The best CD rates in May 2026 range from 4.75%–5.00% for 6-month and 1-year terms at top online banks. A 1-year CD currently yields about 0.50–0.75 percentage points more than the national average savings account rate — and the return is guaranteed, not variable.
Current top rates (May 2026): 6-month: 4.90% | 1-year: 4.75% | 2-year: 4.50% | 3-year: 4.25% | 5-year: 4.00%
Current CD Rates by Term (May 2026)
| Term | Top Rate | National Average | Best Available At |
|---|---|---|---|
| 3-month | 4.60% | 1.45% | Online banks, credit unions |
| 6-month | 4.90% | 1.75% | Online banks |
| 1-year | 4.75% | 1.80% | Online banks, credit unions |
| 18-month | 4.65% | 1.55% | Credit unions |
| 2-year | 4.50% | 1.40% | Online banks |
| 3-year | 4.25% | 1.20% | Online banks |
| 5-year | 4.00% | 1.10% | Credit unions |
Rates current as of May 2026. Rates are variable and can change daily. National averages from FDIC.
Best CD Rates by Bank (May 2026)
| Bank | 1-Year CD APY | 2-Year APY | Minimum Deposit |
|---|---|---|---|
| Ally Bank | 4.65% | 4.40% | $0 |
| Marcus by Goldman Sachs | 4.70% | 4.45% | $500 |
| Discover Bank | 4.70% | 4.40% | $2,500 |
| Capital One 360 | 4.60% | 4.30% | $0 |
| Synchrony Bank | 4.75% | 4.50% | $0 |
| Bread Savings | 4.80% | 4.60% | $1,500 |
| CIT Bank | 4.65% | 4.35% | $1,000 |
| Navy Federal CU | 4.85% | 4.55% | $1,000 |
Rates updated May 2026 — verify directly before opening.
CD Rates vs. High-Yield Savings Accounts
| Feature | 1-Year CD (4.75%) | HYSA (4.30%) |
|---|---|---|
| Rate type | Fixed | Variable |
| Liquidity | Locked until maturity | Withdraw anytime |
| Rate risk | None — guaranteed | Rate may fall |
| Early exit | 90–180 day interest penalty | None |
| Best use | Cash you won’t need for 12 months | Emergency fund, short-term savings |
When CDs beat HYSAs: If you believe the Fed will continue cutting rates, a 1-year CD locks in 4.75% even if savings rates fall to 3.5% by next year. The guaranteed return wins.
When HYSAs beat CDs: If you might need the funds before maturity, the early withdrawal penalty can eliminate your interest advantage. For emergency funds, a HYSA is always better.
What Is a CD Early Withdrawal Penalty?
Breaking a CD before maturity costs you a portion of the interest you’ve earned:
| Term | Typical Penalty |
|---|---|
| Under 6 months | 60–90 days of interest |
| 6–12 months | 90–150 days of interest |
| 12–24 months | 150–180 days of interest |
| 2–5 years | 180–365 days of interest |
Worked example: You open a 2-year CD at 4.50% APY with $10,000. After 10 months, you break it early. The penalty is 180 days of interest:
- 180-day interest at 4.50% on $10,000 = $221.92
- You earned 10 months × $37.50/month = $375 in interest
- Net after penalty: $375 - $222 = $153 earned (vs. $450 if you’d held to maturity)
No-penalty CDs: Several banks offer CDs with no early withdrawal penalty, typically with slightly lower rates (usually 0.25–0.50% below standard). Ally and Marcus both offer no-penalty CD options.
CD Ladder Strategy
A CD ladder splits your savings across multiple terms to balance yield and liquidity:
Example: $12,000 ladder
| CD | Amount | Term | Rate | Maturity |
|---|---|---|---|---|
| CD 1 | $3,000 | 1-year | 4.75% | May 2027 |
| CD 2 | $3,000 | 2-year | 4.50% | May 2028 |
| CD 3 | $3,000 | 3-year | 4.25% | May 2029 |
| CD 4 | $3,000 | 5-year | 4.00% | May 2031 |
Each year, one CD matures. You reinvest at the best available rate or use the funds if needed. This approach earns blended rates across the curve while keeping some funds accessible annually.
When to Open a CD
Good time to open a CD:
- You believe interest rates will fall in the next 12–24 months
- You have cash you won’t need for the CD’s full term
- You want a guaranteed, predictable return without market risk
Less ideal to open a CD:
- You might need the funds before maturity (use HYSA instead)
- You believe interest rates will rise further (wait and get a better rate later)
- You’re building an emergency fund (liquidity matters more)
See also: High-yield savings accounts vs. CDs | How the Fed affects savings rates | Savings rate history | Best savings accounts 2026
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