Best 5-Year CD Rates

Our guide to the highest 5-year CD rates available to anyone in the U.S.

For savings that are better kept in the bank than invested in the market, certificates of deposit offer a way to earn more than you can with a standard savings account. They also come with a virtually risk-free return that's predictable and safe.

As one of the most common CD terms, 5-year certificates of deposit can be found at thousands of banks and credit unions across the country. But what different institutions pay on these CDs varies greatly. Some have interest rates of less than half of a percent, while the best CDs nationwide pay upwards of 2 percent.

To help you find the top 5-year CD rates to maximize your earnings, we regularly research and rank the rates from about 200 banks and credit unions that offer CDs to customers nationwide. To be eligible for our rankings, the institution must be federally insured (FDIC for banks, NCUA for credit unions) and must offer CDs with a minimum initial deposit of $25,000 or less.

In cases where more than one institution pays the same top rate, we've prioritized the ranking by the shortest term, then the smallest minimum deposit, and if still a tie, by which CD has a milder penalty for early withdrawal.

Best 5-Year CD Rates:

  • Lafayette Federal Credit Union – 2.02% APY
  • Georgia's Own Credit Union – 1.90% APY
  • Pen Air Federal Credit Union – 1.85% APY
  • Financial Partners Credit Union - 1.85% APY
  • TruStone Financial Credit Union 1.70% APY
  • State Department Federal Credit Union - 1.66% APY
  • TIAA Bank - 1.60% APY
  • Hiway Federal Credit Union - 1.60% APY
  • Superior Choice Credit Union - 1.60% APY
  • Connexus Credit Union - 1.56% APY
  • Bank of Baroda - 1.55% APY
  • Technology Credit Union - 1.55% APY

Detailed information on these top-paying 5-year CDs is provided below, including specifics about minimum deposits and early withdrawal penalties. For credit union CDs, information is also provided on how anyone can join the credit union.

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Lafayette Federal Credit Union – 2.02% APY

  • Term (months): 60
  • Minimum deposit: $500
  • Early withdrawal penalty: 20 months of interest
  • Membership: Anyone can join Lafayette Federal with a $10 membership in the Home Ownership Financial Literacy Council and $50 or more held in a savings account.

Georgia's Own Credit Union – 1.90% APY

  • Term (months): 60
  • Minimum deposit: $500
  • Early withdrawal penalty: 15 months of interest
  • Membership: Anyone can join Georgia's Own Credit Union with a $5 membership to the Getting Ahead Association and $5 or more held in a savings account.

Pen Air Federal Credit Union – 1.85% APY

  • Term (months): 60
  • Minimum deposit: $500
  • Early withdrawal penalty: Six months of interest
  • Membership: Anyone can join Pen Air Federal Credit Union by agreeing to a free membership in Friends of the Navy Marine Corps Relief Society and keeping at least $25 in a member savings account.

Financial Partners Credit Union - 1.85% APY

  • Term (months): 60
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Six months of interest
  • Membership: Anyone is eligible to join Financial Partners if they belong to any other credit union or to AARP, and keep $25 or more in a Financial Partners savings account.

TruStone Financial Credit Union - 1.70% APY

  • Term (months): 60
  • Minimum deposit: $500
  • Early withdrawal penalty: 12 months of interest
  • Membership: Anyone can become a TruStone member by donating $10 to the TruStone Foundation and keeping at least $5 in a savings account.

State Department Federal Credit Union - 1.66% APY

  • Term (months): 60
  • Minimum deposit: $500
  • Early withdrawal penalty: All earned interest up to 12 months' worth
  • Membership: Anyone can join SDFCU by signing up for an $8 membership to the nonprofit American Consumer Council.

TIAA Bank - 1.60% APY

  • Term (months): 60
  • Minimum deposit: $5,000
  • Early withdrawal penalty: 15 months of interest
  • About: Fortune 500 employee retirement plan provider TIAA offers banking services online through TIAA Bank and via 11 brick-and-mortar branches in Florida.

Hiway Federal Credit Union – 1.60% APY

  • Term (months): 60
  • Minimum deposit: $25,000
  • Early withdrawal penalty: 12 months of interest
  • Membership: Anyone can become a member of Hiway Federal by donating $10 to the Minnesota Resource & Park Foundation and keeping $5 or more in a savings account.

Superior Choice Credit Union - 1.60% APY

  • Term (months): 60
  • Minimum deposit: $25,000
  • Early withdrawal penalty: 12 months of interest
  • Membership: Anyone is eligible to join Superior Choice with an $8 membership in the nonprofit American Consumer Council and $5 or more held in a savings account.

Connexus Credit Union - 1.56% APY

  • Term (months): 60
  • Minimum deposit: $5,000
  • Early withdrawal penalty: 12 months of interest
  • Membership: Anyone can join the credit union by donating $5 to the Connexus Association and holding $5 or more in a savings account.

Bank of Baroda - 1.55% APY

  • Term (months): 60 months
  • Minimum deposit: $1,000
  • Early withdrawal penalty: A 1% reduction of your APR
  • About: One of the largest banks in India, Bank of Baroda is a multinational bank with operations in 25 countries. Its FDIC-insured New York City branch was opened in the late 1970s.

Technology Credit Union - 1.55% APY

  • Term (months): 60
  • Minimum deposit: $1,000
  • Early withdrawal penalty: 6 months of interest
  • Membership: Anyone can join the credit union with an $8 membership in the nonprofit Financial Fitness Association and holding at least $25 in a savings account.

How Does a 5-Year CD Work?

Opening a certificate of deposit involves making an agreement with a financial institution that you will deposit a certain amount of money with them, in an account that will sit essentially untouched, in exchange for earning a premium on the rate of return. You'll also be guaranteed that interest rate for the life of the certificate.

CDs are simply another kind of banking deposit account. Like a savings or money market account, they serve as a holding place for funds you don't use for everyday transactions. But unlike savings and money market accounts, CDs call for a single initial deposit and carry explicit terms about not allowing withdrawals or subsequent deposits, in addition to what the calculated penalty would be if the certificate is cashed out prematurely.

The one transaction that does occur in a CD account is the payment of interest. Depending on the institution and the CD, the interest will be compounded daily, monthly, or quarterly, with interest payments to the account usually occurring monthly or quarterly. Other than this application of interest, and the associated statements that it generates, CD accounts sit relatively dormant until maturity.

When Is a 5-Year CD a Good Choice?

Five-year certificates are a useful savings vehicle in a number of situations. For instance, if it's expected that national interest rates will decrease over the coming few years (i.e., a declining rate environment), it would be beneficial to lock in one of today's more favorable rates for the coming five years.

Socking money away in a 5-year CD can also be a helpful strategy for those saving up for a large financial goal. Perhaps it's money for a down payment on a house. Or maybe you have money saved for your child's college education and you'll need it for tuition in five–six years. By putting it in a CD, you can ensure it earns interest and doesn't lose principal, while also putting a mechanism in place to discourage you from dipping into the funds for other purposes.

Still another reason to open a 5-year certificate is to capitalize on the highest rate you can earn. Since institutions often pay their highest APY on 5-year CDs, stretching for the longer term enables you to maximize your return. Five-year certificates are also a critical component of a CD laddering strategy, which we'll discuss below.

Key Takeaways

  • On average, 5-year CDs offer the highest rates of the most popular CD terms, given the long commitment they require.
  • By rate shopping for the best 5-year CDs, you stand to earn three–five times more than the national average rate.
  • Five-year certificates are the key component of a CD ladder, which is a strategy for earning 5-year rates on all your CD investments, while keeping access to one-fifth of your funds every 12 months.
  • Given their long maturity period, it's especially important to investigate the early withdrawal penalty policies for any 5-year CDs you're considering, just in case your financial circumstances change and you need to withdraw your funds earlier than expected.

What if I Need to Withdraw My Money Early?

Keeping your certificate funds on deposit until maturity is the best way to maximize your earnings. But sometimes life gets in the way, with unexpected financial needs arising. For this reason, every bank or credit union offering CDs has a written policy on the penalty they will apply should you cash the CD out early. 

Most typically, the penalty is a forfeiture of some number of months of interest. For example, the early withdrawal penalty on a 5-year CD might be 12 months of interest. That means an amount equal to what the CD would have earned in a year would be deducted from your balance before liquidating the proceeds.

Early withdrawal penalties are set individually by each bank or credit union, and they run a wide gamut from mild to exceptionally onerous. But even if you don't expect to need an early cash-out, it's smart to determine the early withdrawal penalty in advance of committing to any CD you're considering.

Beware of early withdrawal penalties that can eat into your CD's principal. Losing earned interest when incurring a penalty is to be expected, but avoid certificates where even your principal deposit could be at stake.

How To Build a CD Ladder

A CD ladder is a strategy that enables savers to earn 5-year rates while keeping a portion of their CD funds accessible every year. Here's how it works:

  1. Determine how much money you want to invest in CDs.
  2. Divide that amount by five.
  3. Open a top-paying 1-year CD with one-fifth of the funds, a top 2-year CD with one-fifth, and so forth through a 5-year CD. This will result in five CDs with terms ranging from one to five years.
  4. After 12 months, the 1-year CD will mature. Withdraw the funds and invest them in a new top-paying 5-year CD.
  5. Every 12 months, withdraw funds from the maturing CD and reinvest it in a top-paying 5-year CD.
  6. After four years, you'll have a portfolio of five 5-year CDs, earning top long-term rates. But one of them will mature every 12 months, giving you periodic access to a portion of your funds.

How Do CDs From Traditional Banks, Online Banks, and Credit Unions Differ?

Certificates of deposit are available from brick-and-mortar banks, online-only banks, Internet banking divisions of traditional banks, and credit unions. For the most part, there is little difference between CDs from these different types of institutions.

The biggest difference is that opening a CD with a credit union requires you to be a member of that credit union. The credit union certificates we include in our rankings all allow a method for anyone nationwide to join. However, doing so sometimes requires a little more legwork than becoming a bank customer, it and often requires a donation or fee.

As for CDs from different bank types, they differ very little. The methods available for opening a CD account may include an in-branch visit for physical banks that operate in your area, while Internet banks will only allow account opening online. But aside from the physical presence of a bank (or lack thereof), CDs from different banks will function generally the same way.

These different institution types can pay very different rates. Credit unions are nonprofit organizations and sometimes offer their members better rates than banks do. As a result, you'll see credit unions in many of our rankings of top CDs by term, with them ranking prominently for longer terms like 5-year certificates.

Online banks also tend to pay a higher APY than traditional banks, as their no-presence business model costs less to maintain than brick-and-mortar institutions. These overhead cost savings are often then passed to consumers via better interest rates.

What Are Some Alternatives to a 5-Year CD?

For money you plan to hold as long as five years, a conservative investment in the stock market is an alternative option. However, preserving your principal is not guaranteed in the market. So if keeping your savings reliably intact, with a safe, predictable earnings flow, is important to you, a CD will serve you better than an equity or bond investment.

Though banks and credit unions usually pay higher rates on 5-year CDs than on shorter terms, this isn't always the case. So it can be smart to consider a shorter CD if it allows you to earn a higher APY. This is especially true if national interest rates are expected to rise in the coming years.

Lastly, high-yield savings accounts are proliferating online, enabling savers to earn higher rates than what traditional savings accounts pay. The advantage of choosing a high-yield savings account over a CD is that the savings account will allow you to withdraw your funds at any time you choose. So even if the interest rate is slightly lower than the CD you're considering, you may find the accessibility trade-off to be worth it.

If you aren't looking to lock your money up for a period of time and want easier access to it, you could look at opening a high-yield savings account as an alternative. Below are some savings account options from our partners which can be competitive with the rates you can earn on CDs. It should be noted that unlike a CD, where your rate is locked in, with a savings account the bank or credit union can change your rate at any time.