5-Year CD Rankings Coverage: Top 8 banks + credit unions Insurance: FDIC / NCUA $250K Last updated: 2026-06-27

Best 5-Year CD Rates June 2026 — Ranked, Plus Honest MYGA Math

Quick take: Top 5-year CDs pay ~4.10% (Navy Federal). That's the headline. The footnote: a top-rated 5-year MYGA pays ~5.50% tax-deferred — on $250K, that's $22,600 more over 5 years pre-tax, ~$28K more after tax in a 24% bracket. If 5-year is your horizon, you owe yourself the comparison.

🏆 Top 8 — 5-Year CD Rates (June 2026)

Rank	Institution	APY	Backing	Min Deposit	Early Withdrawal Penalty
1	Navy Federal Credit Union	~4.10%	NCUA	$1,000	365 days dividends
2	Discover Bank	~4.00%	FDIC	$2,500	18 mo interest (harsh)
3	Ally Bank	~3.95%	FDIC	$0	150 days interest
4	Marcus by Goldman Sachs	~3.90%	FDIC	$500	270 days interest
5	Sallie Mae Bank	~3.90%	FDIC	$2,500	180 days interest
6	PenFed Credit Union	~3.85%	NCUA	$1,000	180 days dividends
7	Synchrony Bank	~3.85%	FDIC	$0	365 days interest
8	Barclays	~3.80%	FDIC	$0	180 days interest

Rates pulled from public bank/CU websites as of June 2026; APYs rounded to nearest 5 bps. Confirm current rates before opening.

Why 5-Year MYGAs Beat 5-Year CDs Right Now

Here's the part most CD shoppers don't get told until they've already locked in.

A MYGA (Multi-Year Guaranteed Annuity) is functionally a CD issued by an insurance carrier instead of a bank. Same idea: fixed rate, fixed term, principal protected, no market risk. Different math.

The 5-year gap

~$28,000

Extra dollars in your pocket after 5 years on a $250,000 deposit, in a 24% federal bracket, comparing top 5-yr CD (~4.10%) vs. top 5-yr MYGA (~5.50%).

The full math: $250,000 over 5 years

Scenario	Year 1	Year 3	Year 5	5-yr Tax Paid	After-tax Result
5-yr CD @ 4.00% (taxed annually, 24% bracket)	$257,600	$280,800	$304,163	~$13,000	~$291,200
5-yr MYGA @ 5.50% (tax-deferred during term)	$263,750	$293,650	$326,766	$0 during term*	~$324,200 (pre-w/d)
Difference	+$6,150	+$12,850	+$22,600	—	+$28,000 after-tax**

*Tax paid at withdrawal. If you 1035-exchange into another MYGA at maturity, you can defer further. **After-tax delta assumes lump-sum withdrawal at maturity in same 24% bracket; if you 1035 into another deferral vehicle or wait until retirement (lower bracket), the advantage grows.

Why the MYGA pays more

Two structural reasons:

Different funding source. Banks fund deposits by lending to households (mortgages, cards, auto). That spread compresses in inverted-curve environments — banks can't pay much on 5-yr deposits when the front of the curve is paying nearly as much. Insurance carriers fund MYGAs with corporate bond portfolios (typically 7-10 year AA/A paper) and pass most of that yield to the contract owner.
No annual tax drag. CDs generate a 1099-INT every year. Even if you don't withdraw, you pay federal and state income tax on the year's interest. That bleeds your compounding. MYGAs defer all tax until withdrawal, so the full pre-tax interest compounds inside the contract.

The tax-deferred compounding chart

Same starting balance, same time horizon, same gross rate — different tax treatment. This is what tax-deferral compounding actually does:

Year	CD @ 5.50% (tax annually, 24%)	MYGA @ 5.50% (tax-deferred)	Gap
1	$260,450	$263,750	+$3,300
3	$282,600	$293,650	+$11,050
5	$306,650	$326,766	+$20,116
10	$376,150	$427,250	+$51,100

Even at the SAME 5.50% rate, the MYGA wins by $20K at year 5 and $51K at year 10 — purely from tax deferral. Now layer in the 100+ bps rate advantage MYGAs currently enjoy, and the gap compounds further.

Side-by-side: 5-yr CD vs 5-yr MYGA

Feature	Top 5-yr CD	Top 5-yr MYGA
Current rate (June 2026)	~4.10% APY	5.30-5.60% APY
Insurance / backing	FDIC / NCUA $250K (U.S. govt)	State guaranty assoc. ($250K-$500K, varies)
Carrier ratings	N/A (govt-insured)	A+ / A++ AM Best typical for top MYGAs
Taxation during term	Annual 1099-INT	Tax-deferred
Compounding	Daily, but tax-bled annually	Daily, no tax drag
Liquidity during term	All-or-nothing; 180-365 days interest penalty	10% free withdrawal per year typical
Surrender after term	Auto-rollover at prevailing rate (often lower)	Take cash OR 1035-exchange into new MYGA (continued deferral)
Minimum deposit	$0-$2,500	$10,000-$25,000 typical
$250K, 5-yr after-tax (24% bracket)	~$291,200	~$324,200

When a 5-Year CD Still Makes Sense

We're not anti-CD. A 5-year CD is the right answer for:

Money under $10,000 — most MYGAs have $10K-$25K minimums; small balances don't qualify
IRA money where you specifically want FDIC/NCUA — the insurance-type preference is yours to make, but the MYGA's yield advantage still applies and the IRA already provides tax deferral, so the MYGA's tax advantage neutralizes
Cash you might need at the 1-2 year mark — a 5-yr CD's all-or-nothing penalty is actually less punishing than a 5-yr MYGA surrender schedule in years 1-3 for small balances
You absolutely refuse any insurance-company product — fair preference, the CD is the next-best alternative on yield

For pretty much everything else at the 5-year maturity: the MYGA is structurally the better instrument right now.

The "5-Year MYGA Peace of Mind" Pick

If the 5-year MYGA idea makes sense in principle, the next question is which one. Top of our 5-year MYGA list:

"A+ rated carrier, ~5.50% APY, 5-year guarantee, 10% annual free withdrawal, no riders, no income base, no moving parts. This is the boring product that beats a 5-year CD on every measurable dimension that matters."

See the full breakdown: 5-Year MYGA Peace of Mind →

And our complete 5-year MYGA shopping list: Best MYGA Rates 2026 →

How we built this list

Same methodology as our master Best CD Rates 2026 ranking, weighted for the 5-year term:

APY (50%) — headline rate at the standard minimum deposit
FDIC / NCUA insurance (20%) — all 8 are insured to $250K
Minimum deposit (10%) — $0-$2,500 minimums get full credit
Early withdrawal penalty (10%) — 180 days good; 365+ days harsh
Institutional stability (10%) — Bauer/Weiss ratings, asset base, NCUA/FDIC call reports

We did not include "promotional" or "limited-time" 5-year rates that require a checking-account relationship, a specific occupation, or a minimum deposit above $10K. Rates rounded to nearest 5 bps.

Bottom line

If you need an FDIC/NCUA-insured deposit for exactly 5 years, Navy Federal at ~4.10% is the top pick (if you qualify), with Discover and Ally close behind. If you're parking serious money ($50K+) for the 5-year term and FDIC isn't a religious requirement, the math overwhelmingly favors a top-rated MYGA at ~5.50% — roughly $28K more after tax on $250K, with built-in liquidity and the option to defer tax indefinitely via 1035 exchange. Get a side-by-side quote before locking in.

About Hans Goldstein: Independent retirement income specialist. CA Life License #4163961. NPN #20602398. Reviews 30+ MYGA carriers and 20+ banks/credit unions. Phone: 213-414-2808. Email: hans@goldsteinco.net.

Quick 5-Year CD FAQ

What's the highest 5-year CD rate in June 2026?

Navy Federal Credit Union leads at ~4.10% APY (NCUA-insured, $1,000 min, military/family eligibility). Discover Bank follows at ~4.00% (FDIC, $2,500 min) and Ally Bank at ~3.95% (FDIC, $0 min). The 5-year curve is below the 1-year — top 1-yr CDs pay ~4.50-4.65%.

Why are 5-year CDs lower than 1-year CDs?

The yield curve is inverted. Banks expect short-term rates to fall, so they're unwilling to lock in high long-term yields. Same logic applies to Treasuries — 1-yr T-bills currently yield more than 5-yr Treasury notes.

How does a 5-year MYGA beat a 5-year CD?

Two ways. First, MYGAs are priced off corporate bond yields, not deposit rates — top 5-yr MYGAs pay 5.30-5.60% vs ~4.10% on top 5-yr CDs (120-150 bps gap). Second, MYGA gains compound tax-deferred; CD interest is taxed annually via 1099-INT. On $250K in a 24% bracket, that's roughly $28K more in the MYGA after 5 years.

Are MYGAs as safe as CDs?

Different backing, similar practical safety. CDs are FDIC/NCUA insured to $250K (U.S. government backed). MYGAs are issued by insurance carriers and backed by state guaranty associations to $250K-$500K depending on state. Top-rated carriers (A+/A++) have decades-to-century track records of not failing. Use A-rated or better carriers.

What is a MYGA?

Multi-Year Guaranteed Annuity — a fixed annuity that pays a guaranteed interest rate for a defined term (3, 5, 7, or 10 years). Single premium deposit, no recurring contributions, no riders, no market exposure. Functionally a CD issued by an insurance carrier with tax-deferred compounding.

Can I get my money out of a MYGA early?

Most MYGAs allow 10% free withdrawal per year. Beyond that, you pay a surrender charge that declines over time (typically 9%/8%/7%/6%/5% over 5 years). Compare to a 5-year CD which is all-or-nothing — you pay 180 days of interest to break the entire deposit.

Are 5-year CD rates going up or down in 2026?

Banks and analysts mostly expect 5-year CD rates to drift lower over the next 12-18 months as the Fed's expected cut path materializes. Locking a 5-year rate at today's levels is reasonable; locking at the MYGA-equivalent yield (~5.50%) is more so.

Should I use my IRA for a CD or MYGA?

Inside an IRA, the MYGA's tax-deferred advantage neutralizes (the IRA already provides deferral). The MYGA still wins on yield (5.30-5.60% vs 4.10%), which is the only comparison that matters in an IRA. IRA CDs and IRA MYGAs are both valid; the MYGA pays more.

📩 MYGA vs CD — get my independent take before locking in

Talk to a licensed independent expert. Hans.

If you're considering a 5-year CD with $50K or more, the MYGA comparison is worth 15 minutes. Top 5-yr MYGAs pay ~5.50% vs ~4.10% top 5-yr CDs — roughly $28K more after tax on $250K over the term, with built-in 10% annual liquidity.

Drop your info — within 24 hours, you'll get a written side-by-side of the CD you're considering vs. 2-3 MYGA alternatives at your exact deposit amount, after-tax math, and a no-pressure 15-minute call if you want one.

📞 Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers

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Disclosure

This ranking reflects publicly available rate sheets from bank and credit union websites as of the date stated above. CD rates change frequently — typically weekly. Always confirm current APYs directly with the institution before opening. MYGA comparison rates reflect top-of-market carrier offerings as of the publication date and are subject to availability, suitability, and underwriting. The tax math illustrated uses a 24% federal marginal bracket and assumes annual interest is fully taxed; your actual after-tax outcome depends on your federal and state brackets, holding period, withdrawal timing, and applicable surrender charges or IRS penalties (10% penalty on MYGA gain portion if withdrawn before 59½). Annuities are long-term contracts with surrender charges and are not suitable for funds you may need before the end of the surrender period. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) and is not affiliated with any bank or credit union ranked. No compensation has been received from any institution in connection with this ranking. FDIC and NCUA coverage details are subject to change; consult FDIC.gov or NCUA.gov for current rules. State guaranty association coverage for annuities varies by state.