As of January 2026, locking in a stable return on your cash is simpler than ever with five-year Certificates of Deposit (CDs). These CDs offer a fixed interest rate for a five-year term, making them ideal for long-term financial planning. Currently, the best rates range from 3.90% to 4.00% Annual Percentage Yield (APY), depending on the financial institution and deposit amount.
Here’s a breakdown of top CD options to help you maximize your savings:
Top Banks Offering Competitive 5-Year CD Rates
Sallie Mae Bank: Offers a competitive APY with a $2,500 minimum deposit. Early withdrawals incur a penalty of 180 days’ worth of simple interest.
Marcus by Goldman Sachs: Features a strong APY with a low $500 minimum. The early withdrawal penalty is 180 days of interest.
GTE Financial: This credit union provides one of the highest available APYs for a 5-year CD, but requires membership via family, employer, location, or the CU Savers club. The minimum balance is $500, with early withdrawal penalties ranging from 90 to 365 days of dividends.
Synchrony Bank: Stands out by requiring no minimum opening deposit while still offering a high interest rate. Early withdrawals are penalized at 365 days of interest.
Bread Savings: Provides an APY on its 5-year CD with a $1,500 minimum deposit. Early withdrawal penalties apply for one year’s worth of simple interest.
Alliant Credit Union: Offers a competitive APY, increasing to a higher rate for balances exceeding $75,000. The minimum deposit is $1,000, with an early withdrawal penalty of 180 days of interest. Membership is required but can be obtained through various means.
Lafayette Federal Credit Union: Pays an APY on its 5-year Fixed-Rate CD with a $500 minimum. Membership is required, usually tied to Potomac, Maryland, or Washington D.C. Early withdrawal penalties are steep at 600 days of interest.
Randolph-Brooks Federal Credit Union: Offers tiered rates on 5-year CDs, ranging from to APY based on deposit amount (minimum $1,000). Membership is limited to those living, working, schooling, or worshiping in Texas. The early withdrawal penalty is 300 days of interest.
Understanding CD Rates and Market Trends
CD rates are closely linked to Federal Reserve policy. When the Fed raises interest rates to curb inflation, CD rates typically follow. Conversely, when the Fed cuts rates, CD rates tend to decrease. Current economic conditions suggest potential rate cuts in the future, meaning locking in a rate now could be advantageous.
The current market also presents an inverted yield curve where shorter-term CDs sometimes offer higher returns than longer-term ones. This is unusual but highlights the importance of comparing rates across different terms before making a decision.
Is a 5-Year CD Right for You?
A 5-year CD provides a guaranteed return on your savings, eliminating the temptation to spend the money. However, it comes with trade-offs: you cannot access the funds without incurring penalties, and you may miss out if interest rates rise during the term.
Consider a 5-year CD if:
- You have funds you won’t need for at least five years.
- You want a guaranteed rate of return.
- You prefer stability over flexibility.
Before committing, compare rates across institutions and consider your financial goals. CDs can be a valuable tool in a well-rounded savings strategy, but they are not always the best option for everyone.
Always verify terms and conditions before opening an account.
