Best CD Rates in California (2026) — Top APYs + After-Tax Math
TL;DR: The best CD APYs available to California residents in June 2026 are 4.50-4.90% on 1-5 year terms. But California's 9.3-13.3% marginal state tax cuts deeply into CD yield, since CD interest is fully state-taxable (unlike Treasuries, which are CA-state-exempt). For most California savers in the 9.3%+ bracket, a 5-year MYGA at 5.60% or a 1-year Treasury at 4.30% beats the best CD after-California-tax.
Best California CD rates (June 2026)
Rates as of mid-June 2026 from FDIC- or NCUA-insured institutions. APYs change weekly. Always verify at the bank's website before opening.
| Bank/CU | Term | APY | Min | Type |
|---|---|---|---|---|
| Marcus by Goldman Sachs | 1 yr | 4.80% | $500 | Online bank |
| Ally Bank | 1 yr | 4.70% | $0 | Online bank |
| Synchrony Bank | 1 yr | 4.85% | $0 | Online bank |
| Capital One 360 | 1 yr | 4.60% | $0 | Online bank |
| SchoolsFirst FCU | 2 yr | 4.70% | $500 | CA credit union |
| Patelco Credit Union | 2 yr | 4.65% | $250 | CA credit union |
| Marcus | 3 yr | 4.55% | $500 | Online bank |
| Ally Bank | 5 yr | 4.50% | $0 | Online bank |
The California CD tax problem
CD interest is taxed in three places for California residents:
- Federal income tax (10-37% marginal)
- California state income tax (1-13.3% marginal)
- NIIT (3.8% if AGI > $200K single / $250K joint)
For a California resident in the 24% federal + 9.3% state bracket, every $1,000 of CD interest costs ~$333 in tax — so a 4.80% CD nets ~3.20% after-tax. Held in a taxable account, that's the real return you can compare against alternatives.
Worked example: California CD vs Treasury vs MYGA
$100,000 deposit, 5-year horizon, California resident, 24% federal + 9.3% CA + assume no NIIT.
| Vehicle | Gross yield | State tax? | After-tax yield | 5-yr ending value |
|---|---|---|---|---|
| 5-yr CD (Ally) | 4.50% | Yes (9.3%) | 3.00% | $115,927 |
| 5-yr Treasury | 4.30% | No (CA exempt) | 3.27% | $117,452 |
| 5-yr MYGA (Athene) | 5.60% | Deferred | ~4.40% eff. | $121,790* |
*MYGA value assumes annual compounding tax-deferred + lump-sum withdrawal in year 5 at 33.3% combined rate. Effective after-tax yield depends on withdrawal strategy.
For a California resident, the MYGA wins by ~$5,860 over the CD over 5 years on $100K — solely because of deferred taxation.
When a California CD still makes sense
- Short horizon (under 1 year): Treasury bills or high-yield savings (4.30-4.50%) beat CDs on flexibility.
- Need full liquidity: No-penalty CDs from Ally or Marcus offer 4.10-4.30% with zero early-withdrawal penalty.
- Inside an IRA: The state tax disadvantage disappears in a tax-deferred account, so CDs and MYGAs compete only on rate — MYGAs still win on rate, but the gap narrows.
- Under $50K: MYGA minimums are usually $10-50K and the diversification logic gets thin. CDs are the simpler path.
FDIC insurance for California depositors
FDIC insures up to $250,000 per depositor, per insured bank, per ownership category. Strategies to exceed $250K:
- Open joint accounts ($500K coverage for two-name joint).
- Use multiple banks (each gets its own $250K limit).
- Use multiple ownership categories at one bank (individual + joint + IRA + revocable trust each get separate $250K limits).
Related California guides
- California CD vs MYGA after-tax (detailed calculator)
- Best MYGA rates in California (2026)
- California annuity tax treatment
- CLHIGA coverage explained
- All CD reviews
California CD vs MYGA — second opinion before you lock in
Talk to a licensed independent expert. Hans.
Most California 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.
Drop your info — get a side-by-side: best California CD rates vs current MYGA rates, after-California-tax, with the math written out.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Frequently asked questions
What is the best 1-year CD rate in California?
As of mid-2026, top 1-year CD APYs available to California residents are 4.50-4.85%, led by online banks (Marcus, Ally, Synchrony, Capital One 360) and a handful of California credit unions (SchoolsFirst FCU, Patelco).
Are CDs taxed in California?
Yes. CD interest is taxed as ordinary income both federally and at California's marginal state rate (1-13.3%). Unlike Treasuries, CD interest is NOT exempt from California state tax. For high-bracket California residents, this is the single biggest argument for considering Treasuries or MYGAs instead.
Are California-issued CDs different from national CDs?
No. CDs are not state-issued — they're bank/credit union products. A California resident can buy a CD from any FDIC-insured bank nationally. There is no California-specific CD product.
What's the FDIC insurance limit on California CDs?
FDIC insurance is $250,000 per depositor, per insured bank, per ownership category. This applies the same in California as in every other state. For deposits above $250K, spread across multiple banks or use joint accounts.
Should I buy a CD or a Treasury bill in California?
For California residents in the 9.3%+ bracket, Treasury bills almost always win at comparable maturities — Treasury interest is exempt from California state tax. A 4.30% Treasury beats a 4.60% CD after California state tax for most middle and high-income residents.
How do California credit union CDs compare to bank CDs?
Credit unions (SchoolsFirst FCU, Patelco, USC Credit Union) sometimes offer 10-30 bps higher APY than the national bank average, but membership requirements apply. NCUA insures credit union deposits up to $250K, equivalent to FDIC.
Are jumbo CDs ($100K+) worth it in California?
Rarely. The 'jumbo' premium has compressed to 0-15 bps in 2026. For deposits over $100K, a MYGA (5.40-5.80%) or a Treasury ladder (4.20-4.50%, state-tax-free) usually beats a jumbo CD on after-California-tax basis.
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.