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 will update as changes are made public.
With a certificate of deposit (CD), you're typically locked into a fixed interest rate for months or even years and can't add or withdraw funds until the CD matures.
If that seems restrictive, there are CDs with different options — including the ability to make withdrawals, deposit more money or even enjoy a higher APR after you've opened your account.
Here's what you need to know about the different types of CDs.
1. Traditional CDs
A standard CD offers a fixed interest rate and a set term, typically ranging from three months to five years. In return, you agree to leave the money untouched until the CD reaches maturity or pay a penalty.
At the end of the term, you can cash out or roll over the CD for another term.
Find CDs with competitive rates
2. High-yield CDs
High-yield CDs are just like traditional CDs, but with above-average interest rates. Usually offered by online banks, high-yield CDs offer APYs more than double the national average.
These are our top picks for high-yield CDs, broken down by term
- Best 3-month CD: Synchrony Bank CD
- Best 6-month CD: iGObanking High-Yield iGOcd®
- Best 1-year CD: CFG Community Bank CD
- Best 3-year CD: First National Bank of America CD
- Best 5-year CD: Ally Bank High Yield CD
Synchrony Bank CDs
Annual Percentage Yield (APY)
From 0.25% to 4.00% APY
Terms
From 3 months to 60 months
Minimum balance
None
Monthly fee
None
Early withdrawal penalty fee
There may be an early withdrawal penalty if you withdraw funds from the principal prior to the CD maturity date (the last day of the CD term). The penalty is applied to the amount of principal withdrawn (there's no penalty on interest). For the No-Penalty CD, early withdrawals are not permitted within the first 6 days after account funding. Following that, only withdrawal of the entire balance is allowed.
Terms apply.
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For CD accounts, a penalty may be imposed for early withdrawals. After maturity, if your CD rolls over, you will earn the offered rate of interest for your CD type in effect at that time.
iGObanking High-Yield iGOcd®
Annual Percentage Yield (APY)
From 4.75% to 5.25%
Terms
From 12 months to 15 months
Minimum balance
$1,000 to open and start earning interest
Monthly fee
None
Early withdrawal penalty fee
Early withdrawal penalty depends on the original maturity term. For example, if your account has an original maturity of three months to less than one year, the fee imposed will equal three months simple interest on the amount withdrawn subject to penalty.
Terms apply.
Ally Bank® CDs
Annual Percentage Yield (APY)
From 2.80% to 3.70% APY
Terms
From 3 months to 5 years
Minimum balance
None
Monthly fee
None
Early withdrawal penalty fee
High Yield CDs and Raise Your Rate CDs have early withdrawal penalties that vary based on your CD term. With the No Penalty CD, withdraw all your money any time after the first 6 days following the date you funded the account and keep the interest earned with no penalty.
Terms apply.
3. Jumbo CDs
CNBC Select's top CDs picks have minimum deposit requirements of $1,000 or less. The minimum for a jumbo CD is usually $100,000, though some have a $50,000 minimum.
Jumbo CDs historically offered better returns, but today many banks offer the same (or even higher) rates on regular CDs. Be sure to shop around and compare your options.
4. Bump-up CD
With a traditional CD, savers are locked into a fixed rate until maturity. With a bump-up CD, however, if your bank raises interest rates, you can request the higher rate during your term.
Most banks only allow you to opt into a rate increase once per bump-up CD term. Make sure to compare the bump-up CDs' starting APY to the bank's traditional CDs' APY. If it's lower, you may end up just bumping the APY to the traditional CD rate later.
Step-up CDs are similar to bump-up CDs, except the bank automatically raises your interest rate to the new, higher yield at specific times during your loan term.
5. Add-on CD
With a traditional CD, you can only deposit a lump sum at opening. Add-on CDs allow you to make additional deposits throughout the term.
Most banks restrict how many additional deposits you can make, based on the term. Make sure you know your limit before opening an add-on CD.
6. No-penalty CD
If you're worried about not being able to have access to your savings, a no-penalty CD enables you to withdraw money before your CD reaches maturity without paying the usual penalty. (Most banks require funds to remain untouched for at least seven days before you can withdraw penalty-free.)
In exchange for this flexibility, no-penalty CDs usually have lower interest rates. If you really think you'll need access to your cash, you're better off putting it into a high-yield savings account.
7. Brokered CD
Rather than banks or credit unions, brokered CDs are sold through brokerage firms and offer higher rates and longer terms. You can sell them on the secondary market before their maturity date, which makes them more liquid than standard CDs. It also means you could lose money if you have to sell for less than your original investment. Older CDs are less valuable to other investors when rates increase.
8. IRA CD
An IRA CD is a retirement savings account that holds one or more certificates of deposit, combining the safety of a CD with the tax advantages of an IRA. Because of its low risk, it's preferred by savers near or in retirement looking for predictable returns without market volatility.
However, early withdrawal could result in paying two penalties.
Compare offers to find the right savings account
FAQs
Can I withdraw money from a CD?
Many banks won't let you withdraw just a portion of the funds in a traditional CD. You have to cash out the entire balance and close the account, incurring the early withdrawal penalty.
Are there CDs that don't charge an early withdrawal fee?
You can make no-fee withdrawals before maturity with a no-penalty CD. There is usually a mandatory waiting period before you can access funds, and a limit on the number of withdrawals you can make.
What is a CD ladder?
A CD ladder is a strategy that involves opening several CDs at once with staggered term lengths. As each account matures, you reinvest those funds into a new long-term CD. That approach provides penalty-free access to some of your savings in an emergency and also lets you take advantage of higher returns if rates start to rise.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every CD list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking and 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.
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