Certificate of deposit (CD) accounts are paying their highest yields in decades thanks to the rapid pace of Federal Reserve rate hikes in 2022 and 2023. But the rates you'll get depend heavily on which account you choose.
Of course, there are several factors that determine CD yields, and a big one is the maturity term. While the banks themselves certainly play a big role, whether you're getting a 1-year or 5-year CD, for example, is a major factor in the yield.
With that in mind, here are the top CD rates in May from the banks on our radar for five different CD term lengths.
Highest 1-year CD rate
In most economic climates throughout the past several decades, longer-term CDs generally had higher yields. But thanks to the high-interest environment and expectation that rates will start to come down later in 2024, the exact opposite is true right now.
The highest-yielding 1-year CD on our list right now (excluding brokered CDs and those with opening deposit requirements over $5,000) is the Bread Savings CD, which offers a 5.25% APY on its 1 Year Bread Savings CD.
You may not be familiar with Bread Financial, but if you're a credit card user, you might know its former name: Comenity Bank. Comenity is the issuer of several major credit card products, and also has an online bank. Its CDs have a $1,500 minimum opening deposit, but if you're looking to maximize yield, a Bread Savings CD could be worth a look.
Highest 2-year CD rate
Bread Financial also offers a high APY on 2 Year CDs (4.65%) as of this writing. It has the same $1,500 opening deposit requirement.
However, for the sake of not being too repetitive, an alternative for those who want a lower opening deposit requirement would be Quontic CDs. The bank currently has 2 Year CDs with a 4.50% APY, with a significantly lower $500 minimum opening deposit.
Highest 3-year CD rate
Quontic is also the highest-yielding 3 Year CD on our top banks list, with a 4.40% APY as of this writing. It has the same $500 minimum.
For a little more color on Quontic, not only does it offer high-yield CDs, but it also has an interest-bearing checking product known as the Quontic High Interest Checking account. This account can link seamlessly with CDs for easy transfers and offers a debit card with ATM access at tens of thousands of locations nationwide.
Highest 4-year CD rate
Bread Savings CDs are the highest yielding (4.15%) at the 4 Year maturity length, and also have a $1,500 minimum deposit.
However, one option that is close is Marcus by Goldman Sachs, which offers a 4.05% APY on its 4 Year CD as of this writing. Not only does it have a lower $500 minimum deposit, but Marcus offers one of the few online CDs that allows account owners to withdraw their interest as it is paid, which could make it a great choice for income investors.
Highest 5-year CD rate
Considering the rest of this list, it shouldn't come as a surprise that Quontic also takes the title of the highest-yielding 5 Year CD, with a 4.30% APY as of this writing. Sure, it pays less than the other Quontic CDs on this list, but your rate is locked in for five years, no matter how interest rates trend overall.
It isn't just about the rates
The five options listed here have the highest CD interest rates among those we cover for their respective maturities. But it's also worth noting that there's more to consider than just the yield when shopping around for a CD. For example, if a bank makes it easy to transfer money to and from your checking account, it could be worth accepting a slightly lower rate than a CD where the transfer process takes a few days.
Another example is if you're retired or otherwise rely on your CDs for income, you'll need to find a CD that allows you to withdraw the interest that you receive. Not all banks do, and those that allow this might not have the absolute highest yields. Take the time to investigate beforehand to make the right choice for you.
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