Best CD Rates in California (September 2026): Up to 4.50% APY, Plus the State-Tax Math
Written & reviewed by Hans Goldstein, EA, independent licensed insurance producer · CA license 4273294 · NPN 20602398Admitted to practice before the IRS
Rates checked on each bank's site, DepositAccounts and the Treasury on September 24, 2026 · Updated
The best CD rates open to Californians on September 24, 2026 were about 4.35% to 4.50% APY, on nationally available online CDs (Bread Savings and Popular Direct 5-year 4.50%, Sallie Mae 4.40%, Marcus 4.35%). Patelco, a California credit union, paid 4.25% on a 7-month new-money certificate. But CD interest is fully taxable by California, while Treasury interest is not, and the 5-year Treasury yielded 5.03% the same day, more than any 5-year CD.
Best CD rates available in California
| Institution | Term | APY | Minimum | As of |
|---|---|---|---|---|
| Bread Savings | 5 years | 4.50% | $1,500 | 09/25/2026 (DepositAccounts) |
| Popular Direct | 60 months | 4.50% | $10,000 | 09/25/2026 (DepositAccounts) |
| Sallie Mae Bank | 15 / 36 / 60 months | 4.40% | $2,500 | 09/24/2026 |
| Marcus by Goldman Sachs | 18 months to 6 years | 4.35% | $500 | 09/24/2026 |
| Synchrony Bank | 60 months | 4.35% | $0 | 09/24/2026 |
| Barclays | 24 months | 4.35% | $0 | 09/11/2026 |
| Capital One 360 | 11 months | 4.30% | $0 | 09/24/2026 |
| Ally Bank | 18 months | 4.25% | $0 | 09/24/2026 |
| Patelco Credit Union (CA) | 7 months, new money | 4.25% | $250 | 09/01/2026 |
| Patelco Credit Union (CA) | 60 months | 3.50% | $250 | 09/01/2026 |
The California tax problem
CD interest is taxed by the IRS and by California every year, whether or not you withdraw it. California's 2025 brackets run from 1% to 12.3%; the 9.3% bracket covers single filers with taxable income of $72,724 to $371,479 ($145,448 to $742,958 married filing jointly), and taxable income over $1 million pays an extra 1% (FTB). A 4.40% CD taxed at 24% federal and 9.3% California keeps about 2.93% a year.
Two alternatives change that math. Treasuries are exempt from California tax by federal law. MYGAs defer both federal and California tax until withdrawal.
Worked example: CD vs Treasury vs MYGA for a Californian
| $100,000 for 5 years, 24% federal + 9.3% California | Rate | California tax | After-tax value after 5 years |
|---|---|---|---|
| 5-year CD (Sallie Mae 60-month) | 4.40% APY | Every year | ~$115,600 |
| 5-year Treasury note (par yield) | 5.03% | Exempt | ~$120,600 |
| 5-year MYGA | 5.50% | Deferred, taxed at withdrawal | ~$120,500 |
The Treasury beats the CD here because it currently pays more and escapes California tax. The MYGA lands about even with the Treasury: it pays more and defers tax, but California tax on the gain at withdrawal closes the gap; its trade-offs are a surrender charge for early exit and backing by the insurer and California's guaranty association instead of the FDIC. MYGA benchmark: carriers rated A or better topped out around 5.50% to 6.05% on 5-year compound-interest MYGAs, per public carrier rate sheets, October 14, 2026. Rates vary by state, premium and carrier.
Annuity vs CD · Current MYGA rates · Best 5-year MYGA rates
When a California CD still makes sense
- Inside an IRA, where the state-tax difference disappears and FDIC insurance may matter most to you.
- Small balances below MYGA minimums, or money you may need within a year or two.
- You want FDIC insurance specifically: $250,000 per depositor, per bank, per ownership category.
Related California guides
- California CD vs MYGA after tax
- Best MYGA rates in California
- California annuity tax treatment
- California guaranty association (CLHIGA) coverage
- All CD reviews
- State tax on Treasury interest
California CDs: FAQ
What are the best CD rates in California right now?
Californians can open nationally available online CDs, so the best rates are national: 4.35%-4.50% APY on the top 5-year CDs (DepositAccounts, updated 09/25/2026), 4.40% on Sallie Mae's 15-, 36- and 60-month CDs and 4.35% on Marcus CDs from 18 months to 6 years (September 24, 2026). Patelco, a California credit union, paid 4.25% on a 7-month new-money certificate (effective 09/01/2026).
Is CD interest taxed by California?
Yes. CD interest is fully taxable by California as ordinary income. For 2025 the 9.3% bracket applies to single filers with taxable income of $72,724 to $371,479 ($145,448 to $742,958 married filing jointly), and the top rate is 12.3%, plus an extra 1% on taxable income over $1 million, per the FTB.
Are Treasuries better than CDs for Californians?
Right now, often yes. Treasury interest is exempt from California tax under 31 U.S.C. 3124, and on September 24, 2026 the 1-year Treasury yielded 4.51% and the 5-year 5.03% (Treasury par yield curve), above the best 1-year and 5-year CDs before tax.
What do California credit unions pay on certificates?
Patelco Credit Union's rates effective September 1, 2026: 4.25% APY on a 7-month new-money certificate, 4.00% on a 13-month certificate, 3.50% on 60 months and 3.00%-3.25% on other terms, $250 minimum. Other California credit unions were not verified for this update.
How are MYGAs taxed in California?
MYGA interest is not taxed by California or the IRS until you withdraw it; then the gain is ordinary income for both. That deferral is why a MYGA can beat a CD after California tax even when the rates are close.
How much does the FDIC insure?
$250,000 per depositor, per insured bank, per ownership category. Joint, IRA and trust accounts are separate ownership categories; spreading money across banks also raises total coverage.
My take
Californians shop the national CD market, where the best rates were 4.35%-4.50% on September 24, 2026. Before buying one in a taxable account, price a Treasury (5-year 5.03% on September 24, 2026, California-exempt) and a MYGA (tax-deferred); both beat the best CD after California tax on the numbers above.
Hans Goldstein is an independent licensed insurance producer (CA license 4273294, NPN 20602398) and is not affiliated with any bank or credit union named here. He does not sell CDs. Rates are copied from the sources named, as of the dates shown; confirm the current rate before opening. MYGA figures are illustrations, not quotes.
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.