Average CD Rates: How Do The Nation's Largest Banks Compare? - 2016 Data

Unlike checking and savings accounts that grant account holders access to their money pretty much at all times, certificates of deposit (CDs) tuck away money for longer periods of time and penalize customers for accessing them too early. However, because of these restrictions, the interest rates on these type of accounts are higher than those on savings or checking accounts. The interest rate earned on each CD is dependent on the CD’s term length, and on some occasions the amount of money in the CD. The chart below lists the range of CD rates by term length at 9 major banks.

Term length (months)1369121824364860120
Bank of America0.03%0.03%0.03%0.04%0.05-0.07%0.07%0.10%0.12%0.15%0.15%0.15%
Chase0.01-0.02%0.01-0.02%0.01-0.02%-0.01-0.05%0.05-0.30%0.05-0.30%0.05-0.40%0.10-0.50%0.25-0.60%0.70-1.04%
Citibank-0.05%0.07%-0.15%0.25%0.25%0.35%0.35%0.50%-
M&T Bank--0.15%-0.30%0.45%0.45%0.90%-1.11%-
PNC Bank-0.05%0.06%-0.15%0.18%0.25%0.30%0.50%0.60%1.10%
SunTrust0.01%0.03%0.05-0.10%-0.10-0.35%0.10%0.20%0.25-1.01%0.30-1.25%0.40%-
TD Bank-0.15%0.15%0.20%0.25%0.30%0.35%0.40%-0.65%-
US Bank0.05%0.05%0.05%-0.10%0.15%0.20%0.35%0.50%0.75%-
Wells Fargo-0.01-0.06%0.01-0.06%-0.05-0.10%------

Some banks offer multiple types of CD’s with slightly different rates. For example, both Chase and Suntrust offer higher interest rate on CD’s that are linked to checking accounts at the same banks. Wells Fargo offers two CD’s with minimum deposit amounts of $1,000 and $2,500, with the latter CD earning a higher interest rate. Typically, most CD accounts require around a $1,000-$2,000 initial minimum deposit. However, TD Bank and US Bank have lower minimum deposit requirements and need only $250 and $500 respectively at the onset.

Interest Rates for CDs at Online Banks

If you’re looking to earn even higher interest rates on your CDs, consider investing in online CDs. In general, online accounts typically earn higher interest rates than more traditional accounts. After all, these types of accounts do not have costs that many brick and mortar accounts and institutions must account for in their pricing. While some people prefer not to have online only savings or checking accounts due to the added difficulty of withdrawing and depositing money for these types of accounts, the hands-off nature of CDs makes an online only situation perfectly optimal. The table below shows the range of interest rates by term length for certain online CD’s:

Term Length369121824303648607284120
Ally Bank0.30%0.60%0.64%1.05%1.20%--1.50%-1.65%
Barclays0.35%0.55%0.60%1.20%1.25%1.35%-1.50%1.60%1.75%---
Capital One-0.40%0.75%0.90%1.10%1.10%1.10%1.10%1.10%1.25%---
Discover0.35%0.65%0.65%1.15%1.20%1.30%1.35%1.50%1.60%1.76%-1.95%2.20%
Everbank0.70%0.85%0.95%1.24%1.35%1.46%1.45%1.61%1.76%1.91%---
First Internet Bank0.50%0.86%-1.16%1.31%1.36%-1.41%1.67%1.92%---
Goldman Sachs-0.70%0.70%1.20%1.20%1.25%-1.35%1.45%1.85%1.85%--
HSBC-0.75%0.01%0.95%0.05%1.29%0.10%0.10%0.15%----
Synchrony0.25%0.41%0.45%1.25%1.25%1.45%-1.50%1.60%1.80%---

Similar to CD’s at more traditional institutions, online only CDs also require initial minimum deposits of typically $1,000-$2,000. Goldman Sachs CDs have a lower minimum deposit requirement at $500. On the other hand, Capital One 360 CDs, Barclays CDs and Ally Bank CDs have no minimum deposit requirements.

CD Interest Rates For Higher Deposit Tiers

Many financial institutions will also offer tiered interest rates for their CD accounts. Typically, many of these bumps in interest rates will occur during longer term periods. The following table lists examples of CD’s with higher interest rates based on deposit tiers:

Term Length369121824303648607284120
Ally Bank0.30%0.60%0.64%1.05%1.20%--1.50%-1.65%
Barclays0.35%0.55%0.60%1.20%1.25%1.35%-1.50%1.60%1.75%---
Capital One-0.40%0.75%0.90%1.10%1.10%1.10%1.10%1.10%1.25%---
Discover0.35%0.65%0.65%1.15%1.20%1.30%1.35%1.50%1.60%1.76%-1.95%2.20%
Everbank0.70%0.85%0.95%1.24%1.35%1.46%1.45%1.61%1.76%1.91%---
First Internet Bank0.50%0.86%-1.16%1.31%1.36%-1.41%1.67%1.92%---
Goldman Sachs-0.70%0.70%1.20%1.20%1.25%-1.35%1.45%1.85%1.85%--
HSBC-0.75%0.01%0.95%0.05%1.29%0.10%0.10%0.15%----
Synchrony0.25%0.41%0.45%1.25%1.25%1.45%-1.50%1.60%1.80%---

Penalties for Early Withdrawal

If you wish to access a CD early and outside the bounds of the given grace period, expect to be penalized for these actions. Penalties will vary depending on the financial institution. Most will charge either 3, 6, 9, or sometimes even up to 24 months of interest depending on the CD’s term length. Other times, banks may charge a certain percentage of the amount withdrawn. 

Special Cases For Withdrawing Your CD Early

Most of the time, you will be penalized for withdrawing money from a CD early. However, there are some options on the market that will not charge you fees for extracting your money outside the grace period. Both Ally Bank and Bank of America offer no penalty/risk free CDs that give customers the flexibility of withdrawing money with no penalty. However, the interest rates on these CDs are lower than those on CDs with stricter withdrawal requirements.  However, almost all CDs mandate that no money can be withdrawn within the first 7 days of a term, even for penalty free accounts. Finally, sometimes CDs may limit the amount of money that can be held in the account. For example, HSBC allows a maximum of $2,000,000 on deposit, excluding interest. 

Overall, if you don’t need to access your money right away, placing your money in a CD account rather than a traditional savings accounts can be a great and safe way to earn extra interest. However, be aware of any restrictions on your given CD such as maximum deposit limits. Furthermore, it is important to note that even if federal interest rates change, your money will be locked to the interest rates of the CD.  

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