Independent comparison. Not affiliated with any bank listed.
Best CD Rates From 3 Months to 5 Years (Plus Whether to Lock In Now)
Updated 30 March 2026
Top CD rates range from 4.00% to 4.50% depending on term and bank. With the Fed cutting rates, longer-term CDs may preserve today's yields for years to come. Here is the full comparison with strategy guidance.
4.50%
Best 6-month
4.25%
Best 1-year
3.70%
Best 5-year
Current Best CD Rates by Term
| Term | Best APY | Top banks | Minimum |
|---|---|---|---|
| 3-month | 4.40% | Marcus, Ally, Discover | $500 to $0 |
| 6-month | 4.50% | Bread Financial, BMO Alto, CIT Bank | $0 to $1,000 |
| 1-year | 4.25% | Discover, Capital One, Ally | $0 to $2,500 |
| 18-month | 4.10% | BMO Alto, Bread Financial, Barclays | $0 to $1,000 |
| 2-year | 4.00% | Marcus, Synchrony, Bread Financial | $0 to $2,500 |
| 3-year | 3.75% | Synchrony, Ally, Discover | $0 to $2,500 |
| 5-year | 3.70% | Synchrony, Ally, Marcus | $0 to $2,500 |
The Rate Environment: Why Timing Matters
The Federal Reserve has been cutting rates since late 2025. Current federal funds rate: 4.00% to 4.25%. Market expectations: another 50 to 100 basis points of cuts through 2026. This means high-yield savings accounts will continue to see their rates decline throughout the year.
CDs lock in today's rate for the full term. A 2-year CD opened today at 4.00% will still earn 4.00% even if HYSA rates drop to 3.00% by next year. This rate-lock is the primary advantage of CDs in a declining rate environment.
Recommendation for most savers: consider a CD ladder with deposits split across 6-month, 1-year, and 2-year terms. This balances rate-locking with regular access to some of your money.
CD vs High-Yield Savings: When Each Wins
Choose a CD when:
- You have money with a known timeline (tax bill, down payment, tuition)
- You want to guarantee today's rate against future cuts
- You will not need the money before maturity
- You are building a laddering strategy for staggered maturities
Choose a HYSA when:
- You need access to funds at any time (emergency fund)
- You are saving for an uncertain timeline
- Current HYSA rates match or exceed short-term CD rates
- You want zero commitment and full flexibility
No-Penalty CDs: The Best of Both Worlds
No-penalty CDs let you withdraw your full balance plus earned interest before maturity with no penalty. Rates are typically 0.10% to 0.25% lower than standard CDs, but you get CD-level rate-locking with HYSA-level liquidity. For risk-averse savers, this is an underrated option.
Discover
No-penalty CD available on 7-month and longer terms. Withdraw any time after the first 6 days.
Ally
No-penalty CD for 11-month term. Withdraw full balance any time after 6 days of funding.
Marcus (Goldman Sachs)
No-penalty CD for 7, 11, and 13-month terms. Full withdrawal after 14 days.
Early Withdrawal Penalties by Bank
| Bank | Under 1-year CD | 1-year CD | 5-year CD |
|---|---|---|---|
| Ally | 60 days interest | 60 days interest | 150 days interest |
| Discover | 3 months interest | 6 months interest | 18 months interest |
| Marcus | 90 days interest | 270 days interest | 365 days interest |
| Capital One | 3 months interest | 6 months interest | 12 months interest |
| Synchrony | 90 days interest | 180 days interest | 365 days interest |
Ally has the lowest penalties. Discover and Marcus have the highest. Always check penalties before opening a CD, especially for longer terms.
CD Rate Calculator and Strategy Builder
Compare CD earnings to high-yield savings and build a laddering strategy.
CD at 4.25% for 1-year
Interest earned
$1063
Top banks
Discover, Capital One, Ally
HYSA at 4.25% (same period)
Interest earned
$1063
CD advantage
$0
Frequently Asked Questions
What is the best CD rate available right now?
As of March 2026, the best rates are 4.40% to 4.60% for 3 to 6-month CDs (Bread Financial, BMO Alto, CIT Bank). One-year CDs top out around 4.25% (Discover, Capital One, Ally). Longer-term 5-year CDs offer 3.50% to 3.90% (Synchrony, Marcus). Rates have been declining as the Federal Reserve cuts the federal funds rate.
Should I lock in a CD rate now or wait?
With the Fed expected to cut rates further in 2026, today's CD rates will likely be higher than rates available 6 to 12 months from now. Locking in a 1 or 2-year CD now preserves today's yield even as high-yield savings account rates decline. If you have money you will not need for 12 or more months, a CD is likely the better choice versus waiting.
What is a CD ladder and should I use one?
A CD ladder splits your deposit across multiple terms (for example, 6-month, 1-year, and 2-year). As each CD matures, you either use the money or reinvest at the current rate. This balances liquidity (access to some money every 6 months) with rate-locking (your 2-year CD preserves today's rate). Laddering is ideal for money you want to keep safe but do not need all at once.
Are CD rates taxable?
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 will send you a 1099-INT form each year. For CDs in tax-advantaged accounts (IRA, 401k), the tax is deferred until withdrawal.
What happens if I withdraw a CD early?
Most banks charge an early withdrawal penalty ranging from 60 days of interest (Ally on 1-year CDs) to 18 months of interest (Discover on 5-year CDs). The penalty comes out of your earned interest, and if the penalty exceeds the interest earned, it reduces your principal. No-penalty CDs from Discover, Ally, and Marcus allow early withdrawal without penalty.
What is the difference between a brokered CD and a bank CD?
Bank CDs are opened directly with a bank (Ally, Discover, Marcus). Brokered CDs are purchased through a brokerage (Fidelity, Schwab, Vanguard) from various issuing banks. Brokered CDs can sometimes offer higher rates and are tradeable on the secondary market. Both are FDIC insured at the issuing bank up to $250,000.
Is a high-yield savings account better than a CD?
If you need access to your money at any time, a HYSA is better because there is no lock-in. If you have money with a known timeline (tax payment in 6 months, down payment in 1 year), a CD locks in today's rate, protecting you from future rate cuts. Currently, HYSA rates and short-term CD rates are similar, but CDs will maintain their rate while HYSA rates decline with Fed cuts.
How are CDs FDIC insured?
Each depositor is insured up to $250,000 per bank. If you have $500,000 to invest in CDs, spreading across two banks gives you full $250,000 coverage at each. Brokered CDs through Fidelity or Schwab can automatically spread deposits across multiple issuing banks for broader FDIC coverage.