What is the highest CD rate available?

Top CD rates in 2026 are around 4.50-4.85% APY for terms of 6-18 months, generally from online banks and credit unions. Brick-and-mortar branch banks typically pay 1-2 percentage points less.

Are CDs better than MYGAs?

CDs win for money needed within 1-2 years, deposits under $5,000, or where federal FDIC backing is the priority. MYGAs win on rate (typically 100-150 basis points higher) and tax-deferral for money set aside 3+ years.

What is the early withdrawal penalty on a CD?

Most CDs charge 3-6 months of interest as a penalty for early withdrawal. The exact penalty depends on the bank and the term length.

CD Rates Independent — no carrier-paid placement Updated: monthly

Best CD Rates 2026

Best CD Rates 2026

If you're parking money in a CD for 12 months or longer, you should also know about MYGAs — Multi-Year Guaranteed Annuities. They're the closest thing to a "CD with a higher rate and tax deferral" that exists, and most CD shoppers don't know they're an option.

First, the CD rates. Then the comparison.

Current best CD rates (mid-2026 illustrative)

Term	Top APY	Min Deposit
6-month	on request	$500
1-year	on request	$500
18-month	on request	$500
3-year	on request	$1,000
5-year	on request	$1,000

Top-rate CDs are typically at online banks (Marcus, Ally, Discover, Synchrony, Capital One 360) and credit unions. Brick-and-mortar branch banks pay 1-2% less for the convenience of a local branch.

What you give up to chase rate

Lock-in. Take it out early, pay 3-6 months of interest as penalty.
Annual tax drag. CD interest is taxed every year, even if you don't withdraw it.
No tax-deferral. Inside an IRA this doesn't matter. Outside an IRA, you lose ~20-32% of the interest annually to taxes.

When the MYGA beats the CD

	5-Year CD	5-Year MYGA
Current top rate	~4.10%	~5.50%
Tax treatment	Annual	Tax-deferred
Free withdrawal	None	Usually 10%/year
Backing	FDIC ($250K)	State Guaranty (~$250K)
At maturity	Cash out (taxable outside IRA)	Cash out, roll tax-free, or annuitize

For a 60-year-old in the 24% bracket with $100,000 of taxable savings parked for 5 years:

CD nets ~$116,800 after annual tax drag
MYGA nets ~$123,300 after deferred tax at maturity
MYGA wins by ~$6,500 on the same $100K

Full math: Annuity vs CD →

When to stay with the CD anyway

Three cases where I tell clients not to bother with a MYGA:

The money might be needed within 1-2 years. MYGA surrender charges are 8-9% in year 1.
Under FDIC limit AND federal backing matters more than rate. CDs are federally insured; MYGAs are state-guaranteed.
Small deposit (under $5K). Most top MYGAs have $10K minimums.

What about CD ladders?

A CD ladder spreads deposits across multiple maturities for blended liquidity and rate. The same strategy works with MYGAs — usually better, because top MYGA rates are higher and most MYGAs allow 10%/year penalty-free withdrawal already.

Typical hybrid I recommend: 30% in a high-yield savings (instant), 30% in a 3-year MYGA, 40% in a 5-year MYGA. Beats any pure CD ladder on rate AND has built-in 10%/year liquidity at each rung.

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*Hans Goldstein is an independent insurance broker, NPN 20602398. CD rates illustrative as of publication. CDs are bank products insured by FDIC; annuities are insurance products backed by issuing carriers and state guaranty associations.*

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