Best 5-Year CD Rates of July 2025
Written by Theresa Stevens, Ken Tumin
When you open a 5-year CD, you’re guaranteed to receive a fixed interest rate for five years. It’s a long commitment, but the stable interest payments can be appealing, especially if interest rates fall.
The rate table below ranks CDs by the highest 5-year CD rates. Most of the CDs have terms of 60 months (five years), but the table also includes CDs with slightly longer and shorter terms. The filter box above the table can help you customize your results.
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What are the highest 5-year CD rates right now?
A high 5-year CD rate is one that’s well above the average CD rate, which was 1.33% annual percentage yield (APY) as of June 2025. At the time of writing, some of the highest 5-year CD rates are available from the following banks and credit unions:
- Lafayette Federal Credit Union: 4.28% APY
- Mountain America Credit Union: 4.25% APY
- Synchrony Bank: 4.15% APY
- KS StateBank: 4.10% APY
- NASA Federal Credit Union: 4.10% APY
- Utah First Federal Credit Union: 4.15% APY
How to find the best 5-year CD rates
Start your search for a great 5-year CD with online banks because they tend to offer some of the highest rates. They operate without the costs of brick-and-mortar locations, which often allows them to pay more. However, traditional banks sometimes feature CD specials with rates comparable to online bank CD rates.
Credit unions also tend to have higher rates than traditional banks. As not-for-profit institutions that are taxed less than banks, credit unions typically can afford to pay higher CD rates.
Regardless of the type of financial institution you go with, make sure your money is backed by the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA).
Are 5-year CD rates going up?
CD rates have generally been falling or remaining stable, not rising. The Federal Reserve lowered rates three times in 2024, and expectations for further rate changes remain uncertain because of a cloudy economic outlook in 2025. At least for now, CD rates are still relatively high, but this can change if the Fed decides to cut rates this year.
How to choose a 5-year CD
The CD with the highest rate may not always be the best option for you. You might want to consider other factors, such as:
- Minimum deposit: CDs often have minimum deposit requirements. This is the amount required to open the CD, which can range from $100 to $100,000 or more. Note that some banks may also set a maximum deposit limit for CDs.
- Callable or noncallable: Most CDs that you buy directly from a bank or credit union are noncallable CDs, meaning the CD will last the entire term and pay interest through that period. On rare occasions, a bank may offer a callable CD that allows it to end the term early. If this happens, the CD holder is paid the full amount of interest earned up to the day of closure.
- Fixed rate or variable rate: Most CDs pay a fixed interest rate, meaning the rate remains the same for the entire term. On rare occasions, banks offer variable-rate CDs with an interest rate that can fluctuate during the CD term. A variable-rate CD’s starting rate may be much higher than a standard CD’s, and to make a fair comparison, you’ll need to determine the variable CD’s rate throughout the entire term.
- Regular interest payments: Some banks allow you to receive regular interest payments from the CD. Instead of being added back to the CD, the interest is paid out monthly, quarterly or at another interval.
- Early withdrawal penalty: Most CDs have an early withdrawal penalty, which is a fee the bank charges if you withdraw or close your CD before the end of its term. This penalty is often based on a set number of months of interest. In some cases, the penalty may reduce your principal amount.
- Process to open and fund the CD: Some banks don’t offer full digital applications and funding options for their CDs. You may require mail application forms and fund the CD with a paper check, which can complicate and delay the CD opening process.
Tips on opening and managing a 5-year CD
Once you decide on a CD, be careful when opening and managing the CD to avoid any unpleasant — and potentially costly — surprises. Check out the tips below to ensure that your CD experience runs smoothly:
- Review the CD disclosure. Not all banks make CD disclosures easily accessible before you begin the application. If you can’t find it, request a copy before you start the application. Ensure that the CD attributes listed in the disclosure are consistent with what you read from other sources.
- Verify that you can open a CD in your desired ownership category. Online banks sometimes don’t allow CDs to be opened as joint accounts or trust accounts. Ensure that the bank can open the CD in your needed ownership category and that you understand what’s required. For informal trusts, such as payable-on-death accounts, additional steps after the online application may be required to ensure that all beneficiaries are properly designated.
- Confirm the CD funding process. Automated Clearing House (ACH) transfers can be a convenient way to fund a CD, but make sure the transfer limit isn’t below your initial deposit amount. Wire transfers can handle larger deposits, but they often come with fees.
- Mark the CD maturity date. Once the CD is opened, mark the CD’s maturity date in your calendar. CDs often automatically renew as new CDs with much lower rates, so it’s important not to miss the maturity date.
- Note the CD’s grace period. The grace period is the time after the maturity date when you can close the CD and withdraw the funds without an early withdrawal penalty. Grace periods are generally 10 days after the date of maturity.
- Understand the process for closing the CD. Banks typically make it easier to open and fund a CD than to close it and receive the funds. For example, some banks that allow funding a CD with an ACH transfer don’t offer the same option for receiving the funds at closure. Know these details before requesting a CD closure.
Pros and cons of a 5-year CD
A 5-year CD can help you save for medium-term goals. It can also be used as a part of your investment savings to provide stability and safety. Here are the pros and cons of a 5-year CD:
PROS
- Safe: When the CD is directly held at FDIC-insured banks or NCUA-insured credit unions, the principal and all accrued interest are protected up to the insurance limits.
- Relatively high interest rate: 5-year CDs generally have higher interest rates than checking or savings accounts.
- Rate typically fixed: The interest rate for 5-year CDs is generally fixed for the entire term, which is beneficial if interest rates fall.
- Predictable return: Banks often allow CD interest to be paid out regularly, providing a predictable source of income for the entire term length.
- Good for spending discipline: Locking up your funds in a CD forces you to save, which can be helpful if impulse spending is a problem. The early withdrawal penalty discourages tapping into your savings for spending, which helps you grow your money faster.
CONS
- Early withdrawal penalty: Accessing the principal before the CD matures can result in losing part or all of the accrued interest. It can even reduce the principal.
- Earned interest is taxed as ordinary income: If the CD is held in a taxable account, interest earnings are taxed as ordinary income. This is a disadvantage compared with stocks and other investments. Stock returns come from capital gains and dividends, which are typically taxed at lower rates than ordinary income.
- Opportunity cost if interest rates rise: If interest rates rise after you open a CD, your money is locked in, and you may miss out on earning higher rates.
- May not keep up with inflation: CD rates may not always keep pace with inflation, which can reduce the purchasing power of your savings over time.
- Less flexibility than savings accounts: Unlike savings accounts, CDs only allow an initial deposit. Additional deposits are not allowed during the CD’s term. Instead, you'll need to open a new CD.
- Risk of forgetting CD maturity date: CDs are often set to automatically renew at maturity. If you forget the maturity date and the CD grace period expires, you may become locked into a lower-rate CD.
Is a 5-year CD right for you?
Ultimately, whether a 5-year CD is the right next step for you depends on your needs and wants.
If you’re looking for a safe place to earn predictable returns over a longer period of time, a 5-year CD is worth considering. It is a big commitment, though, and if you may need the money before the CD matures, you might be better off with a shorter-term CD or a high-yield savings account.
If you do get a 5-year CD, avoid putting all of your savings into it — keep a portion in a more liquid account, such as a savings account, for easy access in an emergency.
Alternatives to a 5-year CD
- Shorter-term CDs: If five years seems like too long of a commitment, consider these shorter-term options, including:
- High-yield savings accounts and money market accounts: A high-yield savings account or money market account can help you earn a decent rate while still being able to access funds as needed. Keep in mind that with these types of accounts, interest rates are almost always variable, making returns less predictable.
- Treasury bonds: Bonds issued by the Department of the Treasury — such as I bonds, Treasury-inflation protected securities (TIPS) and Treasury bills — are other ways to save money. For longer-term options, I bonds or TIPS are worth considering, while Treasury bills are designed for short-term savings because they generally mature in less than a year.
- Brokered CDs: A brokered CD is purchased through a brokerage firm instead of a bank or credit union. You’re guaranteed to get your principal back at maturity, as with a standard CD. If you need access to funds earlier, you'll need to sell the brokered CD on the secondary market — sometimes at a loss, especially if interest rates have gone up.
Frequently asked questions (FAQs)
Do you pay taxes on CD interest?
Yes, you will owe taxes each year on the interest earned from a 5-year CD. This is even the case if interest is added back to the CD and not paid out. Interest earned on a CD held in a taxable account is subject to federal income tax, and it may be subject to state and local income taxes. Interest is considered earned when it’s credited to your account. Most banks credit CD interest monthly, quarterly or annually, which results in annual tax liability.
What if I need to access my CD money early?
If you need access to any part of a traditional CD's initial deposit, or principal, before maturity, the bank typically allows the withdrawal but charges an early withdrawal penalty. The penalty is usually based on a certain number of months of interest. Most banks only allow a full early withdrawal, meaning you must remove the entire balance and the account will be closed.
How do I use 5-year CDs to build a CD ladder?
The basic method for building a CD ladder with 5-year CDs involves dividing a deposit into five equal parts. Each part is used to open a CD with a different term: 1 year, 2 years, 3 years, 4 years and 5 years. When each CD matures, the money is reinvested into a new 5-year CD. After the 4-year CD matures, all five CDs will have 5-year terms. From then on, one of the five 5-year CDs will mature each year, providing regular access to funds without penalty.
Will a jumbo 5-year CD have a higher rate?
Jumbo CDs have large minimum deposit requirements, typically ranging from $10,000 to $250,000. Banks and credit unions may offer higher interest rates on their jumbo CDs. However, many banks don’t, and sometimes, the highest CD rate is from a bank that offers CDs only with small minimum deposit requirements.
How will I receive interest payments for a 5-year CD?
Most banks provide multiple options for receiving CD interest. The basic option is to have the interest added back to the CD. Another common option is to have the interest paid out to you via check, ACH transfer or internal transfer. The regular interest payouts can be monthly, quarterly or yearly.
How much interest does a 5-year CD earn?
For a traditional CD with a fixed interest rate, it’s easy to calculate the total interest you’ll earn over a five-year period. You’ll need to know the initial deposit and the CD's APY. Use this compound interest calculator to calculate the total amount of CD interest you could earn.
What are the risks of a 5-year CD?
If you need to withdraw your initial deposit before the CD matures, your financial institution will likely charge an early withdrawal penalty, which can eat into your earnings. There’s also a risk of missing out on higher rates if interest rates rise during the five-year term.