Best Bank CD Rates

A CD (certificate of deposit) offers 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. Listed below are some of the best CD rates available. Following this list are important notes about each online bank and the CD accounts they offer.

Last Updated: November 5, 2009

Bank of Internet is a publicly traded (ticker: BOFI) FDIC insured bank. Headquartered in San Diego, CA, the Bank of Internet has been servicing customers since 1999. It currently offers CD terms ranging from 3 to 60 months, with corresponding APRs ranging from 1.16% to 3.05%. Interest earned on CD accounts can be paid monthly CD, checking or savings account, or it can be paid all at once at maturity. CDs are set to renew automatically for identical terms, although you can chose not to renew your CD. Bank of Internet charges no fees for its CD accounts.

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 48 months, with interest rates ranging from 2.25% to 2.75%. Note that currently its best CD rate of 2.75% is available for terms of 12 or 18 months. Early withdrawals from an account incur a penalty equal to 30 days' simple interest.

E*Trade Financial is a publicly traded company (ticker: ETFC) that is perhaps best known as a discount online broker. It offers FDIC insured CDs ranging in terms from 3 months to 60 months, with interest rates ranging from .85% to 1.70%. You can chose to have interest payments made monthly or quarterly.

ING Direct, perhaps best known as the home of Orange Saving Accounts and Electric Orange Checking Accounts, also offers online CDs. It offers CD terms ranging from 6 months to 60 months, with interest rates from 1.75% to 2.50%. Its highest CD rate of 2.50% is available for all CDs with terms of 12 months or longer. Interest payments can be paid monthly or yearly, and can be made to an ING Direct or external bank account.

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.

Emigrant Direct offers its CD accounts on terms similar to Dollar Savings Direct. The primary difference is that its interest rate for the same term is generally lower. Currently, its 16-month CD pays 3.00%, 25 basis points less than Dollar Savings Direct. Its penalty for early withdrawal is the same.

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 CD terms ranging from 6 to 24 months, with interest rates ranging from 2.00% to 3.25%.

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 1.85% to 3.45% 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.

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. The APY (annual percentage yield) for these products range from 1.25% to 3.93%.

E-Loan has a simple and clear mission--to provide consumers with best interest rate savings accounts and CD products. E-Loan is a wholly owned subsidiary of Banco Popular North America, a New York State-chartered bank, which in turn is a wholly-owned subsidiary of Popular, Inc., a full service financial services provider with operations in Puerto Rico, the United States, the Caribbean and Latin America. Its CD terms range from one month to 72 months. Its APY can vary depending on the amount on deposit.

Virtual Bank is just that, a bank that has no physical branches, instead existing solely on the Internet. As a result, it claims to offer higher interest rates because of lower costs. VirtualBank is a federally chartered, FDIC insured bank headquartered in Florida. CD terms range from 1 month to 60 months, and interest rates on its eCD range from 1.25% to 3.00%