you can align your savings goals with a timeline and have a sense of certainty about when you can access your funds.
Cons
- Limited accessibility: One of the drawbacks of 5-year CD accounts is the limited accessibility to your money. CDs typically have a lock-in period, which means you can’t withdraw your funds until they reach maturity without paying a penalty.
- Lower interest rates compared to alternatives: While 5-year CD accounts offer higher interest rates than regular savings accounts, they still tend to have lower rates compared to other investment options, such as fixed annuities. And there are several 5% interest savings accounts out there.
- Tax implications: The interest earned from 5-year CD accounts is subject to taxation. It’s important to consider the tax implications when evaluating the potential benefits of a CD account.
- Potential inflation impact: CD rates can’t always keep up with inflation. Over time, the purchasing power of your money may decrease. Just be aware of the potential impact of inflation on the long-term value of your CDs.
Frequently Asked Questions
How does a 5-year CD work?
When you open a 5-year CD, you agree to put your funds into a bank or credit union’s account for five years, earning a guaranteed interest rate on your funds. Interest is typically compounded daily and paid out monthly. If you withdraw your funds early, you may be subject to a penalty and lose out on interest.
Who has the highest-paying 5-year CD right now?
Credit unions and online banks offer the highest paying 5-year CD rates right now.
It’s important to regularly compare interest rates as they change frequently. Our list of 5-year CD rates stays up to date to give you an idea of what’s currently available.
What are some alternatives to a 5-year CD?
If five years sounds like a long time, shorter-term CD options like a six-month or a one-year CD may be a better alternative for those who want access to their money sooner. High-yield savings accounts also offer you the ability to grow your savings at higher interest rates.
Does a 5-year CD have a high interest rate?
Typically, 5-year CDs pay a higher interest rate than shorter-term CDs or traditional savings accounts. While they provide less liquidity, they’re a worthwhile investment if you’re looking for a low–risk way to save for longer-term savings goals.
Are CDs worth it right now?
CDs offer solid returns with minimal risk. If you have a set savings goal with a clear timeline, a CD can be worth opening right now. It’s an easy way to diversify your investments, enjoy compounding interest, and earn a guaranteed return.
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