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A certificate of deposit (CD) is a savings vehicle that generally earns higher interest rates than other deposit accounts in exchange for agreeing to deposit money untouched for a specific period. If you have funds that you won't need access to for a set time, opening a CD account could be a solid investment, depending on your savings goals. 

With most CD accounts, you lock in a specific interest rate for the duration of the CD term. Some CDs allow you to raise the rate once or twice during the CD term to help protect against rising rates. 

Five-year CDs offer an opportunity to earn higher interest rates than shorter CD terms. That's because your money is tied up in the account for longer than short-term CDs. Banks typically charge a penalty to access CD funds before their maturity date. There's also a risk of losing out on potential savings growth if the rate environment changes. Here’s a look at several top CD account providers for five-year CDs to consider.

Best Banks for 5-Year CD Accounts

Interest rates can change at any time. The following banks and financial institutions currently have some of the best overall rates on five-year CDs. When choosing a CD, annual percentage yield (APY) is important, but also consider minimum balance requirements, early withdrawal penalties and other account details. 

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All of the accounts featured below are insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Association (NCUA) up to the allowed limits. The current limits are $250,000 per depositor per account per institution or $500,000 for joint accounts.

Ally Bank: 3.90% APY

  • 5-Year CD Rate: 3.90% APY
  • Minimum Deposit: No Minimum
  • Early Withdrawal Penalty: 150 days of interest

Ally Bank offers several CD terms with great rates, but none higher than its five-year CD. Ally's five-year CD currently earns 3.90% APY without requiring a minimum deposit. Early withdrawal penalties on the account are 150 days of interest. 

As a top online bank, Ally makes managing CDs and other accounts easy with online and digital tools like its mobile app. 

Right now, Ally CDs come with a nice 0.05% loyalty bonus when you renew a CD at the end of its term. There are also no monthly maintenance fees to worry about with Ally CDs.

Marcus by Goldman Sachs: 3.60% APY

  • 5-Year CD Rate: 3.60% APY
  • Minimum Deposit: $500
  • Early Withdrawal Penalty: 180 days of interest

Marcus is an online bank offering several competitive deposit accounts, including high-yield savings accounts. CD terms range from six months to six years. A $500 minimum deposit is required to open a CD through the online bank. 

Marcus by Goldman Sachs High-Yield Certificates of Deposit

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Marcus by Goldman Sachs offers some of the strongest CD rates currently available, as well as an impressive array of term lengths. With maturities ranging from six months to six years, as well as three no-penalty options, most people should be able to find a CD that works for their individual needs. Marcus CDs also feature a relatively low minimum opening deposit of $500, and once funded, new CDs are backed by a 10-Day Rate Guarantee.

Overview

Marcus by Goldman Sachs offers competitive CD rates on term lengths ranging from six months to six years. Additionally, Marcus offers several no-penalty CDs that allow flexible access to your money without the worry of early withdrawal penalties. The $500 minimum opening deposit is lower than what many of Marcus’ competitors require.

One of Marcus’ standout features is its 10-Day CD Rate Guarantee. As long as you deposit the minimum required amount within 10 days of account opening, you’re entitled to the highest published rate during that period.

Pros

  • Strong interest rates
  • New deposits backed by 10-Day CD Rate Guarantee

Cons

  • Minimum opening deposit required

Marcus CDs come with a 10-day CD rate guarantee, which allows you to earn the highest interest rate offered between account opening and account funding, up to 10 days. 

Quontic Bank: 3.00% APY

  • 60-Month CD Rate: 3.00% APY
  • Minimum Deposit: $500 
  • Early Withdrawal Penalty: two years of interest

Quontic Bank offers several CD terms from six to 60 months, all with competitive interest rates. Interest on CDs compounds daily. While Quontic Bank's early withdrawal penalties are slightly steeper than some of the other options on this list, if you're sure you won't need the funds you deposit for the full term length, its an undeniably valuable option.

Quontic Bank Certificates of Deposit

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  • Our Rating 3/5 How our ratings work
  • Minimum
    Deposit Required    $500
  • 1 Year APY4.00%
  • 3 Year APY3.25%
  • 6-Month APY4.25%

Quontic CDs typically offer a pretty solid APY, especially for 12-month terms. However, Quontic’s early withdrawal penalties are notably steep compared to competitors.

Overview

Quontic Bank’s certificates of deposit are competitive with many of the best CD rates currently offered. While the minimum opening deposit is also relatively low, it’s worth noting that Quontic’s early withdrawal penalties are on the steep side.

Pros

  • Strong interest rates
  • Relatively low minimum opening deposit

Cons

  • Harsh penalties for early withdrawal
  • No no-penalty option

Discover: 3.40% APY

  • 5-Year CD Rate: 3.90% APY
  • Minimum Deposit: $2,500
  • Early Withdrawal Penalty: 18 months of interest

Discover is a full-service online bank known for its competitive deposit accounts, credit cards and lack of fees. The online bank offers flexible CD terms from three months to 10 years. Discover's five-year CD currently earns 3.40% APY and carries a $2,500 minimum deposit requirement and monthly fees. 

Discover Certificates of Deposit

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Despite the steep minimum opening deposit requirement, Discover Bank's certificates of deposit are competitive with the best CD rates currently available. And with maturities ranging from three months to 10 years, it's easy to find a term length that works for your specific savings plan. It's worth noting that some of Discover's strongest rates are on par with what you'd get from the best online banks.

Overview

Discover CDs include a healthy variety of options, with term lengths as short as three months and as long as 10 years. This spread makes it easier to take advantage of CD laddering, which involves spreading your deposits across accounts with varying maturities, so you can enjoy the higher rates with longer terms without locking up all of your money for so long. To open a CD with Discover, you’ll need a minimum opening deposit of $2,500. This is more than what a lot of other banks require, but Discover’s rates are nonetheless competitive with online-only banks, and, in most instances, more than you’ll earn with traditional banks.

Pros

  • Strong interest rates for terms of one year or more
  • Wide range of maturities

Cons

  • Interest rates are the same for many of the longer terms

American Express: 4.25% APY

  • 5-Year CD Rate: 4.25% APY
  • Minimum Deposit: No Minimum
  • Early Withdrawal Penalty: 365 days of interest

American Express is home to online CDs with terms ranging from 12 months to five years. CDs carry no minimum deposit requirements and no monthly maintenance fees. 

American Express Certificates of Deposit

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With interest rates well above average and no minimum opening deposit requirement, a certificate of deposit from American Express could be an excellent deal for your needs. So long as you're interested in a CD term that offers a higher APY, you could potentially earn hundreds or thousands of dollars with an American Express CD.

Overview

American Express offers CDs ranging from one to five years in length. While some term lengths offer rather unimpressive APYs, its one, two and five year CDs are all undeniably solid. Plus there’s no minimum opening deposit required with any of American Express’ CDs.

Pros

  • Competitive rates for 1, 2 and 5 year CDs
  • No minimum opening deposit requirement

Cons

  • Some rates well below average
  • Lacks no-penalty option

Currently, American Express five-year CDs earn an impressive 4.25% APY to help grow your savings. Interest earned on American Express CDs compounds daily and is deposited monthly. 

Synchrony: 4.00% APY

  • 5-Year CD Rate: 4.00% APY
  • Minimum Deposit: No Minimum
  • Early Withdrawal Penalty: 365 days of interest

Synchrony Bank offers several ways to build up savings, including high-yield savings and money market accounts. The bank also offers an impressive range of CD terms from three months to six years. Currently, Synchrony's five-year CD earns 4.00% APY. 

Synchrony Bank Certificates of Deposit

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  • Our Rating 5/5 How our ratings work
  • Minimum
    Deposit Required    $0
  • 1 Year APY4.00%
  • 3 Year APY3.75%
  • 9 Months APY4.30%

Synchrony Bank offers some of the most flexible CD options currently available. With terms ranging from three months to five years, as well as a Bump-Up CD and No-Penalty CD option, there's likely a certificate of deposit in Synchrony's roster that lines up with your needs. Additionally, none of Synchrony's CDs require a minimum opening balance, which is remarkably rare (many of the best CD rates require a minimum deposit of $1,000 or more). Across the board, Synchrony offers higher rates than most traditional banks, and some even outpace the best online banks' rates. All this makes Synchrony CDs an easy recommendation.

Overview

Synchrony Bank offers CD terms ranging from 3 months to 60 months, and across the board its rates are some of the highest currently available. While it only offers one No-Penalty CD and one Bump-Up CD, both are competitive in their respective areas. Another major perk of Synchrony CDs is the lack of a minimum opening deposit requirement; many CDs with comparable rates require you to commit to $1,000 or more, which make Synchrony’s CDs remarkably accessible by comparison.

Pros

  • Strong interest rates on some term lengths
  • No minimum deposit requirement
  • Strong bump-up CD option

Cons

  • Only offers terms of up to 60 months
  • No-penalty CD rate is very low

If you're not sure you want to lock up your money long-term, Synchrony offers more flexible options, including a No-Penalty CD and a Bump-Up CD.

Capital One: 3.50% APY

  • 5-Year CD Rate: 3.50% APY
  • Minimum Deposit: No Minimum
  • Early Withdrawal Penalty: 6 months of interest

If you're looking for full-service banking online, Capital One offers a myriad of accounts and services, including 360 CDs. There's no minimum deposit required to open an account and CD terms range from six months to five years. 

Capital One 360 Certificates of Deposit

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Capital One offers some of the strongest interest rates currently available; with terms ranging from six months to five years, few other banks can compete with its CD rates. What's more, Captial One CDs are more accessible than many of its competitors' offerings. There's no minimum opening balance requirement for any of its CDs, and its early withdrawal penalties are relatively lenient, especially for longer term lengths.

Overview

With no minimum opening deposit requirement and a range of maturities spanning six months to five years, Capital One’s CDs are remarkably accessible to anyone who wants to maximize interest on their savings. Additionally, Capital One’s early withdrawal penalties are less punitive than many of its competitors. For terms of 12 months or less, the penalty is three months of interest; for terms of more than 12 months, the penalty is six months of interest.

Pros

  • Strong interest rates
  • No minimum balance requirement
  • Relatively lenient early withdrawal penalties

Cons

  • Lacks no-penalty CD option

Capital One five-year CDs currently earn 3.50% APY. Account holders have the option to receive interest payments monthly, annually or at the end of the term. 

Best 5-Year CD Rate: Bottom Line

Opening a five-year CD can help build up your savings as long as the interest rate environment doesn't change, causing you to miss out on higher rates. Only deposit funds into a five-year CD that you won't need to access for the next half-decade. If you need to withdraw funds before the maturity date, you'll end up paying a penalty that can undermine your savings efforts.  

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Shop around for the best rates, paying attention to other factors including your individual banking needs, financial situation and minimum deposit requirements.

5-Year CDs: Frequently Asked Questions

  • A certificate of deposit (CD) is a timed deposit account that earns a fixed interest rate for a specific period, in this case, five years (or 60 months). Five-year CDs are generally the longest CD term offered, although some banks offer CD terms as long as 10 years. 

  • With longer time restrictions, a five-year CD is ideal for savers who don't need access to deposited funds for the next half-decade.

  • CDs come with fixed interest rates good for the length of the CD term. You'll earn guaranteed returns long as you keep your funds in the account for the whole term. The only way a five-year CD can lose value is if you withdraw funds and end up paying an early withdrawal penalty or if the rate environment causes you to lose out on more competitive interest rates.

  • Banks and credit unions typically charge a penalty for withdrawing funds from a CD account before it reaches maturity. Penalties are generally a portion of the interest earned on the account, cutting into your savings.

  • The Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA) both provide insurance to protect your deposits. The FDIC insures bank deposits while the NCUA insurance deposits at credit unions. Both government-backed options provide insurance up to $250,000 per depositor, per account ownership category.

  • CDs generally earn higher interest rates than traditional savings accounts in exchange for keeping funds tied up in your bank for a set period. The better option typically depends on your banking needs and whether you can leave funds untouched in an account long term. Some high-yield savings accounts offer competitive rates comparable to CDs while keeping your money more accessible. If you don't need access to the funds, a five-year CD may earn better returns than a savings account. You can also choose a midrange CD term, which doesn't tie up funds as long while still earning a competitive rate.

  • What you can do with a CD when it reaches maturity often depends on the bank or credit union. Options often include renewing the CD, rolling over the funds into a new CD with a different rate and term or withdrawing the funds and closing the CD account. Banks usually offer a grace period after a CD reaches maturity for account holders to decide on what to do with the CD balance.

KP

Kevin Payne

Kevin Payne is a personal finance, credit card, and travel writer. He is the family travel and budget expert behind FamilyMoneyAdventure.com. Kevin lives in Cleveland, Ohio, with his wife and four kids. His work has appeared on several websites, including FinanceBuzz, Credit Karma, Millennial Money, Club Thrifty, Student Loan Planner and Slickdeals.