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A 6-month CD is a type of savings option that lets you maintain a fixed interest rate for a short period of time. The national average APY (Annual Percentage Yield) on a 6-month CD is 1.26% APY.
However, some of the best online banks offer much higher interest rates on 6-month CDs right now. The best CD rate for a 6-month term is APY from Old Point National Bank. But if you're looking for other options, you can still find great rates.
We check rates daily to find the best rates for 6-month terms. Below, you'll find our top picks.
Best 6-month CDs
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These are our picks for the best 6-month CD rates. Our top picks for CDs are protected by FDIC or NCUA insurance. Although Silicon Valley Bank, Signature Bank, and First Republic Bank have recently been shut down, keep in mind money is safe at a federally insured financial institution. When a financial institution is federally insured, up to $250,000 per depositor is secure in a bank account.
Compare the Best 6-Month CDs
Expert Advice on Choosing the Best 6-month CD
To learn more about what makes a good CD and how to choose the best fit, Insider consulted four experts:
Insider
Here's what they had to say about CDs. (Some text may be lightly edited for clarity.)
How can someone figure out whether a bank is right for them?
Tania Brown, certified financial planner at SaverLife:
- It should be FDIC insured
- It should fit the banking experience you want (A local bank to visit in person? An online bank to use through your phone? The ability to write checks?)
Sophia Acevedo, certified educator in personal finance, banking reporter, Personal Finance Insider:
- Prioritize what matters to you, like whether you can waive a monthly service fee
- Pay attention to rates if you want a high-interest account (it should pay higher than average bank account rates)
How should you choose the right CD term length?
Roger Ma, certified financial planner with lifelaidout® and author of "Work Your Money, Not Your Life":
- Consider when you need the money
- Compare your timeline with current CD rates to find the best rates for the closest timeline
Mykail James, MBA, certified financial education instructor, BoujieBudgets.com:
- Have a goal for the money in that CD
- Consider your timeline for the goal, and choose a term length that matches that timeline
How should you decide between a high-yield savings account, money market account, or CD?
Tania Brown, CFP:
- Start off with how much money you want to put in
- Add the level of transactions you plan to have — CDs won't let you touch the money
Sophia Acevedo, Personal Finance Insider:
- A high-yield savings account or money market account are good options for an emergency fund or short-term savings goals
- Money market accounts are worth considering if you want more account accessibility (paper checks, ATM cards, or debit cards)
- CDs could be worthwhile if you don't need access to that money, since they have a fixed interest rate for a specific term
Methodology: How did we choose the best 6-month CDs?
Personal Finance Insider's mission is to help smart people make the best decisions with their money. We understand that "best" is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.
First, we researched to find over 20 banks and credit unions that offered 6-month CDs. Then, we reviewed each institution using our CD rates methodology to find the most-well rounded banking options. For each account, we compared the minimum opening deposits, early withdrawal penalties, and interest rates. We also considered the overall banking experience at each bank by assessing customer support availability, mobile app ratings, and ethics.
6-month CD: Frequently Asked Questions
What is a 6-month CD?
With a 6-month CD, you stash away your money for six months and typically earn a fixed rate. You have the option to renew your CD at the end of the 6-month period, or close the account and pocket the money.
How does a 6-month CD work?
Most CDs lock in your rate for the entire term. If you open a 6-month CD at a 5.00% APY, you'll earn 5.00% for the entire six months. If you renew your CD after it matures, you'll earn the new rate available in six months. There are exceptions to the fixed-rate rule. Some institutions offer variable-rate CDs or CDs that allow your rate to change after a predetermined amount of time.
Which is best: a 6-month, 1-year, or 5-year CD?
Ultimately, your choice will likely depend on how soon you plan to need the money. For example, if you want the money to buy a house in less than a year, a longer term isn't the best idea. Many experts recommend CD laddering. With this strategy, you open multiple CDs with different term lengths so you can take advantage of higher rates with longer terms, but also access some of your money earlier.
Which is better, a 6-month CD or a high-yield savings account?
A CD also locks in your rate for the entire term. If rates are dropping, this could make the CD a better choice, because your savings account APY could decrease over the next few months. If rates are rising, the savings account might be a better fit, because your rate could go up. It also depends on when you'll need to access your money. You should be able to access funds from your savings account regularly — but you'll have to pay a fee if you need access to money from your 6-month CD before it matures.
Which is better, a 6-month CD or a money market account?
Like with a high-yield savings account, you may prefer a money market account over a CD if you want quick access to your money. Money market account rates also fluctuate, so you may prefer a money market account if rates are rising, but a CD if rates are dropping. Still, remember that rates will likely go up or down over a 6-month term.
Is a 6-month CD a good investment?
CDs aren't generally considered investments the same way something like an index fund, which puts your money into the stock market, is. Instead, a CD is typically viewed as a type of savings account, and your potential for losses and gains — your risk — is much more limited. Because the stock market is risky, experts generally don't advise investing money you'll need in the next five years. In the case of a stock market drop, you wouldn't have time to make up your losses. If you need to access your money in six months and want a guaranteed rate of return, a 6-month CD is a better choice than a different type of investment account.
Why it stands out: If you're a resident in Virginia, the might be an appealing option. You could get a competitive interest rate of APY and you'll only need a minimum of to open an account.
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: 90 days of interest
What to look out for: To get the 6-month CD special at Old Point National Bank, visit a local branch. The bank only has branches in the state of Virginia. Something else to keep in mind is that you'll need new money to open the account. New money means funds that haven't already been deposited into an Old Point National Bank account.
Why it stands out: Salem Five Direct, the online division of Salem Five Bank, has a 6-month CD special with a competitive interest rate.
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: 2% of the principal balance withdrawn
What to look out for: Salem Five Direct CDs require a minimum opening deposit of . You'll prefer another financial institution if you'd like to open a CD with less money.
Why it stands out: Bank5 Connect is the online operation of the Massachusetts-based bank Bank5. It has the best 6-month CD rate on our list. You also might like this option if you want a CD with a low minimum opening deposit. You only need to get started.
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: Three months of interest on the amount withdrawn
What to look out for: You won't be eligible to open a Bank5 Connect bank account if you're a resident of Massachusetts or Rhode Island. However, you can open bank accounts at a Bank5 branch.
Why it stands out: You might like America First Credit Union if you prefer credit unions over banks. America First Credit Union has a 6-month certificate with a competitive interest rate. Its certificates also stand out because they have low early withdrawal penalties.
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: 60 days of interest
What to look out for: To open a bank account at a credit union, you must become a member first. You may join America First Credit Union if you live, work, worship, or volunteer in an Arizona, Idaho, Nevada, or Utah county on this list. If you have a family member or spouse that's a current member, you're also eligible.
To become a member, you must also open an .
America First Credit Union Review
Why it stands out: Popular Direct pays a high interest rate, and it compounds interest daily.
APY for 6-month CD: APY
6-month CD early withdrawal penalty: 120 days of simple interest
What to look out for: You'll need at least to open a Popular Direct CD.
Why it stands out: Bask Bank is an excellent option if you'd like to earn a competitive interest rate on a high-yield savings account or CD. Its 6-month term currently pays the highest interest rate.
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: 90 days simple interest
What to look out for: Bask Bank has limited CD terms. If you're looking to open a CD with a term over 2 years, you might prefer another institution.
Why it stands out: First Internet Bank of Indiana pays high interest rates on a variety of CDs.
First Internet Bank of Indiana also has a money market account that's a top pick in our best money market accounts guide.
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: 180 days of interest
What to look out for: First Internet Bank of Indiana compounds your interest monthly, not daily. Depending on how much money is in your CD, this may or may not make a significant difference.
First Internet Bank of Indiana Review
Why it stands out: Quontic Bank could be a good option if you have at least . Most banks usually require at least $1,000 to open a CD. Quontic Bank's most competitive CD rates are on its 6-month and 1-year terms.
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: An amount equal to the interest earned
What to look out for: Quontic Bank charges high penalties if you need to withdraw money before your term ends. If you're worried you'll need to make an early withdrawal, other financial institutions have lower early withdrawal penalties.
Why it stands out: Signature Federal Credit Union could be a good option if you'd like to open a share certificate at a credit union. You'll only need to open an account.
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: 90 days of interest
What to look out for: Credit unions require membership to open an account. The easiest way to become a member is to enroll in the American Consumer Council. Then you'll just need to open a savings account.
Why it stands out: Vio Bank stands out because it pays a competitive interest rate on its 6-month term. You also might like this online bank if you want to open a fixed-interest bank account with a minimum of .
Interest for 6-month CD: APY
6-month CD early withdrawal penalty: 1% of the amount withdrawn, plus $25
What to look out for: Vio Bank has high early withdrawal penalties. Also, keep in mind Vio Bank doesn't have a checking account. If you plan on opening a checking account with the same financial institution, you might prefer one of our other top picks.
Alternative CD options
- : Bethpage Federal Credit Union pays a solid interest rate, but our top picks offer more competitive rates right now.
- : Synchrony pays high rates overall, but its 6-month CD rate falls shorts of the rates on our list.
- : CIT Bank's 6-month CD rate is more competitive than its other CDs, but you'll still find higher elsewhere.
- : Rising Bank pays a pretty good rate, but it only compounds interest every three months. Depending on the amount you deposit, this could make a significant difference in how much you earn.
- : Live Oak pays APY on its 6-month term, but our top picks have even higher interest rates right now.
- : TAB Bank has solid interest rates on CDs, but you can still find more competitive interest rates at other online banks.
- : LendingClub offers high CD rates, but our top picks have lower minimum opening deposits or even more competitive rates right now.
- : Alliant pays solid interest rates on CDs, but its 6-month term pays a lower rate than our top picks.
- : Sallie Mae has a high interest rate, but you'll need a minimum opening deposit of .
- : Marcus lets you open an account with , but our top picks have higher interest rates right now.
- : Ally offers a variety of CDs, but our top picks pay higher interest rates.
- : Capital One has a low minimum opening deposit, but our top picks pay higher interest rates.
- : Nationwide CDs has a solid 12-month CD, but its 6-month CD isn't as strong.
- : TIAA Bank's 6-month CD isn't as strong as its long-term CDs.
- : Citi pays has good rates, but our top picks have even higher interest rates.
- : Navy Federal Credit Union has solid interest rates on long-term CDs, but its short-term CDs aren't as competitive.
- : Discover has competitive interest rates on long-term CDs, but its short-term CDs aren't as strong. You'll also need at least to get a CD.
- : Pentagon Federal Credit Union offers a competitive interest rate, but the early withdrawal penalties are high compared to our top picks.
- : Charles Schwab has brokered CDs, meaning Charles Schwab doesn't actually own the CD. Instead, Charles Schwab acts as the middleman for you and the bank that owns the CD. Depending on how your bank, you may prefer open a CD directly with the financial institution.
- : American Express offers a good interest rate, but our top picks offer even higher rates.
Bank Trustworthiness and BBB Ratings
We've compared each financial institution's Better Business Bureau score. The BBB grades businesses based on factors like responses to customer complaints, honesty in advertising, and transparency about business practices.
Here is each company's score:
| Institution | BBB rating |
| Old Point National Bank | A+ |
| Salem Five Direct | A- |
| Bank5 Connect | A+ |
| America First Credit Union | A+ |
| Bask Bank | B- (Parent company, Texas Capital Bank, has an A+ rating) |
| Popular Direct | A+ |
| First Internet Bank of Indiana | A+ |
| Quontic Bank | A+ |
| Signature Federal Credit Union | None |
| Vio Bank | A+ |
Signature Federal Credit Union doesn't have a BBB score because it hasn't been evaluated by the bureau yet.
Salem Five Direct has an A- rating because it has failed to respond to a customer complaint.
Bask Bank received a B- grade from the BBB because the company has received 28 customer complaints on the website. Its parent company, Texas Capital Bank, has an A+ rating from the BBB.
BBB ratings aren't necessarily the be-all and end-all. To see if a company is right for you, you may also read online customer reviews or talk to current customers.
6-month CD Rates at the Largest US Banks
If you prioritize banking with a company you're familiar with, here are the rates you'll earn on a 6-month CD with some of the most popular institutions:
| Bank | APY (Annual Percentage Yield) | Next steps |
| Citi | ||
| Capital One | ||
| PNC Bank | ||
| TD Bank | ||
| Bank of America | ||
| Chase Bank | ||
| US Bank | ||
| Charles Schwab Bank | ||
| Wells Fargo |
from All Content from Business Insider https://www.businessinsider.com/personal-finance/best-6-month-cd-rates
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