Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.
As of February 2023, the national average APY (Annual Percentage Yield) on a 6-month CD is 0.81% APY. However, some of the best online banks offer up to 4.39% APY for a 6-month CD right now.
A 6-month CD is a short-term CD that lets you maintain a fixed interest rate for a short period of time. It may be a good option if you’re not comfortable parting with your money for more than six months. Here are our top picks for 6-month CDs.
Annual Percentage Yield (APY)
4.15%
Minimum Deposit Amount
$1,000
Annual Percentage Yield (APY)
4.15%
Minimum Deposit Amount
$1,000
on CIT Bank’s secure site. Member FDIC.
CIT Bank 6 Month Term CD
Details
Annual Percentage Yield (APY)
4.15%
Minimum Deposit Amount
$1,000
6-Month CD Rates at the Largest US Banks
If you prioritize banking with a company you’re familiar with, here are the rates you’ll earn on a 6-month CD with some of the most popular institutions:
Compare our top picks for 6-month CDs
Competitive interest rate
Editor’s rating
Competitive interest rate
Editor’s rating
Competitive interest rate
Editor’s rating
Competitive interest rate
Editor’s rating
Competitive interest rate
Editor’s rating
Low minimum opening deposit
Editor’s rating
Low minimum opening deposit
Editor’s rating
Learn more
On First Internet Bank of Indiana’s website
Learn more
on CIT Bank’s secure site. Member FDIC.
Learn more
On Bethpage Federal Credit Union’s website
First Internet Bank of Indiana CD
Annual Percentage Yield (APY)
2.02% to 4.75%
Minimum Deposit Amount
$1,000
First Internet Bank of Indiana CD
Annual Percentage Yield (APY)
2.02% to 4.75%
Minimum Deposit Amount
$1,000
On First Internet Bank of Indiana’s website
First Internet Bank of Indiana CD
Details
Annual Percentage Yield (APY)
2.02% to 4.75%
Minimum Deposit Amount
$1,000
Why it stands out: First Internet Bank of Indiana pays a good rate for 6-month CDs, and contrary to what the bank’s name may lead you to believe, this online bank is available to residents of all US states.
Interest for 6-month CD: 4.39% APY
6-month CD early withdrawal penalty: 180 days interest
What to look out for: First Internet Bank of Indiana compounds your interest monthly, not daily. Depending on how much money is in your CD, this may or may not make a significant difference. You can also find a bank that charges less for an early withdrawal from a 6-month CD.
Annual Percentage Yield (APY)
2.00% to 4.60%
Minimum Deposit Amount
$2,500
Annual Percentage Yield (APY)
2.00% to 4.60%
Minimum Deposit Amount
$2,500
On Live Oak Bank’s website
Live Oak Bank CD
Details
Annual Percentage Yield (APY)
2.00% to 4.60%
Minimum Deposit Amount
$2,500
Why it stands out: Live Oak Bank is an online bank with a savings account and CDs. Most Live Oak Bank CDs offer 2.00% APY, but its 6-month CD notably pays 4.35% APY.
Interest for 6-month CD: 4.35% APY
6-month CD early withdrawal penalty: 90 days interest
What to look out for: Live Oak Bank CDs require a minimum of $2,500. Other financial institutions on our list let you open a CD with less money upfront.
Annual Percentage Yield (APY)
4.10% to 4.45%
Minimum Deposit Amount
$1,000
Annual Percentage Yield (APY)
4.10% to 4.45%
Minimum Deposit Amount
$1,000
Bask Bank CD
Details
Annual Percentage Yield (APY)
4.10% to 4.45%
Minimum Deposit Amount
$1,000
Why it stands out: Bask Bank offers a high interest rate on a 6-month CD.
Interest for 6-month CD: 4.30% APY
6-month CD early withdrawal penalty: 90 days simple interest
What to look out for: Bask Bank has limited CD terms. If you’re looking to open a CD with a term over 2 years, you might prefer another institution.
Annual Percentage Yield (APY)
4.00% to 4.35%
Minimum Deposit Amount
$1,000
Annual Percentage Yield (APY)
4.00% to 4.35%
Minimum Deposit Amount
$1,000
TAB Bank CD
Details
Annual Percentage Yield (APY)
4.00% to 4.35%
Minimum Deposit Amount
$1,000
Why it stands out: TAB Bank is a good choice if you’re searching for an online bank with competitive interest rates on a savings account or short-term CDs.
Interest for 6-month CD: 4.25% APY
6-month CD early withdrawal penalty: 90 days interest
What to look out for: TAB Bank doesn’t have an ATM network. If this is a priority for you, you might prefer another financial institution.
Annual Percentage Yield (APY)
0.30% to 4.65%
Minimum Deposit Amount
$1,000
Annual Percentage Yield (APY)
0.30% to 4.65%
Minimum Deposit Amount
$1,000
CIT Bank Term CD
Details
Annual Percentage Yield (APY)
0.30% to 4.65%
Minimum Deposit Amount
$1,000
Why it stands out: CIT Bank is an online-only financial institution with a variety of bank accounts. Its 6-month CD term pays a high interest rate and has standard early withdrawal penalties.
Interest for 6-month CD: 4.15% APY
6-month CD early withdrawal penalty: 90 days of interest
What to look out for: Other online banks may have lower minimum opening deposit requirements.
Bethpage Federal Credit Union Certificate Account
Annual Percentage Yield (APY)
2.25% to 4.50%
Minimum Deposit Amount
$50
Bethpage Federal Credit Union Certificate Account
Annual Percentage Yield (APY)
2.25% to 4.50%
Minimum Deposit Amount
$50
On Bethpage Federal Credit Union’s website
Bethpage Federal Credit Union Certificate Account
Details
Annual Percentage Yield (APY)
2.25% to 4.50%
Minimum Deposit Amount
$50
Why it stands out: Bethpage Federal Credit Union could be worthwhile if you prefer banking with a credit union instead of a bank.
Bethpage Federal Credit Union has a variety of CD terms, and you’ll only need a minimum of $50 to get a CD.
Interest for 6-month CD: 4.00% APY
6-month CD early withdrawal penalty: 90 days of interest
What to look out for: Credit unions require membership to open accounts. To join Bethpage FCU, you just need to open a Bethpage Federal Credit Union Savings Account account with $5.
Annual Percentage Yield (APY)
2.25% to 4.60%
Minimum Deposit Amount
$0
Annual Percentage Yield (APY)
2.25% to 4.60%
Minimum Deposit Amount
$0
Synchrony CD
Details
Annual Percentage Yield (APY)
2.25% to 4.60%
Minimum Deposit Amount
$0
Why it stands out: Synchrony CDs have a low minimum opening deposit. Usually, banks and credit unions require at least $1,000 to open a CD.
Interest for 6-month CD: 3.90% APY
6-month CD early withdrawal penalty: 90 days of interest
What to look out for: You’ll want to consider whether you have a preference on how you’ll withdraw money from a CD. At Synchrony, you can’t do this online; you must call customer service to cash out your CD.
Other CDs That Didn’t Make the Cut and Why
- Signature Federal Credit Union Certificate: Signature Federal Credit Union pays solid interest rates, but our top picks have higher interest rates right now.
- Rising Bank CD: Rising Bank pays solid interest rates on CDs, but our top picks have higher interest rates right now.
- Sallie Mae CD: Sallie Mae has a high interest rate, but you’ll need a minimum opening deposit of $2,500.
- Marcus by Goldman Sachs High-Yield CD: Marcus lets you open an account with $500, but our top picks have higher interest rates right now.
- Bank5 Connect High-Yield CD: Bank5 Connect has a low minimum opening deposit, but other institutions on our list offer higher interest rates on 6-month CDs right now.
- Ally High Yield CD: Ally offers a variety of CDs, but our top picks pay higher interest rates.
- Capital One 360 CD: Capital One has a low minimum opening deposit, but our top picks pay higher interest rates.
- Nationwide CD: Nationwide CDs has a solid 12-month CD, but its 6-month CD isn’t as strong.
- Quontic Certificate of Deposit: Quontic has a good interest rate on its 6-month CD, but our top picks have lower early withdrawal penalties or pay higher interest rates.
- TIAA Basic CD: TIAA Bank’s 6-month CD isn’t as strong as its long-term CDs.
- Citi Fixed Rate CD: Citi pays has good rates, but our top picks have even higher interest rates.
- Navy Federal Credit Union Standard Certificate: Navy Federal Credit Union has solid interest rates on long-term CDs, but its short-term CDs aren’t as competitive.
- NBKC CD: NBKC offers competitive interest rates on long-term CDs, but its short-term CDs aren’t as strong.
- Discover CD: Discover has competitive interest rates on long-term CDs, but its short-term CDs aren’t as strong. You’ll also need at least $2,500 to get a CD.
- Pentagon Federal Credit Union Money Market Certificate: Pentagon Federal Credit Union offers a competitive interest rate, but the early withdrawal penalties are high compared to our top picks.
- Popular Direct CD: Popular Direct has great interest rates on CDs, but you’ll also need at least $10,000 to open a CD.
- Charles Schwab Bank CD: Charles Schwab has brokered CDs, meaning Charles Schwab doesn’t actually own the CD. Instead, Charles Schwab acts as the middleman for you and the bank that owns the CD. Depending on how your bank, you may prefer open a CD directly with the financial institution.
- American Express CD: American Express offers a good interest rate, but our top picks offer even higher rates.
- BMO Harris CD: BMO Harris requires a minimum opening deposit between $1,000 to 5,000 to open a CD.
Bank Trustworthiness and BBB Ratings
We’ve compared each financial institution’s Better Business Bureau score. The BBB grades businesses based on factors like responses to customer complaints, honesty in advertising, and transparency about business practices.
Here is each company’s score:
Bask Bank received a D- rating from the BBB because it’s received 13 customer complaints on the BBB website and it hasn’t responded to one customer complaint. However, its parent company, Texas Capital Bank, has an A+ rating from the BBB.
CIT Bank has an A- rating from the BBB because it has failed to respond to a customer complaint. Live Oak Bank has an A- rating because it has 3 complaints filed against the bank. TAB Bank currently has an A- rating due to government action taken against the bank.
BBB ratings aren’t necessarily the be-all and end-all. To see if a company is right for you, you may also read online customer reviews or talk to current customers.
TAB Bank and Live Oak Bank have both been involved in recent public controversies.
In 2022, TAB Bank agreed to stop making Iowa Loans after entering an Assurance of Discontinuance with the State of Iowa. The State accused TAB Bank of violating the Iowa Consumer Credit Union and charging significant fees to Iowa residents.
In 2021, Live Oak Bank and digital banking platform Apiture agreed to pay $4.65 million in a settlement that accused Live Oak Bank, Apiture, and nCino of having an agreement where they would not hire employees from other companies in Wilmington, North Carolina so the three banking companies could avoid offering competitive salaries.
Why Trust Our Recommendations?
Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don’t have to.
Frequently Asked Questions
With a 6-month CD, you stash away your money for six months and typically earn a fixed rate. You have the option to renew your CD at the end of the 6-month period, or close the account and pocket the money.
If you don’t need immediate access to your savings, a CD can guarantee a return on your money since you lock in a fixed APY for the term of the CD.
With most institutions, you typically won’t be able to deposit more money or access your funds before the CD matures without paying a penalty.
Most CDs lock in your rate for the entire term. If you open a 6-month CD at a 4.15% APY, you’ll earn 4.15% for the entire six months. If you renew your CD after it matures, you’ll earn the new rate available in six months.
There are exceptions to the fixed-rate rule. Some institutions offer variable-rate CDs or CDs that allow your rate to change after a predetermined amount of time.
CDs with 1-year and 5-year terms pay higher rates than ones with 6-month terms. You may prefer longer terms than six months to earn better interest rates.
Ultimately, your choice will likely depend on how soon you plan to need the money. For example, if you want the money to buy a house in less than a year, a longer term isn’t the best idea.
Going for a shorter term also gives you the opportunity to snag a better APY if rates are up in a year. With a 1-year or 5-year CD, you could miss out on higher rates. But on the other hand, you could avoid lower rates with a 1-year or 5-year term if rates drop later.
Many experts recommend CD laddering. With this strategy, you open multiple CDs with different term lengths so you can take advantage of higher rates with longer terms, but also access some of your money earlier. For instance, you might open 6-month, 1-year, and 5-year CDs at the same time, which means you’ll get some of your money back in six months, then more in a year, then more in five years.
The choice between a 6-month CD and high-yield savings account will depend on several factors.
First, some institutions pay higher rates on high-yield savings accounts than on 6-month CDs. This isn’t always the case, though, so be sure to double-check.
A CD also locks in your rate for the entire term. If rates are dropping, this could make the CD a better choice, because your savings account APY could decrease over the next few months. If rates are rising, the savings account might be a better fit, because your rate could go up. Either way, there’s a good chance rates will fluctuate over a 6-month period.
It also depends on when you’ll need to access your money. You should be able to access funds from your savings account regularly — but you’ll have to pay a fee if you need access to money from your 6-month CD before it matures. You can also continuously add money to your savings account, whereas most CDs block you from making additional deposits after opening the account.
Like with a high-yield savings account, you may prefer a money market account over a CD if you want quick access to your money. Money market account rates also fluctuate, so you may prefer a money market account if rates are rising, but a CD if rates are dropping. Still, remember that rates will likely go up or down over a 6-month term.
Many banks require higher deposits for money market accounts than CDs, which could affect your decision. It’s also good to remember that you can add more funds to your money market account over time, while a CD only allows an opening deposit.
CDs aren’t generally considered investments the same way something like an index fund, which puts your money into the stock market, is. Instead, a CD is typically viewed as a type of savings account, and your potential for losses and gains — your risk — is much more limited. Because the stock market is risky, experts generally don’t advise investing money you’ll need in the next five years. In the case of a stock market drop, you wouldn’t have time to make up your losses.
If you need to access your money in six months and want a guaranteed rate of return, a 6-month CD is a better choice than a different type of investment account.
If you’re comfortable parting with your money for longer and want to take more risk with your money, then you may want to invest in the stock market. One way to do this is through tax-advantaged retirement accounts, like a 401(k) or IRA, which grows your money over decades. Another is through brokerage accounts, which are useful tools to build long-term wealth, but can’t guarantee a given return like a CD can.
There is such a thing as an IRA CD, which is a sort of combo savings/investment account. It’s a safe investment tool that may be a worthwhile option for people who are close to retirement age.
Expert Advice on Choosing the Best CD
To learn more about what makes a good CD and how to choose the best fit, Insider consulted four experts:
Insider
Here’s what they had to say about CDs. (Some text may be lightly edited for clarity.)
How can someone determine whether a bank is the right fit for them?
Tania Brown, certified financial planner at SaverLife:
“Obviously, you want to make sure it’s FDIC insured. Also, your banking experience — do you like walking into a bank? Well, then you need someone local. Do you just not care if you ever see your bank? Then you’re okay online. Do you write checks? Do you not write checks? So it’s thinking through how your experience with it is going to be before you make that decision.”
Sophia Acevedo, certified educator in personal finance, banking reporter, Personal Finance Insider:
“I would create a list of what I prioritize most in a bank account. For example, some banks have accounts that charge monthly service fees. I would look to see what the requirements are for waiving the monthly service fee and whether I think I could feasibly meet those requirements each month. If I’m searching for an interest-earning bank account I’ll pay attention to interest rates. I would make sure the account pays a higher interest rate than the average bank account.”
How should someone choose a CD term length?
Roger Ma, certified financial planner with lifelaidout® and author of “Work Your Money, Not Your Life”:
“I would think about when you need the money and then compare that with what the prevailing CD rates are, and then what makes sense from a financial perspective, but also from your own personal timing perspective.”
Mykail James, MBA, certified financial education instructor, BoujieBudgets.com:
“I believe in having a plan for whatever the funds are. If it’s supposed to be a house fund, and you want to wait for another two years to buy a house, that’s what you should be thinking of when you want to have this money.”
How should someone decide whether to put their money in a high-yield savings account, money market account, or CD?
Tania Brown, CFP:
“So I guess we’ll start off with how much money you want to put in and … the level of transactions you want to have. If you want to have any transactions, that automatically takes out CDs. Then you’re stuck between the high-yield savings and the money market account.”
Sophia Acevedo, Personal Finance Insider:
“Generally, I think a high-yield savings account or money market account could be good options for an emergency fund or short-term savings goals. A high-yield savings account offers a higher interest rate than traditional savings accounts at brick-and-mortar banks. Meanwhile, money market accounts might be worth considering if you want more account accessibility — several offer paper checks, ATM cards, or debit cards. CDs could be worthwhile if you don’t need access to some of your money, since they have a fixed interest rate for a specific term.”
Top Offers From Our Partners
Source link: https://www.businessinsider.com/personal-finance/best-6-month-cd-rates
