Best CD Rates in Arizona (2026), Top APYs + Low Flat-Tax Math
TL;DR: Top nationally available CD APYs open to Arizona residents on September 25, 2026 are 4.35-4.50% on 1-yr terms and 4.35-4.50% on 5-yr terms (DepositAccounts). Arizona's 2.5% flat state tax (one of the lowest in the country) means CDs work much better here than in CA or NY. But A-rated 5-year MYGAs at 5.50-6.05% (public carrier rate sheets, October 14, 2026) still beat CDs by roughly 110-125 bps/year after tax for 3+ year retiree horizons. CDs win for short-term liquidity and emergency reserves.
| Product | APY / yield | Source, as of |
|---|---|---|
| Top nationally available 1-year CDs | 4.35-4.50% | DepositAccounts, updated 9/25/2026 |
| Top nationally available 5-year CDs | 4.35-4.50% | DepositAccounts, updated 9/25/2026 |
| Marcus 12-mo / 5-yr | 3.90% / 4.35% | marcus.com, 9/24/2026 |
| Ally 12-mo / 5-yr / No-Penalty 11-mo | 4.15% / 4.10% / 2.70% | ally.com, 9/24/2026 |
| Synchrony 12-mo / 60-mo | 4.10% / 4.35% | synchrony.com, 9/24/2026 |
| U.S. Treasury par yield, 1-yr / 5-yr | 4.50% / 4.98% | treasury.gov, 9/25/2026 |
| A-rated 5-year MYGAs (benchmark) | 5.50-6.05% | public carrier rate sheets, 10/14/2026 |
Local credit union rates were not re-checked for this update and have been removed from the table; check their rate sheets directly.
CD vs MYGA, after tax
What $100,000 earns in 5 years: CD vs MYGA, after tax
Rates used: CD 5.00%, the top nationally available 5-year CD (Bankrate, October 14, 2026); change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).
| CD, interest taxed every year | $121,081 |
|---|---|
| MYGA, tax-deferred, before tax | $133,507 |
| MYGA after paying tax on all the interest at withdrawal | $126,136 |
| Tax deferral alone adds about | $674 |
| MYGA ahead of the CD, after tax | $5,055 |
Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge. In an IRA both grow tax-deferred, so the edge there is the rate alone. Bank and credit union deposits are FDIC or NCUA insured up to the limits; a MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.
Best CD rates open to Arizona residents (checked September 25, 2026)
| Bank/CU | Term | APY | Min | Type / source |
|---|---|---|---|---|
| HAB Bank | 1 yr | 4.50% | $1,500 | Online, nationwide (DepositAccounts 9/25/2026) |
| EagleBank | 1 yr | 4.45% | $1,000 | Online, nationwide (DepositAccounts 9/25/2026) |
| Sallie Mae Bank | 1 yr | 4.20% | $2,500 | Online bank (salliemae.com 9/24/2026) |
| Ally Bank | 1 yr | 4.15% | $0 | Online bank (ally.com 9/24/2026) |
| Synchrony Bank | 1 yr | 4.10% | $0 | Online bank (synchrony.com 9/24/2026) |
| Marcus by Goldman Sachs | 1 yr | 3.90% | $500 | Online bank (marcus.com 9/24/2026) |
| Popular Direct | 3 yr | 4.50% | $10,000 | Online, nationwide (DepositAccounts 9/25/2026) |
| Marcus by Goldman Sachs | 3 yr / 5 yr | 4.35% | $500 | Online bank (marcus.com 9/24/2026) |
| Bread Savings | 5 yr | 4.50% | $1,500 | Online bank (DepositAccounts 9/25/2026) |
| Ally Bank | 5 yr | 4.10% | $0 | Online bank (ally.com 9/24/2026) |
Rates expire like milk.
The best MYGA, CD and savings rates change every few weeks. Get a short email when a rate on this page changes.
We’ll email you when a rate on this page changes. Hans Goldstein · NPN 20602398.
Rather talk it through? Or book 15 minutes on Hans’s calendar.
Arizona CD tax treatment
CD interest in Arizona is taxed at:
- Federal ordinary income (10-37% marginal)
- Arizona state tax: 2.5% flat (lowest among states with income tax)
- NIIT 3.8% if AGI > $200K single / $250K joint
For a typical AZ retiree in the 22% federal bracket, a 4.50% CD nets ~3.40% after combined federal + AZ tax. For a CA resident at 33.3% combined, the same CD nets only ~3.00%.
Worked example: AZ CD vs MYGA
Arizona retiree, 22% federal + 2.5% AZ + no NIIT = 24.5% combined. $100K, 5 years.
| Vehicle | Gross rate | Year 5 after-tax value | After-tax CAGR |
|---|---|---|---|
| 5-yr CD (Bread Savings 4.50%) | 4.50% | $118,182 | 3.40% |
| 5-yr Treasury (4.98% par, 9/25/2026; AZ-tax exempt) | 4.98% | $120,991 | 3.88% |
| 5-yr A-rated MYGA (benchmark low) | 5.50% | $124,586 | 4.49% |
| 5-yr A-rated MYGA (benchmark high) | 6.00% | $125,536 | 4.65% |
AZ MYGA edge over the top 5-yr CD: +$6,404 to +$7,354 on $100K over 5 years (MYGA interest taxed once at year 5; CD taxed yearly; Treasury taxed federally only).
When AZ CDs make sense
- Emergency reserve (3-12 months): A high-yield savings account (Sallie Mae 3.85% on 9/24/2026) currently beats Ally's 11-month No-Penalty CD (2.70%) for full liquidity.
- Sub-1-year horizons: 1-yr CDs at 4.35-4.50% (top national, 9/25/2026) fill the gap MYGAs don't cover.
- Pre-59½ retirees with planned pre-59½ withdrawals: Avoid 10% federal MYGA early-withdrawal penalty.
- Under $25K: One CD is simpler to manage than picking a MYGA carrier.
AZ credit unions to consider
- Desert Financial Credit Union: Phoenix area, large statewide presence.
- OneAZ Credit Union: Statewide, originally for state employees but now open membership.
- Arizona Federal Credit Union: Phoenix, competitive CDs.
- Vantage West Credit Union: Tucson-based.
- Mountain America Credit Union: UT/AZ/NV/ID/NM service area.
Related Arizona guides
- Arizona snowbird cash allocation
- Best Arizona MYGA rates
- Arizona retiree MYGA strategy
- AZ guaranty fund
Arizona CD vs MYGA, second opinion before you lock in
Talk to Hans Goldstein, a licensed independent insurance producer.
Most Arizona savers shopping CDs in 2026 are also a candidate for a MYGA, same lock-up logic, higher rate, deferred tax. A 5-minute call clarifies which fits your bracket and liquidity needs.
Send your details, get a side-by-side: best Arizona CD rates vs current MYGA rates, after-Arizona-tax, with the math written out.
Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
We’ll email it to you. Hans replies within one business day. Privacy Policy.
Frequently asked questions
What is the best CD rate in Arizona?
As of September 25, 2026, the top nationally available 1-year CDs pay 4.35-4.50% APY and top 5-year CDs pay 4.35-4.50% (DepositAccounts). Online banks such as HAB Bank, Bread Savings, Sallie Mae and Marcus lead; check AZ credit unions (Desert Financial, OneAZ, Arizona Federal) directly for their current certificate specials.
Does Arizona tax CD interest?
Yes, at the 2.5% flat state rate. This is much lower than CA (9.3-13.3%) or NY (4-10.9%). CD interest in AZ nets meaningfully better than in high-tax states but slightly worse than in zero-tax states (TX/FL/NV).
Are AZ credit union CDs competitive?
Yes, Desert Financial Credit Union, OneAZ Credit Union, and Arizona Federal Credit Union can run certificate specials; compare their current rate sheets to the 4.35-4.50% national top. NCUA insures up to $250K.
Should AZ retirees use CDs or MYGAs?
For 3+ year horizons, MYGAs almost always win, by roughly 110-125 bps/year after AZ tax at September 2026 rates for typical retiree brackets. For sub-1-year liquidity and emergency reserves, CDs make more sense.
What's the FDIC limit on AZ CDs?
$250,000 per depositor per FDIC-insured bank per ownership category, same federal limit as every state.
Should I open a CD at a local AZ bank or online?
Either works. Online banks (Marcus, Ally, Synchrony) typically offer 20-40 bps higher APYs than local AZ banks. Local banks may offer relationship perks. AZ credit unions sit between the two.
Are AZ CDs better for snowbirds than CDs in their summer state?
Tax treatment follows legal domicile. If you're an AZ-domiciled snowbird, AZ's 2.5% flat tax applies to CD interest regardless of which bank issued it. Online banks are accessible from anywhere, so location of CD doesn't matter, just your legal residence.
Disclosure
This guide reflects publicly available rate, tax, and state-guaranty-fund information as of the date stated above. MYGA rates, CD rates, state tax brackets, and guaranty-fund limits change frequently, always confirm current values against the most recent carrier disclosure, bank rate sheet, and your state guaranty association's official website before purchasing. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product, and is not tax advice. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers; appointment status with any specific carrier discussed may vary. No compensation has been received from any carrier or bank in connection with publication of this review. Always read the actual contract and consult a licensed advisor and tax professional before purchasing any annuity or CD. AM Best ratings, state tax law, and IRC tax treatment are subject to change.