Getting a 6-Month CD Rate
A 6-month CD can be a smart option for new investors who seek higher interest rates than you can get from other types of short-term investments — especially investors who aren’t ready to lock their cash up for long.
Certificates of deposit, also known as CDs, are bank accounts with very generous interest rates in exchange for locking your money in place for a predetermined period of time. CDs are a popular choice among everyday consumers because they’re essentially risk-free, as long as the bank is FDIC-insured. CDs are also extremely flexible, since term lengths can vary from a few months to several years. On the shorter end of this spectrum are 6-month CDs: certificates of deposit that can be withdrawn after six months. Since 6-month CDs have such a short term, 6-month CD rates are among the lowest for certificates of deposits.
CDs are a great place to invest for short-term financial obligations, like a wedding or family vacation. They can also be useful financial tools for a CD ladder.
8 best 6-month CD rates of July 2020
- Ally – 0.65% APY
- Barclay’s – 0.65% APY
- Capital One – 0.25% APY
- Charles Schwab – 0.15% APY
- Discover – 0.45% APY
- Marcus – 0.60% APY
- Synchrony – 0.50% APY
- TIAA Bank – 0.75% APY
Ally – 0.65% APY
Ally offers 6-month CDs with a Ten Day Best Rate Guarantee, meaning if interest rates go up within the first 10 days after opening, the bank will honor the higher rate.
Barclay’s – 0.65% APY
If you don’t have a lot of money to invest, Barclay’s is a great choice. There is no minimum balance to open an account as long as you’re earning at least $0.01 per day in interest.
Capital One – 0.25% APY
Capital One’s online-only CDs are federally insured just like normal certificates of deposit, but are convenient and can be set up from anywhere. Interest payments can be received monthly or in a lump sum at the end of the term. Capital One does not have a minimum balance requirement.
Charles Schwab – 0.15% APY
Charles Schwab offers short-term CDs with fixed interest rates that are less risky than its other trading services. You can also take advantage of convenient online tools and CD maturity alerts. Schwab CD OneSource® lets you reinvest and purchase CDs through other issuers, while being able to track all your investments in one place.
Discover – 0.45% APY
In addition to its 6-month CD, Discover offers certificates of deposit with terms all the way up to 10 years. Although the interest rate on its 6-month CD is modest, the rate jumps to 1.50% for a 12-month CD.
Marcus – 0.60% APY
Marcus CD accounts can be opened online in minutes, as long as you can meet the minimum $500 balance. The bank also honors a 10-day rate guarantee, meaning you’ll get a higher interest rate if it goes up in the first 10 days after your account is opened.
Synchrony – 0.50% APY
Synchrony offers its 6-month CD account holders a competitive interest rate. However, you’ll have to invest at least $2,000 to open a certificate of deposit. Like most other banks, Synchrony charges penalties for early withdrawal of funds, but you can withdraw from your interest balance at any time.
TIAA Bank – 0.75% APY
This 6-month CD has one of the highest interest rates, but also the highest minimum balance; you must invest at least $5,000 to open an account. However, TIAA’s unique “yield pledge” promises that its interest rates will always be within the top 5% of competitors.
Compare the 8 best 6-month CD rates of April 2020
|Bank||1-year APY||Minimum Deposit|
|Capital One||0.25%||No minimum|
Disclaimer: Current rates as of 6/30/2020.
What is a 6-month CD?
A 6-month CD is a certificate of deposit that “matures” in six months. After choosing an amount to invest, you won’t have access to those funds for six months, unless you pay a steep penalty fee for a withdrawal. After the term has ended, you’ll get your original investment back, plus the interest it accrued. In exchange for keeping your cash locked in the account, CDs often offer higher interest rates than any other deposit accounts (such as checking, savings, and money market accounts). Use our CD calculator to see how much money you can earn over a single CD term.
6-month CDs vs. other savings vehicles
6-month CDs vs Savings Accounts
A high-yield savings account is still the best place to stash the majority of your savings, because it allows you to withdraw and transfer funds up to six times every month, while still earning respectable interest. Meanwhile, you can’t withdraw a single cent from a certificate of deposit until the term expires (unless you want to pay a penalty fee). If you’d like to invest some of your savings in an account with a small-but-guaranteed rate of return, a CD might be a perfect solution. But only set aside cash you’re sure you won’t need for the duration of the CD’s term, and park the rest of your savings in a high-yield savings account.
6-month CDs vs Money Market Accounts
Like a savings account, money market accounts offer more flexibility than a 6-month CD. You’ll be able to withdraw from a money market account up to six times per month without penalty fees. Some money market accounts require a relatively high minimum balance, however, so a 6-month CD could be a better choice if you have limited funds to work with. While money market accounts often yield higher interest rates than savings accounts at a traditional brick-and-mortar bank, they still won’t be quite as high as a certificate of deposit.
6-month CDs vs 1-year and 3-year CDs
Certificates of deposit are available in a wide variety of lengths, including six months, one year, and three years. The longer the term, the higher the interest rate, so a 3-year CD will generate more interest than a 6-month CD. Just keep in mind that you won’t have access to your funds for a much longer period of time.
The final word
6-month CD rates aren’t as lucrative as long-term CD rates, but a 6-month CD is still a decent option for people who are new to investing and want to try a very low-risk option first. The best 6-month CD rates can top 1%, giving you a few bucks at the end of the term you can use toward your next investment.