- Guaranteed rate of return.
- FDIC or NCUA insured up to legal limits.
- The fixed interest rate protects you against rate drops over time.
Our evaluations and opinions are not influenced by our advertising relationships, but we may earn a commission from our partners’ links. This content is created independently from TIME’s editorial staff. Learn more about it.
Certificates of deposit (CDs) are offering their highest returns in years right now, with banks and credit unions rewarding customers with high APYs in exchange for leaving deposits untouched for a specified period of time. The upshot is more generous rates than you would normally find in a savings account.
Five-year CDs are considered long-term CDs. They are best suited for individuals who have money they don’t need to access for several years and want guaranteed returns. Here's a look at the best five-year CDs available right now.
Best 5-year CD rates today
| Title | APY* | Min. deposit | Early withdrawal penalty |
|---|---|---|---|
BMO Alto 5-Year CD | 4.60% | $0 | 180 days interest |
First Internet Bank 5-Year CD | 4.59% | $1,000 | 360 days interest |
Popular Direct 5-Year CD | 4.45% | $10,000 | Up to 730 days interest |
Quontic 5-Year CD | 4.30% | $500 | Two years interest |
Bread Savings 5-Year CD | 4.15% | $1,500 | 365 days interest |
Marcus 5-Year CD | 4.10% | $500 | 180 days interest |
Alliant Credit Union 5-Year CD | 4.00% | $1,000 | Up to 180 days interest |
Capital One 5-Year CD | 4.00% | $0 | Six months interest |
Ally Bank 5-Year CD | 3.90% | $0 | 150 days interest |
Discover 5-Year CD | 3.90% | $2,500 | 18 months interest |
Barclays 5-Year CD | 3.75% | $0 | 180 days interest |
Our recommendations
BMO Alto
BMO Alto 5-Year CD
BMO Alto 5-Year CD
APY*
4.60%
Min. deposit
$0
Early withdrawal penalty fees
180 days interest
The best CD rates are often offered by smaller banks and credit unions you’ve never heard of. Not in this case. BMO Alto offers market-leading returns on its CDs and is part of BMO Financial Group, one of the largest banks in North America. The online-only division of BMO offers six CDs with APYs ranging from 5.50% to 4.60%. Its rates are highly competitive, and there is $0 minimum opening deposit requirement. One potential drawback is that BMO Alto doesn’t have a mobile app. You can't receive help with your Alto accounts at a BMO branch, either.
First Internet Bank
First Internet Bank 5-Year CD
First Internet Bank 5-Year CD
APY*
4.59%
Min. deposit
$1,000
Early withdrawal penalty fees
360 days interest
First Internet Bank is a top choice for high-yield interest CDs. You can open a CD with as little as $1,000, and the online bank offers competitive rates on all of its CD offerings, including its five-year CD. The early withdrawal penalty on this particular account is 360 days interest. That’s not unusual for a five-year CD, but you can find less severe penalties elsewhere.
Popular Direct
Popular Direct 5-Year CD
Popular Direct 5-Year CD
APY*
4.45%
Min. deposit
$10,000
Early withdrawal penalty fees
Up to 730 days interest
Popular Direct, a subsidiary of Popular Bank, offers one of the most competitive five-year CD APYs on the market and a large overall selection of CDs. Terms range from three months to five years. Unfortunately, there is a rather high $10,000 minimum deposit requirement.
Quontic Bank
Quontic 5-Year CD
Quontic 5-Year CD
APY*
4.30%
Min. deposit
$500
Early withdrawal penalty fees
Two years interest
Quontic Bank offers a variety of deposit accounts at attractive rates, including CDs with terms of six months, two years, three years, and five years. The online bank's five-year CD is actually its lowest CD rate, but it's still competitive. You can open a Quontic CD with a $500 minimum deposit.
Bread Savings
Bread Savings 5-Year CD
Bread Savings 5-Year CD
APY*
4.15%
Min. deposit
$1,500
Early withdrawal penalty fees
365 days interest
Bread Savings pays a respectable APY of 4.15%* on its five-year CD. You can also earn high rates on its other CD terms, which range from one to five years. You'll need a $1,500 minimum deposit to open a CD with Bread Savings. The online bank is also a great spot to open a high-yield savings account (HYSA).
Marcus
Marcus 5-Year CD
Marcus 5-Year CD
APY*
4.10%
Min. deposit
$500
Early withdrawal penalty fees
180 days interest
Marcus by Goldman Sachs is another online bank offering high-yield CDs. Its five-year CD requires a $500 minimum balance and pays an APY of 4.10%. Marcus also offers a 10-day guarantee. If the CD rate increases during the first 10 days from account opening and funding, you'll receive the higher rate.
Alliant Credit Union
Alliant Credit Union 5-Year CD
Alliant Credit Union 5-Year CD
APY*
4.00%
Min. deposit
$1,000
Early withdrawal penalty fees
Up to 180 days interest
Alliant Credit Union is a regular on our best CD rates lists. The online credit union offers competitive rates, and its five-year CD is no exception. You must be a member to open an account, however, which requires working for an eligible employer, living in certain parts of Illinois, joining Foster Care to Success, or being closely related to a current member. You also need a $1,000 minimum deposit to open a CD through Alliant Credit Union.
Capital One
Capital One 5-Year CD
Capital One 5-Year CD
APY*
4.00%
Min. deposit
$0
Early withdrawal penalty fees
Six months interest
Unlike Alliant, Capital One doesn't require a minimum balance to open a CD. The online bank offers several CD terms ranging from six months to five years. With an APY of 4.00%*, its five-year CD is competitive. Interest on Capital One CDs accrues daily and is compounded monthly.
Ally Bank
Ally Bank 5-Year CD
Ally Bank 5-Year CD
APY*
3.90%
Min. deposit
$0
Early withdrawal penalty fees
150 days interest
Ally Bank is known for its competitive rates on deposit products, which extends to its CDs. Its five-year CD stands out because there's no minimum deposit requirement. Ally also offers raise-your-rate and no-penalty CDs, along with a host of other banking and financial products and services.
Discover
Discover 5-Year CD
Discover 5-Year CD
APY*
3.90%
Min. deposit
$2,500
Early withdrawal penalty fees
18 months interest
Discover offers more than just credit cards. Among its product lineup are 12 CDs, with terms ranging from three months to ten years. To open Discover’s 5-Year CD, you’ll need a $2,500 minimum deposit. Interest compounds daily and is credited monthly.
Barclays
Barclays 5-Year CD
Barclays 5-Year CD
APY*
3.75%
Min. deposit
$0
Early withdrawal penalty fees
180 days interest
Barclays’ five-year CD is currently the lowest APY on our list, but it doesn't require a minimum balance to open. Interest earned on the account compounds daily and is credited monthly. The online bank offers six CDs in total with terms ranging from 12 months to five years.
Methodology
To determine the best five-year CDs, we employed a comprehensive approach. Firstly, we compared interest rates across various banks and credit unions, prioritizing those offering the highest APY for our chosen term.
In addition to rates, we considered other factors, such as:
- Deposit requirements.
- Early withdrawal penalties.
- Account features.
- Insurance coverage.
- Renewal options.
- Grace periods.
- Compounding schedules.
- Customer service.
- Reputation of the financial institution.
We also considered ease of use and the process for opening an account, giving preference to CD accounts that could be opened online.
Pros and cons of a 5-year CD
Pros:
Cons:
- Your money is locked in.
- Higher withdrawal penalties than shorter CD terms.
- Less liquid than a savings account.
- Interest rates may increase during your CD term.
What happens if you take your money out early?
CDs offer less accessibility than other deposit accounts. By opening a CD, you agree to leave your funds untouched for a predetermined period of time. Because of this inconvenience, banks and credit unions typically offer higher rates on CDs than other savings accounts.
If you decide to withdraw funds early, you’ll be charged a fee called an early withdrawal penalty. While policies vary among institutions, the penalty amount typically depends on how long the CD's term is. If your CD term is longer, the penalty for taking your money out early will be higher.
Alternatives to 5-year CDs
Five-year CDs aren't the only option for maximizing the interest on your savings. Consider the following alternatives to a long-term CD.
High-yield savings accounts
Many online banks offer high-yield savings accounts (HYSAs), which work just like traditional savings accounts at your local bank but with higher APYs. Plus, HYSAs generally come with no monthly fees and other perks.
Money market accounts
Money market accounts are less common than other types of deposit accounts but typically earn competitive rates. These hybrid accounts earn high yields and often come with checking benefits like a checkbook or ATM card.
Dividend stocks
Investing in companies that pay a portion of their profits to shareholders has the potential to yield much higher returns than a CD. However, dividend stocks, unlike CDs, are not guaranteed, so you could end up losing money. Learn more about how dividend stocks work.
Short-term CDs
Five years is a long time to leave money in the bank untouched, especially if rates increase over that time. Consider opening a short-term CD if you suspect rates will rise or you need access to your money sooner.
TIME Stamp: Use 5-Year CDs to earn interest on funds you don't need to access for a long time
If you have extra funds you don't need to access for a while but you don’t want to risk your principal investment, consider a five-year CD. These accounts offer guaranteed returns through fixed high-yield interest rates. Typically, the highest rates are available through online banks or credit unions but always check traditional banks and other financial institutions to ensure you're getting the best deal.
The information presented here is created independently from the TIME editorial staff. To learn more, see our About page.