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Five-year certificates of deposit (CDs) are among the most popular CDs because they’re often a bank or credit union’s highest-yielding deposit account. In a falling interest-rate environment, locking in a decent return for five years can be very appealing. Then again, five years is a long time to stash your money away, so you should consider your options carefully.
Every week we comb through the five-year CD rates from over 150 banks and credit unions nationwide to find the highest ones. We track APYs daily but re-evaluate and re-order our list weekly. All accounts that make our cut are insured by either the FDIC or the NCUA and are available to customers nationwide, even if there are a few hoops to jump through to get them.
We also include a few four-year CDs because if you’re building a CD ladder, you’ll need these building blocks as well. (For both lists, we consider CDs with terms close to four and five years, if not exact: 42 to 53 months for four-year CDs and 54 to 66 months for five-year CDs.) In the case of a tie on the APY, we look at the CD with the shortest term and then with the lowest minimum deposit required to earn the APY.
Here are the top four-year and five-year CD rates as of June 28 , 2022.
Best 5-Year CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|PenFed Credit Union||3.50%||$1,000||If closed within the first year, 12 months of interest; after that year, 30% of interest|
|Bread Savings||3.35%||$1,500||12 months of interest|
|Popular Direct||3.25%||$10,000||24 months of interest|
|Merrick Bank||3.20%||$25,000||3% of balance|
|MYSB Direct||3.10%||$500||All interest earned, 3 months minimum|
|First Internet Bank||3.09%||$1,000||360 days of interest|
|United Texas Bank||3.05%||$1,000||6 months of interest|
|First National Bank of America||3.00%||$1,000||18 months of interest|
Best 4-Year CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|Bread Savings||3.30%||$1,500||12 months of interest|
|MYSB Direct||3.05%||$500||All interest earned, 3 months minimum|
|Popular Direct||3.05%||$10,000||12 months of interest|
Below are the top certificate of deposit rates available from our partners, followed by a ranking of some of the best CD rates nationwide.
Membership at PenFed Credit Union is available to anyone nationwide, including those in Guam and Puerto Rico. It also serves customers in Okinawa, Japan.
The credit union was formed in 1935 and has grown to more than 2 million members and more than $25 billion in assets. The credit union offers a full array of consumer banking options, including, checking, savings, credit cards, mortgages, auto loans, and more.
All banking can be done through its app or via online banking.
Formerly known as Alliance Data Systems, Bread Financial is an FDIC-insured institution that offers savings accounts and CDs under the name Bread Savings. It also offers lending options under the name Bread Loans in addition to multiple credit cards.
Bread has no brick-and-mortar locations, but customers can manage their accounts online or via a mobile app for Android and Apple devices.
As a subsidiary of Popular Inc., a full-service bank in the U.S., Puerto Rico, and the Caribbean, Popular Direct has 122 years of history. Popular Direct is focused on savings and CD accounts. CD terms range from three months to five years, and you can rest easy knowing your deposits are FDIC-insured.
MYSB Direct is the online-only division of M.Y. Safra Bank, and it is marketed as an option with higher rates. Accounts for MYSB Direct are opened and managed through M.Y. Safra’s online and mobile banking services. Its mobile banking app is available for Android and Apple devices.
The history of the Safra family in banking dates back to Jacob E. Safra, who established his own bank in Beirut in 1920. Two generations later, Moise Y. Safra established M.Y. Safra Bank, a full-service bank in New York City. It offers private, personal, and business banking, as well as fintech services.
CD terms are available from three months to five years.
As its name implies, First Internet Bank was the first FDIC-insured institution to operate entirely online, beginning in 1999. Its corporate headquarters are in Indiana.
First Internet Bank offers CDs in a variety of terms up to five years. In addition to CDs, there is a full suite of banking products and services including checking, savings, money markets, HSAs, and child accounts, as well as loans, credit cards, and business banking services.
United Texas Bank was founded in 1986 in Dallas. It still has only two physical locations, both in Dallas, but its emphasis on online banking makes its services available to anyone in the nation. In addition to CD terms ranging from one month to four years, it offers checking and savings accounts as well as a variety of personal loans.
Its online banking services include a mobile app compatible with Apple or Android devices, online bill pay, and mobile check deposit.
The grand-sounding First National Bank of America is actually based in small-city America. Specifically, it calls East Lansing, Michigan home, and it operates only two branches in the Michigan cities of Grand Rapids and Traverse City. It’s relatively small as far as banks go, with only $1.6 billion in deposits. Still, you can easily open an account here online.
Frequently Asked Questions
What Is a 5-Year CD?
A certificate of deposit is a special type of savings account that locks in your money and your interest rate. Also known as a time deposit, a CD requires you to leave your money alone for a specified length of time without adding to or withdrawing from the account.
With a five-year CD, you agree to keep your money with the bank or credit union for a length of five years and in turn, the financial institution will pay you the same APY for that entire five years. Each month or quarter, you’ll earn interest payments that are deposited into the CD and earn even more interest. That continues until the CD matures (reaches the end of its term), or until you withdraw early, which comes with a penalty.
Most 5-year CDs automatically renew for another term length when they mature. If they do, you can still withdraw or add money to the account during a short grace period at the start of the term. Most grace periods are around seven to 10 days in length. After that, the account is locked down again for another five years, and you would have to pay an early withdrawal fee to access your funds any sooner.
Who Is a 5-year CD Best For?
If you have extra money that you won’t need on short notice (i.e., not the money you keep in your emergency fund), a 5-year CD can definitely earn more interest for you than a typical savings account.
Five-year CDs are often the highest-earning and longest-term accounts offered by a bank and credit union. As long as the institution is insured by the FDIC (for banks) or the NCUA (for credit unions), you’re guaranteed not to lose your money (up to $250,000) even if the bank goes under.
Five-year CDs are also a popular choice for CD ladder strategies. One common CD ladder method is to divide your money among five separate CDs with staggered terms (one-year, two-year, three-year, four-year, and five-year) so that one CD matures every year.
Once the one-year CD matures, you reinvest that money into a five-year CD, and you do that every year. That way, all of your money will be stored in high-yield CDs, but you’ll still get access to part of your money once a year if you should need it. You can also include CDs with terms shorter than a year if you want to access your money sooner.
What Are the Alternatives to a Five-Year CD?
Some banks offer CDs with even longer terms, all the way up to 10 years. That’s a big commitment, but you may be able to earn an even higher rate yet with these CDs.
Alternatively, if you won’t need the money you’ve set aside for a really long time (such as before you retire), many people advise investing in the stock market instead. Over the long term, the stock market has vastly outperformed CDs. There are no guarantees though, and unlike with a CD, you could lose money in the stock market.
Many banks offer five-year IRA CDs for you to earn a guaranteed rate on your retirement savings. They have a hidden opportunity cost, though: Your money might not grow as fast as if you’d placed it in a higher-earning (but more volatile) investment like stocks or bonds.
One other option is a high-interest savings account. You’ll have easier access to your money than you would with a CD, and many savings accounts these days pay rates that are competitive with CDs. The downside? The APYs are variable, so you won’t be guaranteed a rate of return.
If you prefer instant account access, we have partnered with the following banks to bring you the high-yield savings and money market account offers displayed in the table.
Consumer Financial Protection Bureau. "What Is a Certificate of Deposit (CD)?"
Office of the Comptroller of the Currency. "My Time Certificate of Deposit (CD) Matured, But I Didn't Redeem It. What Happened to My Funds?"
CreditUnion.gov. "Is My Credit Union Federally Insured and How Do I Know?"
U.S. Securities and Exchange Commission. "Risk and Return."