A certificate of deposit pays a higher yield the longer it’s left untouched. this can vary from a week to several months and even years.
For example, a five-year CD pays a higher return than a three-year CD. But the trade-off is that the money remains untouched the CD matures. Otherwise, you might face early withdrawal penalties.
Similarly, 3 year CD yields higher returns than what you will earn from a high yield savings account or traditional savings accounts. But the funds must be left untouched until the CD matures.
In this article, we will look at the best five-year CD rates, and share detailed insights about them. We will also share other details related to five-year CD such as whom are they best for. So keep reading to learn everything about five-year CD rates and three-year CD rates face-off against savings accounts.
Overview: Best 5-year CD rates
Detailed Insight: Top Bank or Credit Union Offering 5-years CD
Here are our detailed insights into the top bank or credit union 5 year CD rates for November. You can find all the federal funds rates, CD rates, and everything you need to know below.
Pentagon Federal Credit Union: Best For Comprehensive CD Terms
Pentagon Federal Credit Union is our top pick because it offers the highest annual percentage yield (APY). Moreover, PenFed has over nine terms of CDs ranging from six months to seven years. this offers tremendous flexibility for the customer.
On the other hand, The Pentagon Federal Credit Union has 2 million customers. Which makes this credit union trustworthy and a sound financial institution for investment. Plus, the Pentagon Federal Credit Union has the best overall rates for a $1000 minimum deposit.
↳ Best Feature?
Pentagon Federal Credit Union has the highest Annual Percentage Yield of all the banks and credit unions mentioned above. This is a strong competitive point for this credit union which attracts millions of customers.
↳ Who is it Best For?
People who are looking for a high Annual Percentage Yield APY.
Click Here to Know More About PenFed Credit Union 5year-CDs.
First Tech Federal CU: Best For Credit Union 1.15 APY
First Tech FCU has a strong team on its back. It was founded in 1952 by a group of ex-employees of HP and Tektronics. This credit union focuses on its members more than any other bank or credit union.
You can be a part of First Technology FCU if a family member or someone you know gives you an invite. You can also join the Federal Tech FCU if a family member or you work for a company on the list of First Tech FCU or work for the State of Oregano.
↳ Best Feature?
First Tech FCU is known for its excellent checking account features with no monthly fee. You get 0.50% APY, Individual Retirement Accounts and traditional savings account features. You also get six terms of CDs with a minimum deposit of $500. Plus if you belong to the financial fitness association you can score credit union 1.15 APY.
↳ Who is it Best For?
This credit union is hands down best for people looking for the best of both worlds. You get excellent savings accounts with a low minimum deposit.
Click Here to Know More About First Tech Federal CU 5year-CDs.
Quontic Bank: Best Adaptive Online Bank
The Quontic Bank was established in 2005 with its headquarters in New York. It’s one of the best online banks for buying CDs. You only need $500 to open a CD account with an APY of 1.11%.
The bank offers five-CD terms from 1 year to 5 year CD. But that’s not all, this bank also has one of the best savings account and two checking accounts.
↳ Best Feature?
Quontic bank offers the most streamlined digital features among all online banks. The sign-up process is very easy with no monthly fees. Plus it has an extensive ATM network as well.
↳ Who is it Best For?
Quontic Bank is best for people who want to move from traditional banking. Plus if you want high-interest rates in one place you can trust Quontic Bank.
Click Here to Know More About Quontic Bank 5year-CDs.
SchoolsFirst Federal Credit Union: Education Sector’s Number 1 Choice
SchoolsFirst Federal Credit Union has low minimum balance and CD terms. You can find the lowest minimum deposit rates for as short as 30 days to as long as 5 years. However, you score credit union 1.15 APY, you need to make a minimum deposit of $20,000.
↳ Best Feature?
SchoolsFirst Federal Credit Union is centered on helping retired professors and teachers. This credit union offers competitive rates and excellent savings account. Plus, the SchoolsFirst Federal Credit Union has over 50 branches nationwide.
↳ Who is it Best For?
SchoolsFirst Federal Credit Union is best for retired teachers and professors. The credit union offers for minimum balance tiers such as $500, $20,00, $50,000 and $100,o00. Plus it has 1.01% APY so if you are a retired educator looking for the best CD rates, The SchoolsFirst Federal Credit Union is your best bet.
Click Here to Know More About SchoolFirst FCU 5year-CDs.
Bethpage Federal Credit Union: Complete Financial Institution
The Bethpage Federal Credit Union was founded in 1941. It’s located in New York and regarded as a complete financial solution. you can open a checking account, savings account, get personal loans and other financial products.
You can find a lot of financial services at the Bethpage Federal Credit Union. It has some of the best customer service. Plus, you get additional perks of being a member of this Federal Credit Union service.
↳ Best Feature?
The Bethpage Credit Union has over 400,000 members and nine CD terms. The breakage of the CD terms is realistic and according to customer preferences. Unlike other credit unions that have CD terms for more than a decade, you can choose from 3 months to 5 years at Bethpage. Plus, the best feature of this Federal Credit Union is the bump-up CD.
↳ Who is it Best For?
The Bethpage Federal Credit Union is best for people looking to steer away from the banking sector. This Federal Credit Union has all the features of a bank. So much so, that you’ll quit your existing banks.
Click Here to Know More About Bethpage FCU 5year-CDs.
Capital One: Best For No Minimum Deposit
Capital One is a strong competitor for Quonton Bank when it comes to online services. It’s also one of the finest online banks ranging with the top players. Plus, it’s one of the few online banks that have physical branches.
You get competitive rates for CDs and a savings account. Capital One has an excellent mobile app that’ll reduce your trips to the bank’s physical branch. But if you prefer talking to a person to your cell phone, you might have to look elsewhere.
↳ Best Feature?
The best feature of Capital One bank is the 360 performance savings account. You don’t need to have a minimum balance to operate this bank’s services. Plus, Capital One CD and its 360 Performance Savings account are customer-friendly without any monthly charges.
↳ Who is it Best For?
It’s an ideal bank for people who prefer online services and physical branches. Plus, if you are looking for a bank with all the benefits for stacking your savings, you’ll love Capital One.
Click Here to Know More About Capital One 5year-CDs.
Popular Direct: Best Competitive Rates
Popular Direct is a subsidiary of Popular Inc. It’s an online community bank with a range of services. However, the bank is best known for its competitive rates. Don’t be confused, this bank was formerly known as the Banco Popular Noth America.
If you withdraw funds on a 5 year CD before it matures, your penalty is only 730 days easy interest. Plus, Popular Direct offers eight CD terms from 3 months to five years. The interest rate compounds daily and Popular Direct customers love this feature.
↳ Best Feature?
Hands down this bank’s top feature daily compound interest rate. Plus, Popular Direct’s competitive terms are not bad either. In addition, Popular direct offers saving accounts as well.
↳ Who is it Best For?
Popular Direct is a good choice for people looking for the best interest rates on CDs and savings accounts. You won’t find a better bank than this. Plus, Popular Direct has excellent customer service that’ll keep you satisfied.
Click Here to Know More About Popular Direct 5year-CDs.
VyStar Credit Union: Most Excellent CD Terms
The VyStar credit union offers 1.00% APY for a minimum deposit of $500. Its minimum balance requirements are considerably low. Plus this credit union doesn’t charge a monthly fee on its ATM service.
While VyStar credit terms range from 3 months to 5 years, it has an additional 30 month CD. Although the minimum deposit for a Vystar CD account is very low, account holders need to deposit $50,000 to earn maximum yield for each term.
↳ Best Feature?
The best feature of VyStar credit union is that it offers an 18 month step-up CD. This option allows people to test if they are fit to open a CD account. This can act as a CD ladder helping customers find their way up to a 5 year CD.
↳ Who is it Best For?
VyStart credit union offers account options for kids and college students. It’s also best for those who want to earn interest in their checking account.
Click Here to Know More About VyStar Credit Union 5year-CDs.
Delta Community Credit Union: Most Widespread Credit Union
Delta Community Credit Union account offers competitive CD rates. Its checking account is free and you can earn rewards each time you sign up for a debit card purchase. Delta members can access co-op surcharge-free ATM as well.
The Delta Community Credit Union offers Personal savings account for $5 without a monthly maintenance fee. Although the Personal savings account doesn’t offer competitive rates like its CD, it’s not a bad option.
Delta Community Credit Union offers 5 CD terms. Its CDs are consistently among the highest yield offered. Plus early withdrawal penalty for six months CD is 60 days worth of interest and 90 days for one year CD.
↳ Best Feature?
The best feature of the Delta Community Credit Union is that it doesn’t hold an early withdrawal penalty for CDs opened after May 2017. Any CDs opened with Delta Community Credit Union before this date are subject to early withdrawal penalties disclosed in the CD terms.
↳ Who is it Best For?
The Delta Community Credit Union is best for those looking for competitive rates of CDs. It’s also a great option for people who want to open a checking account. If you are into reward points, you’ll love Delta Community Credit Union.
Click Here to Know More About Delta Community CU 5year-CDs.
Suncoast Credit Union: Best Perks and Discounts
Suncoast is Florida’s largest credit union. It offers all sorts of account services including a checking account and a savings account. Suncoast Credit Union members have access to some of the best perks and discounts.
Suncoast Credit Union has a smart checking account and teen checking account. It allows students 13 and older to open a joint checking account as well.
↳ Best Feature?
The best feature of Suncoast credit union is that its CDs have a higher yield than the national average. However, the early withdrawal penalty on its CDs is a bit harsh. Nevertheless, its customers don’t cash out their CDs before they have reached their maturity date.
This is probably because Suncoast credit union annual percentage yield (APY) for one year CD was almost twice the national average.
↳ Who is it Best For?
Suncoast Credit Union is best for customers looking to buy a house or a car through CDs. This credit union has some of the best annual percentage yields on its 1 year CD and 5 year CD.
Click Here to Know More About Suncoast Credit Union 5year-CDs.
First Internet Bank of Indiana: First FDIC Insured Bank
Being the first FDIC-insured bank, this bank has earned a name for its services. The bank offers a highly competitive annual percentage yield (APY) on its CDs.
It offers eight Cd terms. However, the early withdrawal penalty on the 3 month CD is 90 days. This is significantly higher than Suncoast Credit Union.
↳ Best Feature?
The feature of this bank is its transparency. Customers can clearly see early withdrawal penalties on the website. Plus, the free savings account is a good bargain and you don’t have to pay a monthly fee on it.
↳ Who is it Best For?
The First Internet Bank of Indiana is clearly the best choice for those looking for an online bank. Plus, this bank has excellent CD rates and ATM reimbursement plans.
Click Here to Know More About First Bank of Indiana 5year-CDs.
Navy Federal Credit Union: World’s Largest Credit Union
The Navy Federal Credit Union members have access to 300 branches. The credit union also has 9 international branches as well. The Navy Federal Credit Union is known for its excellent customer service.
In addition, its members have thousands of free in-network ATMs at their disposal. The credit union offers a strong annual percentage yield on its CDs. Its CD terms range from 3 months to 7 years with a three-year variable rate certificate.
↳ Best Feature?
The Navy Federal Credit Union has excellent customer service. But that’s not its main selling point. Instead, the Navy Federal Credit Union is known for its three-year variable interest rate certificate.
↳ Who is it Best For?
It’s best for retired Navy personnel who want a widespread ATM network and credit union branches. In addition, The Navy Federal Credit Union is also a great option for customers with 6 figure deposits.
Click Here to Know More About Navy Federal CU 5year-CDs.
Golden 1 Credit Union: Largest Credit Union in The US
Being one of the largest credit unions in the US, Golden 1 offers a huge variety of financial products. You’ll need a bit of money to open an account with Golden 1. However, most of this credit union’s financial products come with low to no maintenance fees.
Membership with Golden 1 is relatively easy for those living in California. Plus, you get a free checking and regular savings account.
↳ Best Feature?
The best feature of Golden 1 is its extensive ATM service. In addition, Golden 1 offers flexible CD terms for its members. You can get started with just a $500 minimum balance.
↳ Who is it Best For?
Golden 1 is the best choice for people who want comprehensive financial products. While we were conducting this review, Golden 1 offered special CDs. However, they aren’t available as of publishing.
Click Here to Know More About Golden1 Credit Union 5year-CDs.
Synchrony Bank: Best Market Rates
Synchrony Bank issues a credit card along with other financial products. Plus, it’s an award-winning online bank so you can result assured about its online features. You can access a wide variety of financial services online through Synchrony bank, including its CDs.
It’s one of the few online financial institutions that offer competitive CD rates. In addition, customers can open an account online with this bank. Synchrony Bank issues an ATM card which you find in most online financial institutions.
↳ Best Feature?
The best feature of Synchrony Bank is its CD terms. You can find a CD within your budget. Plus, you can find Roth IRA CDs with this bank which is not the case with most online financial institutions.
↳ Who is it Best For?
It’s the best financial institution for ATM reimbursements and competitive CD rates. Which makes it an ideal choice for those who constantly withdraw funds from ATMs. However, it’s the only financial institution that’ll close your account if it doesn’t have any money for 60 days.
Click Here to Know More About Synchrony Bank 5year-CDs.
Comenity Direct: Bank Behind Branded Retail Credit Cards
The bank behind branded retail credit cards offers the best competitive CD rates as well. Plus, it’s FDIC insured bank so your money is safe. The bank offers one to five-year CDs and is far better than most brick-and-mortar banks.
The minimum deposit requirements are reasonable at $1500 given the services provided. However, this bank doesn’t offer any special CDs or bump-up CDs.
↳ Best Feature?
The best feature of Comenity Direct bank is its customer service. This bank is sharp at solving customer problems and we didn’t face any problems with them. During the review, we tested this bank’s app and it was much easier to understand than other online financial institutions.
↳ Who is it Best For?
This bank is a good choice for consumers looking for a safe place to put their money. Plus, this bank is a robust online solution for your banking needs. This bank is ideally for savers so if you are looking for a checking account, you’ll have to keep looking.
Click Here to Know More About Comenity Direct 5year-CDs.
TIAA Bank: Wide Variety of Financial Services
An online bank with an assortment of financial services – what more can you ask for? The TIAA Bank offers a competitive yield of CDs along with surcharge-free ATM services.
The bank has a very limited branch network but who needs one when it has an excellent app? There is a $500 minimum deposit with no additional monthly charges.
↳ Best Feature?
The best feature of the TIAA Bank is its checking account. You can earn interest on it but it isn’t much. Nevertheless, something is better than nothing.
↳ Who is it Best For?
The TIAA Bank serves in all 50 states making it the most approachable bank on our list. Plus, you can send and receive money in-app through the Zelle feature.
Click Here to Know More About TIAA Bank 5year-CDs.
What is a 5-year CD?
A five-year CD is a deposit account that pays interest for leaving your money in the bank’s custody for the duration (5 years). The interest earned on a five-year CD is higher than money market accounts or most traditional savings accounts. However, you do not have access to your money for the specified period.
If you do take your money before your CD matures, you’ll be subjected to early withdrawal penalties. this penalty could be a monetary fine on taking out the money before the contract matures.
Several Bankrate calculators can help you determine how much interest you can earn on your CD. The best part about a five-year CD is that your principal amount is protected. Therefore, you don’t have to worry about losing your money like in the stock market.
Plus with a five-year CD, you earn a fixed interest rate. Therefore, you don’t have to worry about the fluctuating interest rates in a savings account nor have any fears of decreasing CD yields.
On the other hand, Goldman Sachs Bank USA offers no-penalty CD rates. This means you won’t face penalties for early withdrawals.
How does 5-year CD works?
Opening a CD account with a financial institution involves making an agreement that you will deposit a certain amount of money with them. The money will sit untouched in exchange for earning a fixed rate of interest. The interest rate is guaranteed for life. So you can calculate how much money you’ll have by the time your CD matures.
A certificate of deposit resembles a deposit account. Similar to a high yield savings account, they serve as a holding pace for your funds. But it’s best to put money that you won’t be using for the specified duration of your certificate of deposit. Because you won’t have access to this money without an early withdrawal penalty.
Unlike a savings account and a money market account, a certificate of deposit has allow a single initial deposit. So you can’t add money to your cd accounts after your certificate of deposit is active. A 5 year CD can also be a CD ladder with a mix of short and long-term CDs.
Who is 5-year CD best for?
A 5 year CD is best for people who have money lying in their savings account. Moreover, a 5 year CD is also an excellent choice for people willing to buy a house or a car. If you have dormant money that you don’t use or plan to save, you can add it to your CD accounts.
This will give you an opportunity to earn a fixed interest rate for the duration of your certificate of deposit. In short, 5 year CD accounts are best for people who are aiming for a long-term goal or an investment.
Can you lose money on a 5-year CD?
Since 5 year CD rates are fixed there are fewer chances of losing your money. However, inflation might have an adverse impact on your 5 year CD. You won’t technically lose money but its value will decrease. For instance, what you could afford for $5 will probably be worth $10 by the time your 5 year CD matures.
Nevertheless, the fixed interest rate ensures the value of your money keeps increasing. But in most cases, the fixed interest rate isn’t a good defense against rising inflation. For instance, if the inflation rate crosses your fixed interest rate, you will lose your value for money.
Compared to a savings account the financial gain in a 5 year CD is much higher. Savings accounts are vulnerable to variable interest rates. This means that the interest rate you earn on your money will change. In this situation, your interest rate could fall much below the rising inflation.
So if you are considering buying a house with your 5 year CD you should have a savings account on the side. By the time your CD matures, you’ll have enough savings to support your purchase. If you solely rely on a 5 year CD, the increasing property rates will always be a step ahead of your financial planning.
3-year CD vs Money Market Accounts
A money market account and a 3 year CD are both financial products viable for savings and earning interest. Here are the differences between a 3 year CD and a money market account.
Money Market Accounts
Money market accounts are excellent financial products. They are considered hybrid accounts because have the best features of both checking and high yield savings accounts. You have the benefit of writing checks and ATm services plus, you earn a higher return than a high yield savings account.
You might have to double-check with your bank about ATM and check writing services in a money market account. Some banks don’t provide one of the two prior mentioned features in their money market account.
A money market account doesn’t offer all the benefits of a checking account. For instance, you are limited to six transactions per statement. Therefore, you can’t move your money back and forth in a money market account.
You may also want to be wary of the money market account minimum deposit policy. Some money market accounts required a $2,500 minimum deposit at the start. The minimum deposit needed can go up to $25,000.
3 Year Certificate of Deposit
A certificate of deposit is a short-term deposit account. You choose the duration of the certificate of deposit from the options provided by your bank or credit union. Among several options, the most popular choice is a 3-year CD. Once you open a certificate of deposit, you need to make a deposit. The deposit can vary depending on when your CD matures and several other options. For instance,
- Certificate of deposit in Teachers Federal Credit Union – $1,000 minimum deposit
- Certificate of deposit in Navy Federal Credit Union – $1,000 minimum deposit
- Certificate of deposit in Interior Federal Credit Union – $500 minimum deposit
- Certificate of deposit in Tech Federal Credit Union – $1,000 minimum deposit
- IRA Certificate of deposit in Lafayette Federal Credit Union – $50 minimum deposit
When it comes to interest rates, a money market account is your best bet. A money market account is typically higher than a savings account. However, when we put 3 year CD and a money market account side-by-side, we can see that the former has higher interest rates over time. The only drawback of a 3 year CD is that your money is tied up. But when your certificate of deposit matures, you get your principal amount back plus the interest you earned on it.
This means that you’ll have to wait at least 3 years to snag higher interest earnings from a certificate of deposit. Typically, a 3 year CD is the best investment because you get your principal amount returned in full when your CD reaches its maturity. However, an early withdrawal penalty is a deal-breaker on a 3 year CD.
3-year CD vs Savings Account
3-year CD and savings accounts have a lot in common. But they are different on a few points. Here is a detailed look at the difference between a 3 year CD and a savings account.
High Yield Savings Accounts and 3 Year CD Head-to-Head
A savings account is a type of bank or credit union account that lets you keep your money and earn an interest rate. Most high yield savings accounts offer limited transactions and if you cross that limit you’ll have to pay a $5 fee. If the transactions continue on your savings account after incurring fees, the bank or credit union might turn your savings account into a checking account.
That’s one of the major drawbacks of a savings account because your money is somewhat tied up. But this feature makes it all the more similar to a 3 year CD. However, where a 3 year CD fails, savings accounts take the crown.
For instance, you can make additional deposits in a savings account without incurring any penalties. On the other hand, a 3 year CD is a fixed deposit, meaning you can’t add more money to it. Therefore, you might be at an advantage in choosing a savings account.
But in terms of interest rates, CD accounts take the cake because you’ll get a slightly higher and fixed interest rate. Nevertheless, the drawback of having your money tied up for 3 years is a deal-breaker for most people. But if you are saving up for a new car, a 3 year CD might be a better choice than a savings account. This is because after 3 years, you’ll get your principal amount back plus the interest you earned off it.
3-year CD vs 5-year CD
Typically, a 5 year CD is considered better for savings than a 3 year CD. This is primarily because you get higher interest rates the longer you hold your money. However, a 3 year CD has an annual percentage yield of 0.19%. Online banks like Marcus by Goldman Sachs offer 3 year CDs and 5 year CDs. In fact, most financial institutions (banks and credit unions) offer even longer CDs. But keeping the subject in mind, we’ll explore the difference between 3 year CD and 5 year CD rates
3 Year CD and 5 Year CD Rates Head-to-Head
A 3 year CD is a great option to set aside money for buying a car. But if you have bigger plans in mind, a 5 year CD is much better. First of all, you get higher interest rates on a 5 year CD. Plus, your money is held up for a long time keeping them safe from your spending habits.
However, you will face a hefty early withdrawal penalty even if you take out money for a financial emergency from your 5 year CD. But, some banks and credit unions offer additional benefits with a 5 year CD. credit unions like the Abound Credit Union, Penfed Credit Union, and Connexus Credit Union have excellent annual percentage yields on 3 year CD and 5 year CD.
A 5 year Cd has much higher early withdrawal penalties. This is primarily because you are getting much higher interest rates. However, early withdrawal penalties on a 3 year CD aren’t low either. Similarly, the minimum balance required is also higher in a 5 year CD.
Final Verdict
Banks and credit unions might have their differences but they offer tremendous services. It’s best to borrow personal loans and CDs from a credit union because they offer competitive rates. However, those looking for a full-fled financial solution prefer banks as their main financial institution.
While all the banks and credit unions mentioned above are excellent, Pentagon Federal Credit Union takes the crown. It offers a Federal credit union of 1.25 APY. In addition, it’s backed by the National Credit Union Administration. You can find 9 CD terms with the Pentagon Federal Credit Union making it easier to find one in your budget.
Some of the most popular US banks offer the lowest annual percentage yield APY. Therefore, we didn’t include them in the list above. However, you can find their latest 5 year CD rates for November mentioned below.
Here are the 5 year CD rates for November of the most popular banks.
- Ally Bank – 0.80% APY with $0 minimum deposit
- Discover Bank – 0.80% APY with $2500 minimum deposit
- Live Oak Bank – 0.70% APY with $2500 minimum deposit.
FAQs
Are CD rates going up or down in 2024?
In March 2020, the Fed’s dropped CD rates to nearly zero. However, the cut was on special CD rates which had been on the higher side from the beginning. These include cuts on CD rates offered by Abound Credit Union and Third Federal Savings and Loan.
Some banks also lowered their CD rates for 2 year CD and 3 year CD. These weren’t special CDs but they were on the high side for online banks. However, Marcus by Goldman Sachs increased its short-term CD rates. Its 9 month CD rates increased from 0.25% to 0.55%
How much will a 10 000 CD make in a year?
It depends on the Annual percentage yield of your CD. You can make as much as $250 per year on $10,000 CD if the Annual Percentage Yield is 0.50. You can find a certificate of deposit with Credit union 1.25% APY and Federal credit union 1.25% APY which will increase your earnings on a $10,000 CD.
What is the average rate for a 3 year CD?
A 3 year CD usually offers higher CD rates compared to a 2 year CD and 4 year CD. This is mainly because a 3 year CD is considered a mid-term CD in terms of its maturity date. While you can’t take out your money sooner than the time disclosed in your CD, you can get good CD rates if you have patience.
The average CD yield for most Certificates of deposits is between 1 and 1.50%. The average CD rate for a 3 year CD is 1.14 Annual Percentage Yield. This s a good number considering the sharp decrease in CD rates over the last 2 years.
Are all accounts listed above insured by FDIC or National Credit Union Administration?
All the banks mentioned above are FDIC-insured banks. Therefore, your money isn’t going anywhere. Plus, the credit unions listed above are also insured with National Credit Union Administration.