The Best High-Interest CDs (Certificates of Deposit) for 2026

If you're looking to grow your savings with minimal risk, certificates of deposit (CDs) are offering some of the best returns available right now. With rates climbing as high as 4.50% APY in February 2026, locking in a CD could put hundreds of dollars in your pocket compared to a traditional savings account^[1][3]. Whether you're saving for a short-term goal or building long-term wealth, understanding your CD options is crucial to maximizing your returns.

What Are Certificates of Deposit and Why Should You Consider Them?

A certificate of deposit is a savings product where you agree to leave your money with a bank or credit union for a set period—anywhere from a few months to several years. In exchange for this commitment, you'll earn a fixed interest rate that's typically higher than what you'd get from a regular savings account^[1].

The beauty of CDs is their simplicity and safety. Your interest rate is locked in from day one until your CD matures, meaning you'll always know exactly how much you'll earn. Plus, your deposits are protected by FDIC insurance up to $250,000 per account, per institution^[1].

Current CD Rates in February 2026

The CD landscape has shifted considerably following three Federal Reserve rate cuts in 2025^[1][2]. While rates have come down from their peaks, they're still relatively attractive compared to historical averages.

Top CD Rates by Term

Here's what you can expect to earn across different CD terms:

• 3-month CDs: Up to 4.11% APY^[3]
• 6-month CDs: Up to 4.27% APY^[3]
• 7-month CDs: Up to 4.50% APY (the highest available)^[3]
• 1-year CDs: Up to 4.10% APY^[3]
• 5-year CDs: Up to 4.00% APY^[3]

To put this in perspective, a 1-year CD at 4.00% APY would earn you $203.71 in interest on a $5,000 deposit, compared to just $82.62 at 1.64% APY^[2].

Best CD Institutions for 2026

Not all banks offer the same rates. Here are the top performers currently offering competitive CD rates:

High-Yield CD Leaders

• Connexus Credit Union: 4.50% APY on 7-month CDs^[3]
• Service Credit Union: 4.15% APY on 7-month CDs^[3]
• Northern Bank Direct: 4.15% APY on 3-month and 6-month CDs^[1]
• Climate First Bank: 4.27% APY on 6-month CDs^[3]
• OMB Bank: 4.11% APY on 3-month CDs^[3]
• E*TRADE: 3.60% to 4.10% APY with no minimum deposit requirement^[4]
• Sallie Mae Bank: 3.95% to 4.00% APY across various terms^[3]

Traditional Banks

If you prefer working with larger, household-name banks, be aware that their CD rates are typically much lower than online banks and credit unions. For example, Wells Fargo's standard fixed-rate CDs offer just 0.50% to 1.50% APY^[5], while Bank of America's 3-month flexible CD offers 0.10% APY^[6]. This illustrates why shopping around for the best rates is so important—you could earn significantly more by choosing a different institution^[2].

How to Choose the Right CD for Your Needs

Consider Your Time Horizon

The length of your CD term should match when you'll need the money. If you have funds you won't touch for five years, a longer-term CD might work well. However, if you might need access sooner, shorter-term CDs offer more flexibility and currently some of the highest rates available^[3].

Evaluate Your Risk Tolerance

One important thing to understand: if you withdraw money from a CD before it matures, you'll typically face an early withdrawal penalty. Make sure you're only locking away money you can afford to leave untouched until the maturity date.

Compare Minimum Deposits

Minimum deposit requirements vary significantly. E*TRADE offers CDs with no minimum deposit, making it accessible for almost anyone^[4]. Other institutions may require $1,000 to $10,000 to open a CD. Check each bank's requirements to find one that fits your situation.

Factor in FDIC Protection

The FDIC insures deposits up to $250,000 per depositor, per bank. If you're planning to deposit more than this amount, consider spreading your money across multiple institutions to ensure full protection.

CD Laddering Strategy

One smart approach is CD laddering—dividing your money among CDs with different maturity dates. For example, you could buy four 1-year CDs with $1,250 each. Each year, one CD matures, giving you access to funds while keeping the rest earning interest. This strategy balances earning higher rates while maintaining regular access to your money.

Special CD Options to Know About

Beyond traditional fixed-rate CDs, some banks offer variations:

• No-penalty CDs: These allow you to withdraw your money without penalties before maturity, though rates are typically lower^[3]
• Bump-up CDs: These let you increase your rate once if rates rise during your term^[3]
• Flexible-rate CDs: Your rate adjusts based on market conditions, offering less certainty but potential upside^[6]

Tax Implications of CD Interest

Don't forget about taxes. The interest you earn on CDs is taxable income and must be reported to the IRS. You'll receive a 1099-INT form from your bank for any interest earned over $10. If you're in a higher tax bracket, consider whether a CD's after-tax return makes sense for your situation, or explore tax-advantaged accounts like IRAs.

Frequently Asked Questions

What's the difference between a CD and a savings account?

CDs offer higher interest rates in exchange for committing your money for a set period. Savings accounts offer more flexibility—you can withdraw anytime—but earn much lower rates. Currently, many high-yield savings accounts offer around 4-4.5% APY, making them competitive with shorter-term CDs, but traditional bank savings accounts typically earn far less^[1][3].

Can I withdraw money from a CD early?

You can, but you'll typically face an early withdrawal penalty that reduces your earnings. The penalty amount varies by bank and CD term. Some newer "no-penalty" CDs allow early withdrawal without penalties, though at slightly lower rates^[3].

Are CDs safe?

Yes, CDs from FDIC-insured banks and NCUA-insured credit unions are very safe. Your deposits are protected up to $250,000 per account, per institution. This protection covers principal and accrued interest^[1].

How often is CD interest compounded?

Interest compounding varies by bank. For CDs with terms under 12 months, interest may be paid monthly, quarterly, semi-annually, or at maturity. For longer terms, interest is typically paid monthly, quarterly, semi-annually, or annually^[5].

Should I open a CD now or wait for rates to drop further?

With rates still relatively favorable following three Federal Reserve cuts in 2025, locking in current rates could be a smart move^[1][2]. However, if you believe rates will rise, you might wait. Consider your personal financial goals rather than trying to time the market perfectly.

Can I have multiple CDs at the same bank?

Yes, and this can be a smart strategy. You can open multiple CDs with different terms at the same institution. Just remember that FDIC insurance covers up to $250,000 total per depositor per bank, so if you're depositing more, spread accounts across different institutions^[1].

Next Steps: Opening Your First CD

Ready to start earning more on your savings? Here's what to do:

1. Assess your needs: Decide how long you can commit your money and how much you want to invest
2. Compare rates: Visit the websites of top CD providers like Connexus Credit Union, Northern Bank Direct, and E*TRADE to compare current rates
3. Review terms: Read the fine print on early withdrawal penalties, minimum deposits, and how interest is paid
4. Open your account: Most banks now allow you to open CDs online in minutes
5. Set a reminder: Mark your calendar for when your CD matures so you can decide whether to renew or move your money elsewhere

With CDs offering rates up to 4.50% APY, there's no better time than now to put your savings to work. Whether you're saving for a down payment, building an emergency fund, or creating a diversified investment portfolio, high-interest CDs deserve a spot in your financial strategy. Take advantage of these favorable rates while they're still available—your future self will thank you.

Sources & References

1. Fortune: Top CD rates on Feb. 18, 2026: Lock in up to 4.15%
2. Fortune: Top CD rates Feb. 16, 2026: Lock in up to 4.15%
3. NerdWallet: Best CD Rates for February 2026: Up to 4.50%
4. Bankrate: Best CD Rates Of February 2026 - Up to 4.20%
5. Wells Fargo: Savings and Certificate of Deposit (CD) Interest Rates
6. Bank of America: Certificate of Deposit - View CD Rates and Account Options