Today’s Best 5-Year CD Rates

For many people, 60-month CDs are a great way to save for a specific need, like an emergency account, a future wedding, a house or even retirement. Wealth-building, though, requires having a solid plan in place for growing your hard-earned cash. The best 60-month CDs can help you reach your financial goals with a high APY and other fringe benefits. To help you get started, here are five of the best 60-month CD rates from top banks.

The 5 best 60-month CDs of 2019

BankAPYWithdrawl PenaltyMinimum Deposit
Pen Air Federal Credit Union2.95%180 days’ interest$500
State Department Federal Credit Union2.78%360 days’ interest$500
PSECU2.52%180 days’ interest$500
Navy Federal Credit Union2.25%365 days’ interest$1,000
Discover2.10%6 months’ interest$2,500

What is a 60-month CD?

A 60-month certificate of deposit is a savings deposit account. It doesn’t give you easy access to your funds like conventional savings accounts. Instead, it is a time deposit with a term agreement between you and the bank. You agree to deposit a predetermined amount of money into the account for a term of five years, untouched. The bank agrees to provide a higher yield of interest during that time. Each bank and CD have different perks and disadvantages. So, let’s dive in and explore what our top five picks have to offer

CDs vs High-yield Savings Account

A high-yield savings account often requires a higher minimum deposit and APY than conventional savings, though not as high of an APY as that offered by a high-yield CD. Unlike a high-yield savings account, a CD is a deposit account. Deposited CD funds are intended to be left untouched in the account to maximize the interest gains. Early withdrawal of CD accounts often comes with a penalty. So, a CD account is a better choice for funds that you won’t need during the term of the CD.

CDs vs Money Market Accounts

Money market accounts are more closely related to high-yield savings accounts. They give you more access to your money and often come with checking and debit card privileges. However, money market accounts are intended for growing your savings. So, there are more limitations and less flexibility.

The best 60-month CD rates top even the best money market rates, but there’s a catch. To maximize the benefit of the CD APY, you need to leave your funds in the account, untouched for the term of the CD. In most cases, you are permitted to make an early withdrawal. However, doing so means paying a heavy penalty, sometimes as much as 365 days of interest.

CDs vs Series I Savings Bonds

Like CDs, savings bonds mature over time, but they can take many years longer to mature than CDs. There are currently two different types of government savings bonds — the EE Series and the I Series. Of the two, the I Series earns the most interest, which is really a composite of two different types of interest — a fixed rate and an inflation rate. Combined, the current composite APY is 2.22%, but this may change.

CDs are usually offered at a fixed rate throughout their term. This isn’t always the case and varies by institution. So, always check with the institution before deciding to invest. To help with your search, we’ve scoured the internet for five of the best 60-month CDs.

The Best 60-month CDs

Pen Air Federal Credit Union – Best high-yield CDs

Besides offering the best 60-month CD rates, currently fixed at 2.95% APY, Pen Air requires a low minimum deposit of $500. CD interest is compounded monthly and you’ll get 10 days grace at CD maturity to make any changes before auto-renewal kicks in.

Pen Air has an early withdrawal penalty equal to 180 days of interest. You can make interest-only withdrawals, but this reduces your APY. There are a couple of account maintenance fees to be aware of. Pen Air charges a monthly $15 dormant fee if there is no account activity after 12 months. So, you’ll want to maintain some level of account activity each month to avoid the fee.  Also, if you opt to wire funds into your accounts, there is a $15 wire fee. Pen Air has a mobile app and online banking that allow you to track all of your accounts. Finally, its CDs are compatible with IRA accounts and Trust accounts, but you’ll need the appropriate documentation if that is your goal.

State Department Federal Credit Union – Best for federal workers

This institution takes second place for our pick on the best 60-month CD rates and currently has its 60-month CD rates fixed at 2.78% APY. Another perk is the low minimum deposit of $500. There are no account maintenance fees to worry about and interest compounds daily. Like with other top institutions today, online banking and a mobile app are available.

There are a couple of disadvantages to speak of. Membership is restricted, and there is a hefty early withdrawal penalty equal to 360 days of interest.

Pennsylvania State Employees Federal Credit Union (PSECU) – Best funding options

PSECU offers guarantee rates currently fixed at 2.52% APY, and you’ll need a minimum deposit of $500 to start. When your CD matures, you get 10 days of grace to make any changes. Beyond that, there are no account fees, interest compounds daily, and online banking and a mobile app are available.

The early withdrawal penalty is 180 days of interest. If your principal dips below the $500 minimum, the CD will close and you will incur the penalty again. Finally, there are membership requirements. You must live, work, or attend school in Pennsylvania to join, but if you don’t, there’s an alternative membership path. It requires opening a savings account with a $5 funding fee and joining the Pennsylvania Recreational Park Services. Park services membership costs $10 if you join through PSECU. Otherwise, it’s $20, but there’s no obligation to renew later.

Navy Federal Credit Union — Best for military members and families

This institution offers a fixed 2.25% APY for its 5-year CDs with a minimum deposit of $1,000. The APY bumps to 2.35% APY if you have $100,000 to stash. Dividends are compounded daily and credited monthly. Online banking and mobile app are available. One unique feature is that the institution allows some CD funds to be used as loan collateral, but this doesn’t apply to all CDs.

Beyond the strict membership restrictions that only allow military members and affiliates bank here, early withdrawal is equal to 365 days of interest. Should your CD principal fall below the minimum deposit balance, the CD will be closed with a penalty. If you opt to use your CD as loan collateral, you are limited to one loan per CD.

Discover – Best for IRA CDs

Discover’s 5-year CD rates are currently fixed at 2.10% APY with a minimum deposit if $2,500. This is the same whether you choose a standard, high-yield CD or an IRA CD.

Discover offers two different IRA CDs: Roth and traditional. A Roth CD is funded with after-tax dollars. So, contributions are not tax-deductible and withdrawal doesn’t incur a tax penalty from the IRS. A traditional IRA CD is funded with pre-tax dollars, meaning that you pay taxes on it later and cannot access funds until you are 59½ without incurring an IRS tax penalty. Early withdrawal for any CD — high-yield traditional, Roth, or traditional IRA — does incur a penalty from Discover bank, which equals six months of interest. So, that’s something to keep in mind.

On all CD options, interest compounds daily and you’ll have 9 days’ grace before the CD auto-renews and there are no account maintenance fees. Online banking and mobile app are available. Finally, if you need to reach out, Discover’s customer service is available 24/7.

The Final Word

Whether you’re looking to invest in your immediate future or retirement, a 5-year CD is a worthwhile investment to consider. It pays to shop around for the best rates from top financial institutions across the country. Like the institutions that offer them, each CD offers a unique perspective on investing. Building your wealth begins with a solid plan and a 5-year CD is a great place to start.