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 5-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 4-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: 42-53 months for 4-year CDs and 54-69 months for 5-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 4-year and 5-year CD rates as of July 14, 2020.
APYs are changing rapidly amid widespread uncertainty about the economy and financial markets. The Balance is monitoring rates and will update them accordingly.
Best 5-Year CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|Georgia's Own Credit Union||1.70%||$500||15 months of interest|
|Pen Air Federal Credit Union||1.60%||$500||6 months of interest|
|Connexus Credit Union||1.56%||$5,000||12 months of interest|
|United Educators Credit Union||1.51%||$500||7 months of interest|
|State Department Federal Credit Union||1.51%||$500||Up to 12 months of interest|
|Pinnacle Federal Credit Union||1.50%||$500||12 months of interest|
|TruStone Financial Credit Union||1.50%||$500||12 months of interest|
Best 4-Year CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|Pen Air Federal Credit Union||1.55%||$500||6 months of interest|
|Georgia's Own Credit Union||1.50%||$500||12 months of interest|
|MAC Federal Credit Union||1.50%||$1,000||3 months of interest|
As you might have guessed, Georgia’s Own Credit Union is indeed based out of Georgia—Atlanta, to be specific. It’s been around since 1934 and has over 210,000 members and $2 billion in assets. While living in certain parts of Georgia is one way to qualify for membership, you can also join by first becoming a member of the GettingAhead Association for $5 or Georgia’s Own Foundation for $10. As with most other credit unions, you’ll also need to keep at least $5 in a savings account in order to keep your membership active.
Pen Air Federal Credit Union—based in Pensacola, Florida—has $1.6 billion in assets and 15 branches in Northwest Florida and Southeast Alabama. While it was chartered in 1936 to serve civil service and military employees, anyone can join at no charge by getting a membership to the Friends of the Navy Marine Corps Relief Society. (Pen Air will make a $1 donation to the society on your behalf when you apply to the credit union.) You’ll also need to deposit at least $25 in a share savings account to join.
Connexus Credit Union has more than 368,000 members represented in each of the 50 states. Connexus has over $2.79 billion in assets and branches in Wisconsin, Minnesota, Ohio, and New Hampshire. Customers outside those states can access their services online and through any of their 6,000 shared branches.
Becoming a Connexus member costs $5.
United Educators Credit Union is based out of Mendota Heights, Minnesota, just south of Minneapolis and St. Paul. The credit union was established in 1957 as MEA Credit Union to serve members of the Minnesota Education Association. It expanded its access to membership and changed to its current name in 1999. The credit union closed out 2019 with more than 17,000 members and $190 million in assets.
Membership is available to anyone who lives, works, worships, attends school, or does business in the Minnesota counties of Anoka, Dakota, Hennepin, Ramsey, or Washington. Membership also is available to members of the United Educators Foundation, employees of Educators Financial Services Inc. and the city of St. Louis Park, Minnesota, and members of several other education-based organizations. Eligibility for membership also can be attained by making a one-time $5 donation to the United Educators Foundation.
Chartered in 1935, the primary purpose of State Department Federal Credit Union (SDFCU) is to serve employees of the United States Department of State and affiliate employee groups. SDFCU offers all standard banking products, including CDs, mortgages, credit cards, auto loans, IRAs, and savings accounts.
With over $1.9 billion in assets and 86,000 members, SDFCU is headquartered in Alexandria, Virginia, and has six branch locations in the Washington, DC, metro area. If you are not a Department of State employee or part of an affiliate employee group, it is still possible to join SDFCU—just join the American Consumer Council for $8 to $15.
Pinnacle Federal Credit Union was established in Edison, New Jersey, in 1962. Pinnacle serves over 14,000 members and 300 employer groups, and it holds over $100 million in assets. While Pinnacle primarily serves its membership across New Jersey, New York, and Pennsylvania, anyone can join by signing up for a free membership with the American Consumer Council and depositing $5 in a savings account.
With 14 locations across Minnesota and Wisconsin, TruStone Financial Credit Union has come a long way since it was founded by eight Minneapolis teachers in 1939. Today, the credit union offers a full suite of personal and business banking services including checking, savings, loans, and credit cards. CD terms range from three months to five years.
Anyone who doesn’t meet eligibility based on employer or location can become a member by making a $10 donation to the TruStone Financial Foundation. You’ll also need to open a savings account with a $5 deposit.
MAC Federal Credit Union offers members financial products like checking, savings, and money market accounts, credit cards, insurance, and more. Originally founded in 1952 to serve the active duty and civil service personnel in Fort Wainwright, Alaska, the credit union is now open to anyone who purchases a two-year membership for $40 to the Association of the United States Army. When applying for the membership, just change the chapter to the Polar Bear Chapter in Fort Wainwright, Alaska.
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 5-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. A common CD ladder is to divide your money among five separate CDs with staggered terms (1-year, 2-year, 3-year, 4-year, and 5-year) so that one CD matures every year.
Once the 1-year CD matures, you reinvest that money into a 5-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 5-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 5-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.
Pen Air Federal Credit Union. "Friends of the NMCRS Inc. Charity Golf Tournament." Accessed July 7, 2020.
Consumer Financial Protection Bureau. "What Is a Certificate of Deposit (CD)?" Accessed July 7, 2020.
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?" Accessed July 7, 2020.
CreditUnion.gov. "Is My Credit Union Federally Insured and How Do I Know?" Accessed July 7, 2020.
U.S. Securities and Exchange Commission. "Risk and Return." Accessed July 7, 2020.