A 6-month certificate of deposit (CD) is a short-term savings option that provides a guaranteed rate for six months. It can be a good option for people looking for predictable returns without a long-term commitment.
Read on to compare 6-month CD rates at various banks and credit unions, and learn more about this type of CD and how to find the best rate.
The best 6-month CD rates today are above a 4.50% annual percentage yield (APY), with some CDs on our list earning as much as 4.75% APY.
Finding the best rates for a 6-month CD involves comparing rates from financial institutions, including traditional banks, online banks and credit unions. Online banks tend to offer better CD rates than traditional banks because of lower overhead costs.
You'll also want to consider any minimum deposit requirements for the CD. In some cases, you may need to deposit a specific amount to open the CD and earn the advertised rate.
Here are the minimum deposit requirements to get a 6-month CD at popular banks and credit unions:
A 6-month CD can be a smart choice if you want to earn interest and lock up your savings for a short period of time. For example, if you plan to use $5,000 for a car down payment in six months' time, a 6-month CD can keep the money safe and earn a fixed rate while reducing the temptation to dip into the funds for other purchases. Beware, though, if you need to tap into your savings before the term ends: You may have to pay an early withdrawal penalty.
If you might need the money before the six months are up, a savings account could be a better option. This way, you maintain quick access to your money while still earning some interest.
Once your CD reaches its maturity date, you’ll have the option to withdraw all the money (plus any interest earned) or roll it over into a new CD. Some financial institutions may automatically place your funds in another CD if they don’t hear from you within seven to 10 days after your CD matures.
Best 6-month CD ratesBest 1-year CD ratesBest 18-month CD ratesBest 3-year CD ratesBest 4-year CD ratesBest 5-year CD ratesBest IRA CD ratesBest no-penalty CD rates
Yes, you can incorporate a 6-month CD into a CD ladder strategy. A CD ladder involves opening several short-term and long-term CDs with different maturity dates. As each CD matures, you can either reinvest those funds in a new CD or spend the cash as you see fit. This strategy allows you to benefit from higher rates while still having funds available at regular intervals.
A 6-month CD is a good option if you’re looking for a safe, short-term savings product. Your rate will stay the same for the entire six months, so you’ll know exactly how much you’ll earn. However, it’s important to have a separate, easily accessible savings account for emergencies to avoid the need to cash out your CD and incur an early withdrawal penalty.
It depends on your rate and compounding frequency. For example, let’s say you put $10,000 into a 6-month CD with a 4.75% interest rate and monthly compounding. After six months, your interest earnings will be about $240, making your new balance about $10,240.