8 Places You Can Get A 5% Guaranteed — Or More — On CDs Or Savings Accounts Right Now

The Average One-year certificate of deposit pays only 1.28% APY. But thanks to rising interest rates, some financial institutions are offering far more – about four times as much. “Online-only banks and credit unions continue to hike rates on certificates of deposit, especially since the Federal Reserve raised the federal funds rate seven times in 2022,” Nerdwallet’s Spencer Tierney wrote in a recent article report on historical CD courses. Check out the highest CD prices you can get right now here.

Ted Rossman, a senior industry analyst at Bankrate, says that while other savings vehicles can also deliver competitive APY – such as high-yield savings accounts, some of which also pay over 4.5% — Those interested in short-term investment gains can now earn more on high-yield CDs than they have in recent years. “The advantage of CDs is that the rate is guaranteed,” Rossman says, adding that the best use case for someone in the short-term CD market is probably a “retiree looking for low risk with a fixed income.”

Why are CD prices so high now?

The Fed raised interest rates again in February, making a total of eight consecutive rate hikes since last March. Today that number is between 4.50% and 4.75%. For CDs, this change is significant – as rising interest rates have a direct impact on the overall cost of borrowing, and financial institutions typically change their interest rates to attract new deposits and stay competitive.

In addition, the trend of rising interest rates is expected to continue: According to Rossman, current market conditions and unemployment figures – which are now at a 54-year low – suggest that the Fed is unlikely to hike rates yet this year, demonstrating the potential increased for further incentives to save. “It looks like the Fed is going to keep rates up or up all year, so there’s a little bit of upside,” Rossman says.

CDs with the highest APY

The following banks and credit unions offer CDs and Jumbo CDs with 5% APY or higher. Just make sure to read the fine print.

Mountain America Credit Union: 5.25% – 5.35% APY for 12 month CDs

Meet the minimum balance requirement of $500 on a 12-month CD and earn 5.25% APY. For youth accounts – designed for children and young adults – the rate is even higher. For these, there is only a $5 minimum account opening and balance requirement to earn 5.35% APY. With this higher rate comes some additional restrictions: Annual deposit limit is $10,000 up to the age of 27 with a maximum of $100,000 per account. This is where prepayment penalties and fees apply.

SELCO Community Credit Union: 5.25% – 5.5% APY for 9 month CDs

Balance requirements are everything for SELCO’s Accelerator CD series. To qualify for the 5.25% APY rate associated with the 9-month Accelerator CD, you must have a balance of $25,000 to $99,999 in new funds. For an even higher rate of 5.5% with the credit union’s Jumbo Accelerator CD, you need an opening balance of $100,000 or more. If the rate increases on either CD within the first 30 days, SELCO adjusts accordingly.

Allin credit union: 5% – 5.05% APY on 60 month CDs

With a minimum deposit of just $1,000, Allin Credit Union’s Standard CD Set offers a 5% fixed interest rate on 60-month certificates. The jumbo version, which requires a minimum deposit of $100,000, comes with an even higher APY rate of 5.05%.

capital one: 5% APY for 11-month CDs

Capital One’s 360 CD is pretty dry. Secure by March 14th and guarantee 5% APY on the bank’s 11-month CD. There are no minimum balance requirements and you have the choice of when you want to pay out monthly, annually or at the end of the term.

BMO Harris: 5% APY for 12-month CDs

Meet the minimum deposit requirement of $1,000 and claim your 5% APY on BMO 12 Month CDs. The only catch here is that this rate isn’t available to residents of Arizona, Illinois, Indiana, Kansas, Minnesota, Missouri, or Wisconsin.

Sallie Mae Bank: 5% APY on 27-month CD

All that is required here is the minimum opening balance of $1 to open an account. Just make sure your CD stays active for the full 27-month period, which automatically renews at the end of the term to avoid a 180-day simple interest penalty for early withdrawal.

UmbrellaBank.com: 5% on 12-month CD

A minimum account of $1,000 is required to open a 12-month CD with Umbrella Bank. If you’re new to the bank and not planning on depositing more than $1 million, this might be for you. Just make sure you want to keep this for the entire term to avoid unwanted early withdrawal fees.

CFG bank: 5% APY on 12-month CD

Bring $500 to the table – in person at any of the Maryland offices or online – and keep that balance to earn 5% APY with this CD from CFG Bank. No additional deposits are required to claim this competitive price, however prices are subject to change as per the fine print.

Alternative options with better prices?

While 5% is indeed a decade’s high yield for CDs, it’s not the highest your money can make, especially with a longer-term lens, Rossman says. “If you’re 25 years old, you might be better off in the market,” he says.

Consider the return on a typical index fund, although admittedly returns here aren’t guaranteed. While the SPDR^® The S&P 500 ETF Trust (SPY), which tracks the S&P 500, posted a 1-year loss of 4.49% through February 14, the index tracker also posted gains of 8.65%, 10.77% and 12.56% over the 3-, 5-, and 10-year periods, respectively, according to Morningstar Data.

Some high yield savings accounts offer APY relatively similar to some of the highest earning CDs. Here are three offering some of the best prices today (check out the full list here):

• Varo savings account: 5% annual interest

  • Make the requisite $1,000 in electronic deposits for your paycheck, pension, or state benefits from your employer or government agency, end the month with a positive balance in both a Varo bank account and savings account, and you’re done justified. But be sure to read the details: balances that don’t meet the requirements and those over $5,000 only earn 3% APY.

• Centier Bank, Connect Savings: 5% annual interest

  • Link your checking and savings accounts to qualify for this savings rate. Just make sure you make the minimum deposits and follow the steps in the fine print.

• MySavingsDirect My savings account: 4.35% annual interest

  • The tariff offered here is still one of the highest on the market. Simply fill out your online application and get started.

One of the main advantages of a Savings account with high return Compared to a CD, says Gary Zimmerman, CEO of MaxMyInterest, the account holder’s ability is for easy access. “In our experience, it’s almost always been better for clients to keep their funds in regular savings accounts with daily liquidity rather than lock them up in CDs,” says Zimmerman, adding, “In a rising-rate environment, you’re probably better off.” Refrain from allowing your interest rate to continue to rise when the Fed hikes, rather than fixing your interest rate with a long-term CD.”