Best 5-Year CD Rates for October 2024

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A certificate of deposit, or CD, is a time deposit you can buy at a bank. You deposit a sum of money and agree to leave it there for a set term, like five years. In return, the bank pays you a guaranteed rate of interest. You know just how much your investment will earn, plus it’s FDIC-insured — as long as the bank is.

If the appeal of a locked-in return is enticing, a 5-year CD might be a good fit for your financial goals. Keep reading to learn about the best 5-year CD rates.

What Are the Highest 5-Year CD Rates?

Here’s a look at 17 banks that are offering some of the best 5-year CD rates for October 2024.

Best Banks for 5-Year CD Rates

So what are the best five-year CD rates right now? The highest 5-year CD rates range from APY to APY . Here’s a closer look at the banks and credit unions offering the best rates for this relatively long-term CD.

Alliant Credit Union

Alliant Credit Union offers a 5-year certificate with a APY. But if you save more than $75,000 in the CD, the rate bumps up to APY. You’ll need at least $1,000 to open a CD. But if you withdraw the funds early, you’ll face an early withdrawal penalty worth up to 180 days of dividends.

If you want to join the credit union, you can become an Alliant Credit Union Foundation digital inclusion advocate or live near the credit union’s headquarters in Chicago.

Lending Club

Lending Club offers a 5-year CD with a APY. The minimum deposit requirement is $2,500.

Self-Help Credit Union

Self-Help Credit Union offers a 5-year certificate with a APY. You’ll need to make a minimum deposit of $500. You can join the credit union from anywhere in the country. But the credit union only has branches in Florida, North Carolina, South Carolina and Virginia.

Marcus by Goldman Sachs

Marcus by Goldman Sachs has a APY available on a 5-year CD. You can open a CD with at least $500. If you withdraw your funds early, you’ll face a penalty equal to 180 days of interest.

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Lafayette Federal Credit Union

For a minimum deposit of just $500, Lafayette Federal Credit Union pays APY on its 5-year Fixed-Rate CD. However, the interest is compounded quarterly, so you’ll make less than a similar APY with interest that compounds monthly or weekly.

You also have to meet the membership requirements to join and open an account. Generally, you’ll need a connection to Potomac, Maryland or certain parts of Washington D.C. to qualify for an account.

LFCU has a good variety of account options beyond fixed-rate options, including jumbo, variable-rate and IRA certificates available.

Popular Direct

Popular Direct will pay you APY on a 5-year CD if you deposit at least $10,000. This CD offers a worthwhile rate, but it also has one of the steepest early withdrawal penalties. You’ll pay up to two years’ worth of interest if you take your money out early.

BMO

BMO offers a 59-month CD Special — one month shy of five years — that pays APY. You’ll need to have at least $1,000 to invest, however, and its regular CD rates are much lower.

This high APY offering is in league with other online accounts, with the added bonus of branch availability.

Bread Savings

Bread Savings pays APY on its 5-year CD. You’ll need a $1,500 minimum deposit, and if you take your money out early, you’ll lose a year’s worth of simple interest.

Quontic Bank

Quontic Bank offers a 5-year CD that pays APY, with a minimum deposit of just $500. Make sure you won’t need the money before the five years are up, though — you’ll give up two years’ worth of interest if you withdraw early.

Discover Bank

Discover Bank’s 5-year CD pays APY for a minimum deposit of $2,500. But make sure you can keep the money in there — if you withdraw it early, you’ll incur a penalty equal to 18 months of simple interest.

Capital One

Capital One has a 5-year CD that pays APY. There is no minimum balance required to open a CD account, and you can decide if you want the interest paid monthly, annually or at the end of the term.

Randolph-Brooks Federal Credit Union

Randolph-Brooks Federal Credit Union pays a tiered rate of interest on its 5-year CDs, depending on the amount of your deposit, which has to be at least $1,000. The APY will range from APY to APY, but you won’t get the highest rate unless your balance is over $75,000.

First Internet Bank of Indiana

First Internet Bank of Indiana pays APY on a 5-year CD, with a minimum deposit of $1,000. You’ll lose a year’s worth of interest if you take the money out early, though, so be sure you can leave it in for the full five years.

Barclays Bank

Barclays Bank pays APY on a 5-year CD, with no minimum deposit required. However, to earn interest, you must maintain a balance that would earn a minimum of $0.01.

Synchrony Bank

Synchrony Bank offers a 5-year CD that pays APY. There is no minimum deposit required. The early withdrawal penalty is one year’s worth of simple interest.

Sallie Mae Bank

Sallie Mae pays APY on a 5-year CD. You’ll need to deposit a minimum of $2,500. It offers an automatic renewal option at the end of your term but charges 180 days’ worth of simple interest if you withdraw the funds early.

Ally Bank

Ally Bank pays APY on a 5-year CD. You’ll be charged 150 days’ worth of interest if you withdraw the funds early.

Things To Consider When Choosing a CD

Rate is perhaps the most important thing to consider when you’re choosing a CD. However, it’s a good idea to weigh additional factors that affect your investment.

• Term: Shorter terms currently pay higher rates, and you can access your money sooner. But longer-term CDs guarantee your rate for many months or years.
• Minimum investment: A CD with a high minimum might make it difficult to devote money to easy-to-access savings accounts or checking accounts that might produce higher returns.
• Fees: Look for a CD with no fees. Otherwise, you’ll net less than you might with a lower-rate CD with no fees.
• Withdrawal penalties: If you need to withdraw money before the CD matures, you’ll lose interest as a penalty. How much you lose depends on the financial institution and the term of the CD.

Pros and Cons of 5-Year CDs

Five-year CDs have their benefits, but there are also a couple of potential drawbacks.

Pros

• Locking your savings into a CD removes the temptation to spend the money.
• A guaranteed CD interest rate ensures that your money grows even if interest rates fall.
• The funds are insured for up to $250,000 as long as the bank or credit union is insured.

Cons

• CDs are subject to interest-rate risk — if interest rates continue to rise, you could be stuck earning 4.50% or so while new CDs are being sold with rates of 5% or 6%.
• You’ll lose a lot of interest if you withdraw the funds early.
• Other investments like stocks tend to outperform CDs in the long run.

Maximize the Interest on Your CDs

Thanks to rising interest rates, CDs provide a good return on your money, and with no risk to your principal amount. They are vulnerable to interest-rate risk, but you have several options to minimize that risk so you can get the most out of your investment.

Compare CDs from Multiple Banks

You don’t have to open a CD with your main financial institution. Comparing options can help you discover better rates and increase your total interest income.

Get a Bump Up CD

A “bump up” CD lets you “bump up” the interest rate if it rises during your term. Make sure you understand the conditions, though — sometimes you only get one rate bump during the term, and in other cases, the CD interest rate increase needs to be within a certain number of months of purchasing the CD.

Consider a No-Penalty CD

A no-penalty CD allows you to withdraw some or all of your balance before the end of the term without a penalty. These CDs often offer lower interest rates and shorter terms, but they’re a good compromise if you want a CD but aren’t 100% sure you won’t need the money before the CD matures.

Build a CD Ladder

A CD ladder refers to the practice of buying multiple CDs with various terms. When each comes due, you can reinvest the money into a longer-term CD, so you have one CD coming due each year and get to take advantage of the current interest rate. Here’s an example of how a CD ladder works.

• Say you have $50,000 to invest.
• You buy 5 CDs for $10,000 each.
• You buy one each — a 1-year CD, a 2-year CD, a 3-year CD, a 4-year CD and a 5-year CD.
• In a year, the 1-year CD matures, so you re-invest that money in a 5-year CD.
• Another year later, the 2-year CD matures, and you re-invest that money in a 5-year CD.
• You continue to do this, and after four years, you now have five 5-year CDs, each maturing a year apart.

You can continue to do this for as long as you want, and you’ll always have the advantage of having a CD come due each year, which you can then reinvest at the current interest rate or, if you’re ready to use the money, withdraw.

Take Advantage of the Inverted Yield Curve

Periods when shorter-term CDs pay higher rates than long-term CDs break from the norm, where banks reward customers for holding money in their accounts longer. That flip-flop is called an inverted yield curve, and it means you’ll find the best rates on 12- or 18-month CDs compared to three-, five- or 10-year CDs.

Final Take

If you’re looking for a solid, guaranteed return on some money that you know you won’t need to touch for at least five years, a CD can be a smart choice — especially if you expect interest rates to fall.

Compare CD Rates

• Best 3-Month CD Rates
• Best 6-Month CD Rates
• Best 1-Year CD Rates
• Best 5-Year CD Rates
• Best No-Penalty CD Rates
• Best Jumbo CD Rates
• Best No-Penalty CD Rates
• Best CDs With No Minimum Deposit Requirement
• Best CD Accounts

Daria Uhlig, Amber Barkley, Sarah Sharkey and Cynthia Measom contributed to the reporting for this article.

Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Oct. 3, 2024.

*Capital One interest rates accurate as of Oct. 3, 2024. See website for all current rates.

GOBankingRates is a personal finance and consumer interest rate website and an online marketing company serving top-tier banks, credit unions and other financial services organizations. Some companies mentioned in this article might be clients of GOBankingRates, which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by the companies included in the article. All fees and rates are subject to change at the issuers’ discretion. Some interest rates might be short-term or promotional offers only, and it is possible additional terms and conditions must be met to obtain the interest rates listed. Rates and availability might vary by region. Verify terms and conditions before opening an account.

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