Best online CD accounts 2023
The Federal Reserve has raised interest rates 10 times from a benchmark range of 0% to 0.25% at the beginning of the pandemic to its current range of 5% to 5.25%. While rising interest rates contribute to a downturn in home sales and pricing, they've been a boon to savings vehicles like high-yield savings accounts and certificates of deposit (CDs).
In particular, many online banks offer significantly higher returns on CDs than their brick-and-mortar counterparts. For example, it's relatively easy to snag a CD yield in the 4% to 5% range with online CD issuers, while Bank of America and Chase Bank offer yields of 0.01% and 0.03%, respectively, for their CDs, as of June 2023.
Read on for our list of the best online CD accounts available and a quick guide to opening a CD account. Start by exploring your CD options here to see how much more money you could be earning.
Best online CD accounts 2023
Here are five of the best online CD accounts, broken down into five categories.
- Best for yield/interest rate: Bread Financial
- Best for maintenance fees: CIT Bank
- Best for minimum deposit: Barclays
- Best for flexibility: Marcus by Goldman Sachs
- Best for reviews: Ally Bank
Best for yield/interest rate: Bread Financial
Bread Financial offers annual percentage yields (APYs) as high as 5.25% for a 1-year CD. Rates as of June 2023 are as follows:
- 1-year CD — 5.25%
- 2-year CD — 5.00%
- 3-year CD — 4.50%
- 4-year CD — 4.35%
- 5-year CD — 4.25%
While a one-year term offers the highest interest rate, consider opting for a longer term to lock in the rate if you anticipate interest rates will fall. You can also improve your liquidity with a CD laddering investing strategy to purchase a series of CDs with varying maturity dates.
Best for maintenance fees: CIT Bank
When comparing CD accounts from different banks and credit unions, pay attention to the fees they charge, as they can offset your earnings. Fortunately, CIT bank doesn't impose fees to open or maintain your account while offering competitive yields, up to 5% APY on short-term CDs.
CIT Bank offers various types of CDs, including:
- Traditional term CDs: This is the most popular type of CD, which involves earning the highest potential return by leaving your money in your account until the end of the term. Typically, if you withdraw money before the maturity date, you must pay an early withdrawal fee which could be the equivalent of several months of earned interest.
- No penalty CDs: These CDs allow you to pull money from your account before its term ends without incurring penalties, though the APY you earn will likely be lower than a traditional CD.
- Jumbo CDs: Jumbo CDs enable you to earn higher CD interest rates by making a higher minimum deposit, typically $100,000 or more.
- Rising rate CDs: Also known as bump-up CDs, these accounts offer an option to increase the interest rate when rates rise.
Best for minimum deposit: Barclays
Most CD accounts require a minimum deposit, ranging from $500 to $2,500 or more. However, some banks, like Barclays, don't have a minimum balance requirement or hidden fees. Barclays offers six CDs terms ranging from one year at 4.80% to five years at 4.20%.
Keep in mind, Barclays is not a full-service bank, so you can't open a checking account, visit a branch office or access an ATM network. However, it does offer a high-yield savings account with an APY five times the national average.
Get started with Barclays now.
Best for flexibility: Marcus by Goldman Sachs
Marcus by Goldman Sachs offers plenty of options with its CD portfolio. It offers nine CD terms, ranging from six months to six years, with APYs between 3.70% and 4.75%. You can choose between a traditional CD or three no-penalty CDs that allow you to withdraw your entire balance penalty-free (partial withdrawals are not allowed) after seven days of opening your account.
Marcus offers a rate bump CD, allowing a one-time option to increase your interest rate before it matures if Marcus raises rates for your term. Read the terms and conditions before you sign up, as conditions may apply.
All Marcus by Goldman Sachs CDs require a $500 deposit to open your account and come with a 10-day CD-rate guarantee. You may automatically receive a matching rate if the rate on your CD term rises within 10 days of opening your account.
Best for reviews: Ally Bank
Ally Bank is an initial player in the online banking sector that provides high-yield savings accounts, checking accounts, credit cards, loans and investing options to its customers. The financial institution also offers three types of certificates of deposit: a high-yield CD, a bump-up CD and a no-penalty CD. These CDs have accumulated over 5,000 reviews on the Ally website, averaging a 4.4-star rating out of five.
You can open a high-yield Ally CD without a minimum deposit or maintenance fees and you'll have a 10-day best rate guarantee. Ally also rewards you with a 0.05% loyalty rate boost if you renew your CD upon its maturity date.
How to open a CD account
Opening a CD account is a straightforward process, especially when done online.
- Compare multiple CD accounts and select the one which best aligns with your financial goals.
- Visit the financial institution's site and choose the CD you want to enroll in. Select your term and follow the prompts to open an account. You'll likely need to enter your name, address, date of birth and Social Security number.
- Transfer funds to open your account.
Once your account is activated, your money can grow risk-free to help you progress toward your goals. Get started here now!
