6 Best CD Rates Of January 2024 (up to 5.40% APY)

Editor’s Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC Select will update as changes are made public.

There’s a good chance you’ve come across the term CD before when shopping for a new savings account. Certificates of deposit — more commonly known as CDs — are another savings vehicle offered by banks and credit unions allowing you to deposit your cash and earn interest over time.

Unlike a traditional or high-yield savings account, however, once you open a CD, you can’t access those funds until the term ends, also known as the maturity date. If you need more of an incentive not to touch your savings, a CD can be a smart move since you’ll get penalized for any early withdrawals. At the end of the term, you receive your original deposit plus the accrued interest you earned.

To determine which CDs are best, CNBC Select analyzed and compared dozens of CD accounts. The ones we selected for our ranking all offer above-average APYs and a range of CD terms to choose from; some banks even offer different types, like a CD where you can raise your APY or a CD where you can withdraw penalty-free. All of the banks on this list are FDIC-insured. (See our methodology for more information on how we chose the best CD accounts.)

Ally Bank offers High Yield CDs, Raise Your Rate CDs (get a higher rate when rates increase), No Penalty CDs (withdraw penalty-free) and IRA CDs (save for retirement). CD term lengths range from three months to five years, and savers can earn up to 5.15% APY. Ally compounds interest daily, and there is no minimum deposit to open an account.

Ally is an online-only bank that offers a range of highly-rated financial products, including everything from checking and savings accounts, to trading platforms, personal loans and mortgage refinancing. The bank has an easy-to-use mobile app and 24/7 live customer service available over the phone, through online chat or on the app.

Barclays offers traditional CDs with term lengths ranging from 12 months to 60 months, and savers can earn up to 5.40% APY. Barclays compounds interest daily, and none of its CDs have a minimum deposit requirement.

Barclays is a brick-and-mortar British bank with online banking available to anyone.

Bread Savings (formerly Comenity Direct) offers traditional CDs with term lengths ranging from one year to five years, and savers can earn up to 5.35% APY. Whereas the other banks on this list have no minimums and no monthly fees, Bread Savings requires a $1,500 minimum opening deposit. There are no monthly maintenance fees.

Bread Savings is an online-only bank and is a product of Comenity Capital Bank, which is part of Bread Financial. Customer service is available over the phone seven days a week, from 7 a.m. to 9 p.m. CT on weekdays and from 9 a.m. to 5 p.m. CT on weekends and most holidays.

Marcus by Goldman Sachs offers High-Yield CDs, Rate Bump CDs (get a higher rate) and No-Penalty CDs (withdraw penalty-free). CD term lengths range from six months to six years, and savers can earn up to 5.30% APY. Marcus by Goldman Sachs has a $500 minimum deposit requirement, but there are no monthly maintenance fees.

Marcus is an online-only division of Goldman Sachs. The bank’s U.S.-based contact center is open 24/7 for live customer support over the phone or through online chat.

Quontic Bank offers traditional CDs with term lengths ranging from six months to five years, and savers can earn up to 5.30% APY. Like Marcus by Goldman Sachs above, Quontic Bank has a $500 minimum deposit requirement. There are no monthly maintenance fees.

Quontic is an online-only bank and a Community Development Financial Institution (CDFI), which supports economically disadvantaged communities nationwide.

Synchrony Bank offers traditional CDs, a Bump-Up CD (get a higher rate), a No-Penalty CD (withdraw penalty-free) and an IRA CD (save for retirement). CD term lengths range from three months to 60 months, and savers can earn up to 5.10% APY.

Synchrony is an online-only bank so there are no physical branch locations. However, all deposit accounts are FDIC-insured and its customer service line is available seven days a week by phone or online chat, as well as 24/7 through its app. In addition to CDs, Synchrony Bank offers high-yield savings and money market accounts, as well as credit cards.

When you put your money in a CD, you earn a fixed interest rate for a specific amount of time on the money you deposit when you open an account. Term lengths range between three months and five years, and usually the longer the term, the higher the interest rate.

While a CD is similar to a savings account, they differ in a couple of very important ways.

1. You can only deposit money into the CD once at the beginning of the term. You can’t make additional contributions over the course of the CD’s term. Sometimes, there’s a minimum deposit requirement (usually $500 and up).
2. You can’t access your money before your term ends or you’ll get hit with an early withdrawal penalty. The penalty fees can vary depending on your bank and your CD’s term length, but it’s usually the interest earned, or the interest that you would have earned, over a certain number of days or months. Generally, the longer the CD term length, the costlier the withdrawal penalty.

Once the CD matures (when the term length is over), savers can get their money back, in addition to the interest earned over time, or they can choose to move the money into a new CD.

One of the reasons you might want to consider a CD over a high-yield savings account is because savings accounts have variable APYs, and with a CD you lock in the rate the day you open the account. This can be a good thing if you open an account when interest rates are high. It’s not so great if you open an account after the Fed slashed interest rates.

CDs typically don’t come with monthly fees and are federally insured so your money is protected, which makes them one of the safest savings vehicles.

Some of the pros and cons of CDs are quite the same, and whether you see something as good or bad depends on other factors. We list what we think below.

Here are some CD pros:

• Fixed interest rates (a good thing when rates are high)
• Can’t touch CD funds until the term is up (a good thing so you’re not tempted to spend)
• Different CD types allow you to have options, such as bump-up CDs (for raising your rate), no-penalty CDs (for easy withdrawals), add-on CDs (for making additional contributions), jumbo CDs (for large deposits) and IRA CDs (for retirement)

And here are some CD cons:

• Fixed interest rates (a bad thing when rates are low or if rates go up while you’re in the middle o a CD term)
• Can’t touch CD funds until the term is up (a bad thing if you really need that money)
• Early withdrawal penalty fees
• Can generally only deposit money into a CD once at the beginning of the term and can’t make additional contributions
• At times there’s a minimum deposit requirement, usually $500 and up

As deposit account rates hover around all-time highs, it’s worth locking in a good APY with a CD. You’re in the right place here as these are some of the best CD rates on the market. As a general rule of thumb, the longer the CD term, the higher the interest rate you can receive.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every CD review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of savings products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best CDs.

To determine which certificates of deposit (CDs) offer the best return on your money, CNBC Select analyzed dozens of CD accounts offered by online and brick-and-mortar banks, including large credit unions. We found that the annual percentage yield (APY) offered by online banks and credit unions far outpaced those offered by most national brick-and-mortar banks. While many credit unions have good CD options, they didn’t make our final list because the majority require a membership that not everyone can qualify for.

When ranking the top CDs, we looked at APYs, term lengths, minimum deposit requirements, penalties for early withdrawals and ease of use. Ultimately, we favored accounts with above-average rates. The national average APY on one-month to 60-month CDs currently ranges from 0.20% to 1.37%, respectively, according to the Federal Deposit Insurance Corporation (FDIC).

All of the CDs included on this list are FDIC-insured up to $250,000 per person. If you are opening a joint account CD with a spouse, the insurance limit is doubled.

The rates and fee structures banks advertise for their CD accounts are not guaranteed forever. They are subject to change without notice and they often fluctuate in accordance with the Fed rate. If you open a CD account, however, you’re often locked into that APY offered at account opening for the entire term length. Your earnings depend on the CD term length, the amount you deposit, the APY offered when you opened the account and any associated fees. Generally, a larger deposit and a higher interest rate will earn you the most money. Any early withdrawals may result in penalty fees that lower your principal balance/earnings.

To open a CD account for the first time at a bank, most banks and institutions require a deposit of new money, meaning you can’t transfer money you already had in an account at that bank.

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Ally Bank is a Member FDIC.