Best 10-Year CD Rates for September 2024

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Savers with long-term savings plans may find a lot of value in a 10-year CD. The ability to lock in a reasonable interest rate for the long term can help you map out your savings goals and lay the groundwork for your future plans. Of course, a 10-year CD is a big commitment. If you open a 10-year CD, you’ll lose access to your funds for an entire decade. Keep that time commitment in mind when selecting the appropriate CD for your situation.

Before you lock your funds into such a long-term commitment, make sure you read the fine print. Here’s a breakdown of the top 10-year CDs offering some of the best rates.

Best 10-Year CD Rates

• Apple Federal Credit Union: APY
• Credit Human: APY
• Discover® Bank, Member FDIC: APY
• Vio Bank: APY
• EmigrantDirect: APY

Apple Federal Credit Union

• Rate: APY
• Account minimum: $500
• Early withdrawal penalty: A maximum of 36 months’ worth of interest

Apple Federal Credit Union offers certificates with terms ranging from six months to 10 years. The minimum deposit amount of $500 offers a relatively low threshold for savers looking to open a long-term CD.

In order to work with Apple Federal Credit Union, you’ll need to meet membership requirements. The most common way to qualify is by living, working, worshipping or attending school in qualifying areas of northern Virginia. However, employees or members of other organizations can also apply for membership.

Credit Human

• Rate: APY
• Account minimum: $500
• Early withdrawal penalty: Either 36 months’ worth of interest or $50, whichever is greater

Credit Human is a credit union that offers members a 10-year CD with a APY. With a minimum balance requirement of $500, this is an accessible option for many savers. That’s especially true because joining this credit union is relatively easy. Prospective members can join by agreeing to a complimentary membership in the American Consumer Council. Additionally, members must keep at least $5 in a member savings account.

The early withdrawal penalty is relatively steep, at up to 36 months’ worth of interest. But if you aren’t planning on accessing the funds for the 10-year term, it shouldn’t be a problem.

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Discover® Bank

• Rate: APY
• Account minimum: $2,500
• Early withdrawal penalty: 24 months’ worth of simple interest

Discover Bank, Member FDIC, offers a 10-year CD term with a APY. While that’s slightly lower than some of the options on this list, it’s still competitive. And since Discover is a bank, you won’t have to jump through any credit union membership requirements. While the early withdrawal penalty is somewhat lower than some other 10-year CD options, the $2,500 minimum deposit requirement might be an obstacle for some savers.

Vio Bank

• Rate: APY
• Account minimum: $500
• Early withdrawal penalty: 3% of the amount withdrawn, plus a $25 fee

Vio Bank, the online division of MidFirst Bank, offers savers a APY on a 10-year CD. The minimum balance requirement of $500 makes this an option for savers at most levels. But the early withdrawal penalty of 3% of the withdrawal amount plus a $25 fee is high. Before moving forward with this CD, make sure you won’t have to make an early withdrawal.

EmigrantDirect

• Rate: APY
• Account minimum: $1,000
• Early withdrawal penalty: Six months’ worth of interest

Emigrant Bank has been around since 1850, and EmigrantDirect is the online banking division of this long-standing bank. Savers can access a 10-year CD with this bank with a APY. The bank requires a minimum account balance of $1,000, which could be a limiting factor for some savers. But the early withdrawal penalty of six months’ worth of interest is more affordable than some of the other options on this list.

How Does a 10-Year CD Work?

A 10-year CD works much like certificates of deposits with other term lengths. The basic principle is the same. Savers can deposit funds into a CD to lock in a predetermined interest rate over the term of the CD. In general, you won’t be able to make additional deposits to the CD after you open the account.

If you leave the funds untouched for the entire CD term, you’ll earn the expected interest. But if you choose to make an early withdrawal, you’ll likely face an early withdrawal penalty, which can cut into your interest earnings.

Rules of a 10-Year CD

If you are considering a 10-year CD, it’s important to read the fine print before you sign on the dotted line. Otherwise, your funds could be locked into a CD with less-than-favorable terms. Here’s a breakdown on the CD rules.

Early Withdrawals

The cardinal rule of a CD of any term, including a 10-year term, is to avoid early withdrawals. If you need to make a withdrawal before the CD’s maturity date, you’ll likely be on the hook for an early withdrawal penalty. Depending on when you make the withdrawal, you could miss out on a significant amount of interest earnings.

Before you open a 10-year CD, be reasonably sure that you won’t need the funds until the maturity date. Of course, life can throw something unexpected your way. But do everything in your power to lay the groundwork to avoid any early withdrawals. In practice, this typically means you have other funds that are more accessible to cover any emergencies that might arise.

Are 10-Year CDs a Safe Investment?

A 10-year CD is one of many investment choices. On one hand, 10-year CDs are a safe investment because you don’t take on any risk. You won’t have to worry about losing any money because many CDs are offered by FDIC- or NCUA-insured institutions, which means your funds are protected for up to $250,000. With that, CDs are a safe investment from the perspective of not losing any money.

However, the real risk of a 10-year CD comes through the opportunity cost. When you open this long-term CD, your funds are locked up for a decade. Even for the most dedicated savers, that’s a long time. Since interest rates can change over time, locking in a 10-year CD rate now could mean missing out on higher APYs in the future. Plus, it’s possible for the inflation rate to outpace the interest rate, which could mean the funds in your CD actually lose purchasing power over the decade.

How Much Does a 10-Year CD Pay?

Every financial institution that offers a 10-year CD can offer a different rate. The rates offered by credit unions and banks for a 10-year CD fluctuate based on the federal funds rate. In general, CDs with a longer term pay more in interest than CDs with a shorter term. But since a 10-year CD term is such a long time, financial institutions tend to offer lower rates because it’s difficult to predict how the market will change over the next decade.

As a saver, you can calculate exactly how much your 10-year CD will pay before signing up. For example, let’s say you plan to deposit $5,000 into a 10-year CD with an APY of 4.00% that reinvests its dividends. Over the 10-year CD term, your $5,000 deposit would grow to $7,454.

Pros and Cons of 10-Year CDs

Every financial product has advantages and disadvantages. A 10-year CD is no exception. Below are some of the pros and cons to consider.

Pros

• Competitive APYs: Savers may have a chance to lock in relatively high APYs for a CD with a longer term.
• Fixed interest: As a saver, you’ll know exactly how much you stand to earn in interest over the CD’s term.
• Safe place to store cash: If you open a CD at an FDIC-insured bank or NCUA-insured credit union, your funds are safe for up to $250,000 per account holder if the financial institution fails.
• Useful for long-term CD ladders: A CD ladder involves setting up multiple CDs of varying terms to mature at different times. In general, a 10-year CD is the longest term you can add to your ladder.

Cons

• Lose access to your funds: When you commit to a 10-year CD, you can’t easily access your funds for an entire decade. That’s a long time to leave your funds untouched.
• Early withdrawal penalties: If you need to make a withdrawal before the CD matures, you’ll likely face an early withdrawal penalty. Depending on the situation, this choice could take a big bite out of your savings.
• Interest rate may lose luster: The interest rate market fluctuates over time. In the course of 10 years, it’s possible that the interest rate you lock in for the long term is no longer attractive.

How To Choose the Best 10-Year CD

If you decide that a 10-year CD is the best option, choosing the right one can make all the difference. Of course, APY is a top factor. But you should also consider other details before committing your funds for an entire decade. Below is a look at some of the aspects to consider as you search for the right CD:

• APY: The right APY can help you make the most of your savings. If you want to put your funds to work efficiently, finding a high APY is a top priority.
• Minimum balance requirements: Many financial institutions impose minimum balance requirements. It’s important to find a CD with a minimum balance requirement that doesn’t stretch your finances too far. Remember, you don’t want to stash all of your savings into a 10-year CD. Instead, you should only use funds you can comfortably live without for the next 10 years.
• Withdrawal penalties: Most banks and credit unions impose an early withdrawal penalty. Of course, you’ll want to avoid taking an early withdrawal. But if you need to access the funds early, a lower early withdrawal penalty is preferred.
• Fees: CDs can come with fees attached. Read the fine print to ensure you are comfortable with any of the fees involved.
• Compound interest: If possible, opt for a CD that compounds interest daily to maximize your earnings.
• Insurance: Both FDIC and NCUA insurance protect your funds for up to $250,000. But you should confirm the institution you choose to work with is covered by this insurance.

Alternatives to 10-Year CDs

A 10-year CD is one of many savings products available. Savers who want another option should consider the following:

• High-yield savings account: A high-yield savings account allows you to maintain easy access to your savings without forgoing an attractive APY. In fact, many high-yield savings accounts offer APYs over 5%. If you choose to stash your savings in a high-yield savings account, you won’t lose access to your funds. With that, it’s a useful option for savers who are building emergency savings.
• Money market account: A money market account offers another way to retain access to your savings while enjoying a relatively high APY. Many money market accounts offer the ability to spend funds directly from the account through a debit card or check-writing privileges. In general, money market accounts are a flexible option for savers who want the ability to access their funds without a penalty.

Many savers opt to open both CDs and a more flexible account. For example, you might choose to stash your emergency fund in a more accessible high-yield savings account and store long-term savings in a CD.

Takeaway

A 10-year CD might be a good choice for your long-term savings goals. If you choose to open a CD of any term, take time to shop around for one that offers the best yield and low fees.

John Csiszar 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 Sept. 11, 2024.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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