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Want to grow your money faster this year? Stashing cash in a basic savings account isn’t going to cut it. Instead, consider a certificate of deposit, which offers a low-risk way to earn a higher return.
Plus, short-term CDs provide an easy way to maximize savings without locking up your funds long-term.
Whether saving for a house or storing extra cash, short-term CDs help you accumulate savings faster. We combed through the latest rates to find the top short-term CDs right now, all with terms under 12 months.
1. BMO Alto
- Annual percentage yield: 5.15%
- Term length: 6 months
- Minimum deposit: $0
If you’re open to online banking, consider a 6-month CD with BMO Alto. It also pays an APY of 5.15%, one of the highest rates currently on the market. Plus, there’s no minimum initial deposit required.
Interest on this account compounds daily and is deposited monthly in your account.
Remember to fund the account within 10 days, or it will close. If you withdraw your money before the CD is up, you’ll incur a penalty of 90 days of interest for premature withdrawals.
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2. Bank5 Connect
- APY: 5.05%
- Term length: 6 months
- Minimum deposit: $500
This no-frills CD product is hard to top for anyone searching for high earning potential.
This online bank offers a 6-month CD with an APY of 5.05% and a minimum deposit of just $500. Should you decide to make a hefty deposit, your funds are 100% insured, even if the balance exceeds the FDIC limit.
The early withdrawal penalty is equal to three months’ worth of interest. Bank5 Connect will automatically renew your CD at maturity unless you withdraw the funds like other banks.
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3. Everbank
- APY: 4.00%
- Term length: 9 months
- Minimum deposit: $1,000
Everbank offers CDs with terms as short as three months. But its highest-yielding option is its 9-month CD that pays a 5.05% APY, one of the highest rates on the market. Even better, it requires a minimum opening deposit of just $1,000. You can withdraw interest as it accrues over the CD’s term.
Plus, Everbank makes it easy to roll your funds into a new CD if you want to continue saving after the initial term ends. Automated alerts are sent out 20 days before the term expiration date. If you withdraw the funds, they’re automatically placed into a new CD at maturity.
Are you planning to make an early withdrawal? It’s worth contacting Everbank to inquire about penalties, as the fee schedule isn’t published on the website.
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4. Bask Bank
- APY: 5.15%
- Term length: 6 months
- Minimum deposit: $1,000
Bask Bank is another online bank offering a solid short-term CD. Their 6-month option comes with a 5.15% APY. You’ll have 10 days to make the minimum deposit of $1,000. Once you fund your account, any early withdrawals incur a penalty equal to 90 days in simple interest.
Bask Bank also features a benefit you won’t get with most other banks. At maturity, you can roll your funds into a Bask Mileage Savings Account that lets you accumulate American Airlines Al AAdvantage® miles. This makes the Bask 6-month CD a smart option for frequent travelers who regularly fly with American Airlines.
The online bank will notify you 30 days before maturity. They’ll automatically roll you into a new CD if you don’t respond or withdraw your money.
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5. Synchrony Bank
- APY: 5.25%
- Term length: 9 months
- Minimum deposit: $0
Synchrony Bank offers a competitive 9-month CD with an attractive APY of 5.25%. Plus, there’s no minimum deposit needed to open this CD, making it ideal for consumers who want flexibility.
As with most CDs, an early withdrawal penalty of 90 days of simple interest. As for rollovers, Synchrony Bank CDs auto-renew at maturity. Customers have a 10-day grace period to withdraw funds without penalty, make additional deposits, or switch to a CD with a different term.
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6. TAB Bank
- APY: 5.27%
- Term length: 9 months
- Minimum deposit: $1,000
TAB Bank offers a variety of CDs, but you’ll find the best rates with their shorter-term options — interest compounds daily, which can help you maximize the interest you make.
Their 9-month CD offers a 5.27% APY and requires a $1,000 initial minimum deposit. Early withdrawal penalties are 90 days of interest, and automated rollovers are available.
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7. LendingClub
- APY: 5.00%
- Term length: 6 months
- Minimum deposit: $2,500
LendingClub offers a 6-month CD with an APY of 5.00%. But, unlike the other CDs on this list, the minimum initial deposit is relatively high ($2,500).
With this CD, interest will accrue monthly, not daily, which may minimize the total interest you can earn.
LendingClub imposes a fee of 90 days of simple interest for withdrawing funds before the CD reaches maturity. Remember that LendingClub will automatically roll over your funds if you don’t withdraw your money before the term ends.
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Should you open a CD right now?
CDs offer higher interest rates for a set period — anywhere from three months to five years or longer. Plus, CD rates are fixed, so you’ll know exactly how much interest you will earn when you deposit your money.
This feature sets CDs apart from high-yield savings accounts and money market accounts, which have variable interest rates.
Interest rates are expected to fall slightly in the next year. Opening a CD now allows you to lock in an above-average yield. While CDs have penalties for early withdrawal, short-term CDs offer more flexibility than multi-year accounts. That way, your money isn’t tied up for years.
In uncertain economic times, short-term CDs offer a blend of return potential, stability, and accessibility. They can provide a hedge against volatility while still maintaining liquidity.
When is a short-term CD a good idea?
A short-term CD may not be suitable for everyone, but there are a few situations where they make sense:
- You’re saving for a near-term goal: If you have a financial goal in the next 1-2 years, like a down payment or car, a short-term CD ensures a rate of return that beats regular savings accounts. You can match the CD’s term with your expected savings target date.
- Parking excess cash: It’s a good idea to keep most of your emergency funds in a very accessible place, like a regular savings account or high-yield account. But if you have some extra funds you’re not sure what to do with a short-term CD is a great option.
- Laddering your investments: CD laddering involves spreading your money across CDs of different terms. It helps manage the unpredictability of future rate fluctuations while offering some liquidity. Consider blending short-term CDs with longer-term CDs to create access to your money while maximizing growth.
The bottom line
Although short-term CDs are a safe bet to boost your savings, not all are the same. That’s why it’s essential to look at all features of a CD, including the rate, minimum initial deposit, and fees. You’ll also want to ensure your account is FDIC-insured — so your money is protected.
By reviewing all of these factors, you’ll have the knowledge needed to make an informed decision.
Opinions expressed are author’s alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.