Yes, you can get 6% on a CD now. As of January 10, 2025, the Financial Partners Credit Union is offering 6.00% APY on their CD rates for 8 months. The minimum deposit is $1,000.00, up to a $5,000 maximum. Check out the latest CD rates from over 400 banks and credit unions.
From mid-2023 to September 2024, many banks offered attractive certificate of deposit (CD) rates of around 5%. But now that the Federal Reserve has been cutting rates, CD yields are dropping too. Despite lower rates, CDs remain a solid option for growing your savings.
You can earn hundreds of dollars or more
If you open a 2-year CD with a rate of 4.20%, for example, you'll earn approximately $483 on your $5,000 deposit. If you keep the money in longer, you'll make even more. A $5,000 5-year CD at 4.35% will leave you with a profit of around $1,187.
Bandhan Bank is a leader among private banks, offering 8.05% interest for 1-year fixed deposits. RBL Bank offers 8.00% on FDs with a tenure of 500 days, ensuring that medium-term investors also get good returns.
There are two high-yield checking accounts with interest of at least 7%, though: BCU PowerPlus Checking and Landmark Credit Union Premium Checking Account. Both come with major downsides, though. Are 7% interest savings accounts safe?
One major drawback of a CD is that account holders can't easily access their money if an unanticipated need arises. They typically have to pay a penalty for early withdrawals, which can eat up interest and can even result in the loss of principal.
Is CD interest taxable? All types of income you earn in a taxable year must be reported to the IRS. That includes the interest on your CDs. As you earn interest on your CD even before it is fully matured, it is still considered taxable income and subject to the annual federal income tax.
The biggest potential risk to your CD balance is fees. CDs typically come with early withdrawal penalties to keep account holders from dipping into their funds before maturity. These penalties can significantly reduce your overall return.
Unlike traditional or high-yield savings accounts, which have variable APYs, most CDs lock your money into a fixed interest rate the day you open the account. That's why if you suspect interest rates will drop further, it can be a good idea to put money in a CD to preserve the high APY you would earn.
How much interest would you earn? If you put $20,000 into a 5-year CD with an interest rate of 4.60%, you'd end the 5-year CD term with $5,043.12 in interest, for a total balance of $25,043.12. Not all CDs offer that interest rate, though.
The best type of account to use for your $1,000 savings depends on your financial goals and needs. In general, CDs are better for money you can set aside for a specific period, while high-yield savings accounts are better for funds you may need to access at any time. These aren't the only things to consider, though.
Certificates of Deposit (CDs)
In return, you'll get more interest than with a savings or other account you can access any time. One-year CDs are currently paying rates of 3.50 – 4.50%, which comes out to $2,000 in interest on a $50,000 CD.
Safety and security: You can save money in a CD without worrying about a stock market plunge or other risks. CDs come with fixed interest rates and FDIC or NCUA insurance, which could protect your money even if your bank fails.
Any amount you deposit in a CD should be money you're comfortable locking up for the full term length. First, you should have enough cash in an emergency fund to cover at least three months of expenses, and this cash should be in an account where you can access it at any time without penalty.
Airtel Finance is in partnership with multiple small finance banks and NBFCs. They offer fixed deposit interest rates of up to 9.5% per annum, which is among the highest in the market. 5.