The Best 18-Month CDs Have Similar Rates to One-Year CDs. How to Decide if They’re Worth It

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Figuring out where to keep your savings is often a balance between the best return and your ability to access your money whenever you need it. 

An 18-month CD can make for a solid savings vehicle for goals coming up within the next two years — such as money you want to use for a wedding or a down payment on a home — especially if you don’t want to be tempted to touch the money. 

Right now, 18-month CDs offer rates on par with high-yield savings accounts and are going up as federal rates increase. But they’re near the top end of terms that experts recommend right now: locking in a long-term CD as rates rise could mean losing out on higher interest rates to come. Shorter-term CDs and high-yield savings accounts can help you maintain some flexibility while taking advantage of great interest rates.

Here are the best 18-month CD rates right now and what else to keep in mind as CD rates continue to rise: 

Best CD Rates for November 2022

Bank1.5 year apyMinium Deposit
CFG4.60%$500
Sallie Mae4.35%$2500
Synchrony Bank4.25%$0
Goldman Sachs Bank USA4.15%$500
Ally Bank4.10%$0
Capital One4.05%$0
Discover Bank4.05%$2500
Barclays Bank4.05%$0
TIAA Bank4.05%$1,000
Live Oak Bank2.00%$2500
American Express National Bank1.00%$0

Note: The APYs (Annual Percentage Yield) shown are as of November 28, 2022. The APYs for some products may vary by region.

18-Month CD Pros and Cons 

CDs are low-risk savings options with competitive rates that can add a big boost to your savings. But with restrictions like fixed interest, no option to make contributions, and withdrawal penalties, they’re not the best choice for everyone. Here are a few pros and cons to consider before you lock in an 18-month CD today: 

Pros

  • Guaranteed return

  • Access your money quicker than longer-term CDs

  • FDIC or NCUA insured deposit

  • Fixed interest rate is a benefit when interest rates are falling

Cons

  • Withdrawal penalty if you take out money before your CD matures

  • Less flexibility compared to shorter-term CDs, high-yield savings or money market accounts

  • Fixed interest could mean missing out on future higher rates in a rising rate environment

  • Cannot contribute more after making your initial deposit

Should I Choose an 18-Month CD?

With interest rates expected to continue getting better in the near future, deciding to open any CD today can be tricky. But there are benefits to 18-month CDs that can make them worthwhile.

An 18-month CD may be a good savings option for money you know you won’t need for a year and a half and want to guarantee you don’t spend elsewhere before then. For example, say you’re planning a once-in-a-lifetime international trip, or you want to make some planned home renovations. 

Interest rates may go up in the time your money is locked away in an 18-month CD, but if you’re more concerned about keeping your money safe and earning a guaranteed return than getting the biggest potential payout you can, that’s not as much of an issue.

Regardless of which savings option you choose, saving is critical right now, with rising, inflated prices combined with higher interest rates. And you may have different account types for different financial goals, whether it’s a lower-earning but flexible money market account or a CD that requires locking in your money but earns a slightly higher APY. 

“Trying to chase the yield” probably isn’t the most beneficial use of your time or money, considering that most banks are offering similar rates right now, says Kimberly Howard, a certified financial planner and founder of KJH Financial Services, a financial planning firm in Massachusetts and Colorado.

Before opening a CD, think about your financial needs and compare other savings options in case you’re likely to need the money before your CD matures. If there’s a chance you’ll the savings, consider other flexible options such as a high-yield savings account or money market account

18-Month CDs Compared to 6-Month and 1-Year CDs 

Short-term CDs are better than long when rates are rising, and 18 months is likely near the top end of any CD term you should consider today. Experts we’ve spoken with don’t recommend CDs longer than 18 months to two years right now

In fact, six-month to one-year CDs are the sweet spot right now, Marty O’Leary, a certified financial planner and founder of Stadium Financial, a financial planning firm in Lake Murray, Florida recently told NextAdvisor. The shorter time commitment gives you more flexibility to take advantage of elevated rates right now, but still have the chance to move your money to another savings option in a few months, when rates are expected to be even better.

Here’s how six-month and one-year CDs compare to the 18-month CD term: 

6-Month CDs 

Six-month CDs may be good if you have a short-term goal, like saving for an upcoming vacation. But right now, six-month CD rates are comparable (or in some cases even less) than what you’ll earn with a high-yield savings account, which also has added liquidity so you can access your money in case of emergencies or unforeseen expenses. 

In this case, an 18-month CD will give you a higher return, but just remember you’ll have to commit to a long time without access to your deposit.

1-Year CDs

One-year CDs are a solid short-term savings option, with only a marginal difference in rates compared to 18-month terms.

“I don’t know that 18-month CDs are giving much more of a yield than one-year CDs right now,” says Howard. Currently, there are multiple banks with CDs offering over 4% on either term. 

If you’re earning a similar yield from a one-year CD as you would with an 18-month CD, it may be best to choose the shorter term to have access to your money sooner. 

How to Open an 18-Month CD 

You can open a CD directly with the bank you choose. If you choose a national or local bank brand, you may be able to go directly into a branch to open the account, but most online banks and credit unions offer better rates. 

Look out for any fees and minimum deposit requirements before you decide which bank to open your CD with. Pay close attention to withdrawal penalties and promotional rates that could change after a given timeframe. 

When you’re ready to open a CD, you’ll need your personal information and a way to transfer your one-time deposit. Most online banks don’t allow cash or check deposits for CDs, and instead will request electronic transfers from another account. 

18-Month CD FAQs