The Best Bank CD Rates of 2012
Certificates of deposit offer a secure way to save money. A CD is typically FDIC insured and can be obtained through most financial institutions. The term of a CD typically ranges from 3 months to 60 months. Generally, the longer the term the higher the interest rate, but that’s not always true. It’s important to check all local and online banks for the best CD rates because you can find gems in places you never thought to look.
The following rates are for a 1 year CD. Each bank, however, offers certificates of deposit with terms as short as 3 months all the way up to 5 years.
12-Month CD Rates
| Bank | APY | Minimum CD Amount | Details |
|---|---|---|---|
 | 1.00% | Discover Bank Review |
|
 | 0.99% | Ally Bank Review |
|
 | 0.80% | Everbank Review |
|
 | 0.55% | AMEX Bank Review |
|
 | 0.50% | ING Direct Review |
|
 | 0.40% | FNBO Review |
|
 | 0.35% | Aurora Bank Review |
Discover Bank first opened its doors in 1911 in Greenwood, DE. Originally known as the Greenwood Trust Company, the bank joined Discover Financial Services in 2000. It currently offers CD accounts with terms ranging from 3 months to 120 months. Discover Bank also offers a 12-month IRA CD.
Ally Bank continues to win awards for outstanding customer service and is always at the top of the list for interest rates. Personally, I have a few different Ally deposit accounts and even though their rates change on a frequent basis, I appreciate the service and quality of website they offer. Formally GMAC, Ally continues to re-brand itself in a positive direction.
ING Direct is best known as the home of Orange Saving Accounts and Electric Orange Checking Accounts but also offers online CDs. It offers CD terms ranging from 6 months to 60 months, with interest rates as high as 1.00%. Its highest CD rate of 1.00% is available for 5 year CD’s only. Interest payments can be paid monthly or yearly, and can be made to an ING Direct or external bank account.
EverBank has approximately 1,500 employees and more than $6.5 billion under management. Its certificates of deposit range in terms from 3 months to 60 months, with interest rates (APR) currently ranging from 0.30% to 1.81% for its Yield Pledge CD. Penalties for early withdrawal vary depending on the term of the CD. The range is a penalty equal to 90 days simple interest for its 13 week and 26 week CDs to 900 days of simple interest for its 5-year CD.
FNBO Direct or First National Bank of Omaha, is a subsidiary of First National of Nebraska. First opened in 1857 as a local bank, it is now the largest private bank in the United States, with more than 6.6 million customers and more than $20 billion in managed assets. FNBO Direct offers the standard CD terms as well as a competitive savings account, bill pay account and credit card.
Sallie Mae offers only three of the more basic CD terms and even though you might think ‘student loan’ before you think ‘savings’, there guys are more than capable of handling both. Their online savings account continues to offer one of the best interest rates available today and the account takes less than 120 seconds to open.
HSBC Direct is part of HSBC Bank USA, N.A., which has about 450 branches in the U.S., and HSBC Group, which has more than 10,000 office worldwide. Its online CD account is offered in terms ranging from 6 months to 60 months, with a variety of interest rates. Early withdrawals from an account incur a penalty equal to 30 days’ simple interest.
{ 17 comments… read them below or add one }
I am interested in a 1 yr cd rate i dollar savings in the amt of $20k.
Currently the best one year CD rate comes from Ally bank at 2.80% APY with no minimums.
The Ally bank rate is now at 2.5%, but is still one of the top CD rates available. You can check it out here.
I get 7.5% Muahahaha! (No joke!)
From what? Certainly not an FDIC insured certificate of deposit.
I live in Vietnam right now
It’s actually 17.5% but inflation is 20-25% so I still loose money haha
Deposit rates should be listed as APY not APR.
Dollar Savings Direct is a division of Emigrant Bank. It currently offers one of the best CD rates available, with an APR of 3.25% for a term of 16 months. DSD charges no fees for its CD, which can be linked directly to your checking account. You can also withdraw posted interest from your account at any time. For CDs with terms less than a year, an early withdrawal penalty equal to 90 days’ interest will be assessed. For CD terms of 12 months or greater, the early withdrawal penalty is equal to 180 days’ interest.
Compliance Review, I agree that APY is the best comparison, which is why we list our rates as APY, not APR. As for Dollar Savings Direct, it does not offer a 16 month CD for 3.25% If you have information to the contrary, please provide a link. Thanks.
ING is up to 2.1% for a 12 month CD as of October 2009.
The rate quoted for the Discover Bank 12 month CD is incorrect, it is 1.50% APY, not 1.6%
Steve, thanks for letting us know. We’ve updated all of the rates.
I’m very new to all this. What exactly is a CD? Can you make deposits into it, like a savings account? Or do you start with a set deposit amount and just leave it to accrue interest? Would these work for my kids savings accounts? Any info is appreciated. Thanks.
Soccy, a CD is different than a savings account in several ways. First, a CD is for a set term that can range anywhere from 1 month to 10 years. You deposit one amount into the CD for the entire term. You don’t keep adding to CDs like you would a savings account. Also, if you withdrawal the money before the term is up, you’ll have to pay a early withdrawal penalty, typically amount to 1 to 6 month’s worth of interest, depending on the CD. While CDs have these extra restrictions, they generally pay higher interest than a savings account.
For children, here are my recommendations for some of the best options: Best Savings Account for Children | Online Banking for Kids
DR, very helpful post you have, it provides us readers more information about how CD’s work and also other details that we need to know about it. Thanks for sharing, Mark.
This is great information. Just want to point out that for a 12 month CD, Aurora Bank is offering a very good rate too – about 1.27% (1.28% APY) for deposits over 10,000.00.
Be careful of the possible pit falls of using a CD as a long term savings vehicle. As a financial professional for years, I believe in giving balanced information, so a consumer can make the best informed decision possible. If you have a lump sum or a monthly savings amount that you are putting away, you may be a prime candidate for a savings or retirement annuity. You can expect to receive a much higher interest rate(almost double that of a CD), you will not receive a 1099 each year(which lessens your yearly tax liability), penalty free withdrawal priviledges, and a safer place for your nest egg than an FDIC insured CD(since the FDIC is backed by a a federal government whith a very unbalanced and nearly bankrupt federal reserve, IMO). Happy Savings!!!
Phillip, if we want to be balanced, let’s not tell folks that an FDIC insured financial institution is less safe than an annuity backed by a private company. That’s just ridiculous. Further, annuities come with hefty fees. Furthermore, depending on the type of annuity, it comes with significantly more risk than a CD. That’s not to say that annuities aren’t a good choice in some circumstances, but comparing them to CDs is like comparing apples to oranges.