Best 5-Year CD Rates of September 2024: Lock In Returns for the Longer Term (2024)

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The best 5-year CDs far outpace the national average CD rate on 5-year terms, which is 1.42% APY (Annual Percentage Yield). Generally, online banks and credit unions offer the best CD rates.

The best 5-year CD rate is 4.32% APY from the Lafayette Federal Credit Union.

The top 5-year CDs pay high interest rates. They also might have low minimum opening deposits, low early withdrawal penalties, and strong mobile banking appsto put them over the top.

A 5-year CD may be ideal if you don't need access to some of your savings for a few years. If you're also interested in other CD term lengths, check out our overall best CD rates guide.

We check rates daily to find the best rates for 5-year terms. Here are our top picks for 5-year CDs.

Best 5-Year CD Rates

• Lafayette Federal Credit Union 5 Year Certificate: 4.32% APY
• BMO Alto 5 Year High Yield CD: 4.10% APY
• First Internet Bank of Indiana 5 Year CD: 4.09% APY
• Department of Commerce Federal Credit Union 5 Year Share CD: 4.08% APY
• Synchrony 5 Year CD: 4.00% APY
• Marcus 5 Year CD: 4.00% APY
• MYSB Direct 5 Year CD: 4.00% APY
• Northern Bank Direct 5 Year CD: 4.00% APY

Compare the Best 5-Year CDs

The best 5-year CDs pay well above average CD rates for a 5-year term. We also highlight whether a CD stands out for a low minimum opening deposit and lenient early withdrawal penalties. If the bank or credit union also has other competitive CD terms, we mention them, too.

Our top picks for CDs are protected by FDIC or NCUA insurance. Money is safe at a federally insured financial institution. When a financial institution is federally insured, up to $250,000 per depositor is secure in a bank account.

5-Year CD Reviews

Lafayette Federal Credit Union 5 Year Certificate

Lafayette Federal Credit Union pays a high interest rate on a 5-year term. It also offers competitive rates for its other certificate terms, including one of the best 3-year CD rates.

You only need $500 to open an account. Usually, you'll need at least $1,000 to open a CD at a financial institution.

To open a certificate you must meet membership requirements. You can join Lafayette Federal Credit Union regardless of where you live in the United States by becoming a member of the Home Ownership Financial Literacy Council. You're also eligible for membership if you live, work, or worship in Potomac, Maryland, or parts of Washington, DC; work at a Select Employer Group; become a member of the American Consumer Council and live in Maryland, Virginia, or Washington, DC, or have a family member with credit union membership.

APY for 5-year CD:4.32% APY

5-year CD early withdrawal penalty:600 days of interest

BMO Alto 5 Year High Yield CD

The BMO Alto High Yield CD may be a good choice if you'd like to open an online CD with a $0 minimum opening deposit. BMO Alto is the online-only division of BMO Bank, and its accounts are available nationwide.

BMO Alto doesn't have a mobile app. Also, you can't go to a BMO Bank location to get customer support for BMO Alto accounts. That said, customer service for BMO Alto is available 24/7 by phone.

APY for 5-year CD: 4.10% APY

5-year CD early withdrawal penalty: 180 days of interest

BMO Savings and CD Accounts

First Internet Bank of Indiana 5 Year CD

The 5-year First Internet Bank of Indiana CDpays a higher interest rate than most brick-and-mortar and online banks.

First Internet Bank of Indiana also might be appealing if you're looking for a money market account.

First Internet Bank of Indiana compounds your interest monthly, not daily. Depending on how much money is in your CD, this may or may not make a significant difference. You can also find a bank that charges less for an early withdrawal from a 5-year CD.

APY for 5-year CD: 4.09% APY

5-year CD early withdrawal penalty:360 days of interest

First Internet Bank of Indiana Review

Department of Commerce Federal Credit Union 5 Year Share CD

The Department of Commerce Federal Credit Union 5 Year CD has a $500 minimum deposit. That's low compared to other banks, which usually require at least $1,000 to open an account.

Department of Commerce FCU allows all United States citizens and residents to open an account. The easiest way to become a member regardless of where you live in the U.S. is to join the American Consumer Council.

APY for a 5-year CD: 4.08% APY

5-year CD early withdrawal penalty:180 days of interest

Synchrony 5 Year CD

Synchrony offers a good rate for its 5-year CD. Its required minimum opening deposit is $0, which is very rare for a CD. If you're hoping to put a small amount of money in a CD, this might be a good choice for you.

Synchrony's early withdrawal penalties can be high, depending on the term. If you think there's a chance you'll need to withdraw your money before the end of the term length, you might want to go with another bank.

APY for 5-year CD: 4.00% APY

5-year CD early withdrawal penalty: 1 year of simple interest

Synchrony Bank Review

Marcus 5 Year CD

Marcus offers a good rate for 5-year CDs; it also requires a lower-than-average minimum opening deposit of $500. If you want to open a CD with a smaller amount of money, Marcus might be a good choice for you.

If you only want to use one bank for all of your financial needs, Marcus might not be your best choice. Marcus doesn't have a checking account, so you'll have to use another bank that does in addition to using Marcus.

APY for 5-year CD: 4.00% APY

5-year early withdrawal penalty: 180 days of interest

Marcus Bank Review

MYSB Direct 5 Year CD

MYSB Direct CDs pay a competitive interest rate and have a low minimum opening deposit. For example, you can get one of the best 2-year CD rates and 5-year CD rates at the institution.

M.Y. Safra Bank is a New York-based financial institution that serves customers nationwide and its online-only division is MYSB Direct.

The bank compounds interest monthly, not daily. Depending on how much money you plan to keep in a CD, this may or may not make a significant difference.

APY for 5-year CD: 4.00% APY

5-year CD early withdrawal penalty: 90 days of interest

Northern Bank Direct 5 Year CD

Northern Bank Direct has good rates on 18-month, 2-year, and 5-year CDs. If you're planning on opening multiple CDs with the same bank, Northern Bank Direct might be a good choice for you. It also has a low minimum opening deposit of $500.

Northern Bank Direct charges high early withdrawal penalties. If you think there's a chance you'll need to withdraw your money before the term length ends, you might want to go with another bank.

APY for 5-year CD: 4.00% APY

5-year CD early withdrawal penalty: 3 years of interest

Northern Bank Direct Review

BankTrustworthinessandBBBRatings

We've compared each company'sBetter Business Bureauscore. The BBB grades businesses based on factors like responses to customer complaints, honesty in advertising, and transparency about business practices. Here is each company's score:

Department of Commerce Federal Credit Union has an NR grade because the BBB says it has services that are outside the scope of what the BBB reviews.

MYSB Direct currently has an NR (No Rating) grade because the BBB doesn't have enough information to provide a rating.

Synchrony has an NR rating from the BBB because the business is currently responding to previously closed complaints.

BMO has been involved in one recent public controversy. In 2022, a Minnesota jury ordered the bank to pay $564 million in damages in a lawsuit involving a Ponzi scheme operated by a Minnesota businessman. That said, the Ponzi scheme was uncovered in 2008 at M&I Bank, and BMO bought M&I Bank in 2011.

Synchrony has also been involved in a couple of recent public controversies. In 2023, Synchrony was required to pay$2.6 million in a settlementwhen accused of calling customers about bank accounts they didn't have.

In 2021, the bank also was required to pay$3.5 million in a settlementwhen accused of making unreasonable phone calls to debtors living in California.

What Influences the Best 5-Year CD Rates

Federal Reserve Policies

The Federal Open Market Committee, a branch of the Federal Reserve, is in charge of managing the federal funds rate. During at least eight meetings held per year, the FOMC assesses economic conditions and decides if the federal funds rate should be changed.

National CD rate trends are influenced by changes in the federal funds rate. CD rates often increase when the federal funds rate goes up, and CD rates will often decline when the federal funds rate drops.

Economic Conditions and Long-Term Outlook

The CD rate forecast for 2024 is that rates on all types of savings accounts are expected to decline. However, the exact time and pacing when CD rates will fall depends on economic conditions. Banks also have their own criteria for setting rates.

Furthermore, short-term CDs offer more competitive rates than long-term CDs because of the current economic environment. CD rate trends will likely shift once the Federal Reserve begins cutting rates. It's unclear when the Federal Reserve will start rate cuts, but paying attention to upcoming Fed meetings can help you stay up to date on news.

Competition and Individual Offers

Banks occasionally have promotions for specific terms, including 5-year CDs. If you're looking at a promotional CD, review the requirements needed to obtain the highest rate.

Sometimes, banks will only promotional CDs for new customers or customers who have specific bank accounts. You also might be required to deposit "new money." Each bank will define what new money means in the listed requirements, but generally, it refers to money that hasn't been deposited at their financial institution.

Should You Lock In a 5-Year CD?

While there are other terms that pay higher CD rates, the best 5-year CDs still offer good rates overall. Experts recommend keeping money in a CD term that fits your savings goals, so if you need to keep your money in a relatively low-risk place for around 5 years, these CDs are a good match.

A 5-year CD is also a great option if you're building a CD ladder. It can help balance out short-term CDs, since national CD rates trends are likely to shift.

5-Year CD FAQs

Why You Should Trust Us: Expert Advice on Choosing the Best 5-Year CD

To learn more about what makes a good CD and how to choose the best fit, Business Insider consulted four experts:

• Tania Brown, CFP® professional, vice president of coaching strategy at OfColor
• Roger Ma, CFP® professional with lifelaidout®and author of"Work Your Money, Not Your Life"
• Sophia Acevedo, banking editor, Business Insider
• Mykail James, MBA, CFEI, BoujieBudgets.com

Here's what they had to say about CDs.

How do you decide how long your CD term should be?

CDs come in different terms that range from months to years, and a 5-year CD is typically one of the longest terms available. When choosing the right term for you, start with how you're going to use the money, and when. If you're buying a house in five years and know you won't need the money until then, a 5-year CD might work for your needs — however, if you're buying that house in two years, you'll need to choose a shorter term.

Once you know when you'll need the money, you can take a look at available rates. Maybe you have some flexibility around when you'll need the money, and find it worth leaving in the bank an extra six months or year to get a higher rate.

Should you put money in a high-yield savings account, money market account, or CD?

You're allowed to have multiple types of accounts, and it's OK to put money in different places for different purposes. Perhaps you want a high interest rate on money you can access at any time for an emergency, so you put that emergency fund in a high-yield savings account. Then, you want a savings account from which you can make regular withdrawals, so you use a money market account. Finally, you want to keep a nest egg out of sight and out of mind while earning a strong interest rate, so you use a CD.

Choosing which type of account to use comes down to how you plan to use that money, and when.

Our Methodology: How We Chose the Best 5-Year CDs

Business Insider's personal finance team researched over 60 banks and credit unions to find the best 5-year CD rates. We reviewed each institution to find the most-well rounded banking options. For each account, we compared the minimum opening deposits, early withdrawal penalties, and interest rates. We also considered the overall banking experience at each bank by assessing customer support availability, mobile app ratings, and ethics.