Best CD Rates Compared: Every Term From 3 Months to 5 Years

As of April 2026, the best short-term rate is 4.50% APY on 3-month and 6-month CDs from Bread Financial and BMO Alto. For 1-year CDs, the top rate is 4.40% from Bread Financial. Longer terms offer lower rates: 4.10% for 2-year and 3.80% for 5-year CDs. Rates have been declining as the Federal Reserve cuts the federal funds rate.

CD rates are trending down. The Federal Reserve has cut the federal funds rate to 3.50%-3.75% and markets expect further reductions through the rest of 2026. Short-term CD rates are about 0.25%-0.50% lower than their peak in mid-2024. Locking in a CD now preserves today's rate even as future cuts push rates lower.

Yes. CDs at FDIC-insured banks are protected up to $250,000 per depositor, per bank. This means your principal and earned interest are guaranteed even if the bank fails. For deposits exceeding $250,000, spread across multiple banks for full coverage or use brokered CDs through Fidelity or Schwab which automatically diversify across issuing banks.

Yes. CD interest is taxed as ordinary income in the year it is earned, even if the CD has not matured and you have not withdrawn the interest. Your bank sends a 1099-INT form each year. For CDs held in tax-advantaged accounts like Traditional or Roth IRAs, the tax treatment depends on the account type: Traditional IRA CDs are tax-deferred, while Roth IRA CDs grow tax-free.

A CD ladder splits your deposit across multiple terms, for example 1-year, 2-year, and 3-year CDs. As each CD matures, you reinvest at the current rate or use the funds. This balances rate-locking with liquidity. Laddering is ideal when you want to lock in today's rates but also want access to some money at regular intervals.

Bank CDs are opened directly with a bank like Ally or Discover. Brokered CDs are purchased through a brokerage like Fidelity, Schwab, or Vanguard from various issuing banks. Brokered CDs are tradeable on the secondary market and can automatically spread FDIC coverage across multiple banks. However, they typically pay simple interest rather than compound interest.

Many online banks like Ally, BMO Alto, Synchrony, and Capital One require no minimum deposit. Others require $500 (Marcus), $1,000 (CIT Bank), $1,500 (Bread Financial), or $2,500 (Discover). Jumbo CDs typically require $100,000 or more.

Opening a CD takes 10-15 minutes online. Choose a bank, select your term and deposit amount, fund from an existing bank account via ACH transfer, and your CD begins earning interest once funded. Most banks allow you to open CDs entirely online with no branch visit required.