Best 4-Year CD rates of July 2024
Updated 5:18 a.m. UTC July 1, 2024
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The best 4-year CD rates offer a solid option for you to secure a high yield for years to come, especially if you are saving for a particular purchase in the near future. However, four-year terms somewhat overlooked in the current interest rate environment. Here are the best four-year CDs available.
Account details and annual percentage yields (APYs) are accurate as of June 27, 2024.
Best 4-Year CD rates
- Fidelity certificates of deposit.
- First Internet Bank certificates of deposit.
- Barclays Online certificates of deposit.
- First National Bank of America certificates of deposit.
- Bread Savings certificates of deposit.
Why trust our banking experts
Our team of experts evaluates hundreds of banking products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 140 CDs from 84+ financial institutions reviewed.
- 4 levels of fact checking.
- 50+ data points analyzed.
Compare the best 4-year CDs
INSTITUTION | 4-YEAR CD APY | MIN. DEPOSIT |
---|---|---|
Fidelity certificates of deposit
| 4.50%
| $100 to $1,000
|
First Internet Bank certificates of deposit
| 4.45%
| $1,000
|
Barclays Online certificates of deposit
| 3.50%
| $0
|
First National Bank of America certificates of deposit
| 4.50%
| $1,000
|
Bread Savings certificates of deposit
| 4.15%
| $1,500
|
Methodology
We evaluated nearly 150 CDs offered by 84 financial institutions across the nation, including ones from credit unions, traditional banks and online financial institutions. We created a star rating for each based on seven categories, which we weighted based on importance:
- APY: 65%.
- Digital experience: 10%.
- Minimum deposit requirement: 5%.
- Customer service: 5%.
- Compound interest schedule: 5%.
- Available terms: 5%.
- Availability: 5%.
An institution with a perfect score of 100 would get 5 stars. One with a score of 80 would get 4 stars and so on.
You’ll notice from the above list that we believe yield is the most important factor when you’re shopping around for a CD. You want to get the most juice for the squeeze, after all. Non-APY elements such as customer reviews, deposit requirements and were still considered, however. We scored better CDs that have better ratings and lower requirements, faster compounding interest and more term options.
Why some banks didn’t make the cut
Some of the most well-known banks in the country aren’t on our list. That’s because the largest banks enjoy the benefits of popularity — they don’t need to feature great CD rates to attract customers and deposits.
We monitor over 80 financial institutions, including Bank of America, Capital One, PenFed, Discover, Chase, TD Bank, Marcus by Goldman Sachs, TIAA Bank and Wells Fargo.
Comparatively, smaller institutions tend to offer the top-of-market rates to make a splash and gain business.
What is a 4-year CD?
A four-year CD is a type of savings product where you deposit money for four years or 48 months. Think of it like a locked box: You put money in, lock it for four years and the bank pays you interest for keeping it tucked away.
The bank generally offers a higher interest rate for CDs than regular savings accounts because you promise not to touch the money for the set time. This is great if you want a secure place for your savings with a guaranteed return.
“You also do not want to use the funds before the four year term is up or you will have to pay a penalty,” said Kendall Meade, a certified financial planner (CFP) at SoFi.
A four-year CD isn’t meant to act as a place for your regular savings, which you may need to access occasionally in case of a rainy day or a celebration.
Short-term vs. long-term CDs
Short-term CDs usually last a few months to a year. For example, three-month CDs and one-year CDs are usually considered to be short-term. Long-term CDs last more than one year, with some banks offering ones with maturity dates as far out as 10-years.
Traditionally, long-term CDs have higher interest rates than short-term because you’re promising the bank that it can keep your money longer. But this isn’t always the case. Nowadays, as the market fluxes due to pressure from the Federal Reserve’s fight with inflation, many banks offer their best rates on one-year terms.
Short-term CDs are good if you think you’ll need your money soon. Long-term CDs are better if you can wait and want to potentially earn more interest. Before choosing, ask yourself: “How long can I go without touching this money?” Let that answer be your guide.
Remember that the term and the amount matter. For example, you may be fine to invest $10,000 for a cozy six months, but comfortable investing only $1,000 for five years.
If you’re at ease with a whole range of terms and don’t know where to start, consider splitting the difference. You could choose to split your available deposit into two or more CDs, both short- and long-term.
A CD ladder is a strategy where you spread your investment across multiple CDs with different maturity dates. For a four-year CD ladder, you might invest in CDs that mature in one, two, three and four years. This gives you periodic access to funds while still allowing you to take advantage of varying interest rates.
What is a good CD rate?
When looking for a CD, the interest rate is key. It’s how much extra money the bank gives you for keeping your money locked in. But what’s considered a “good” rate?
A good CD rate is typically above the national average. As of July 15, 2024, the national average rate for a four-year CD is 1.36% APY, according to the Federal Deposit Insurance Corp. (FDIC). So, anything above this could be seen as good.
Yet the best CD rates set the bar higher. Top-notch four-year CD rates exceed 4.00% APY. It’s like shopping; just as you’d want more value for your money, with CDs you’d want more interest for your savings.
Aim for a rate that’s well above average to maximize your earnings. Use a CD calculator to estimate how much you could earn. It’s also important that the bank or credit union is insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA).
Choosing the best CD term and rate
Picking the right CD can be a bit like choosing the perfect outfit — it needs to fit your goals and be comfortable for your financial situation. Begin by scouting multiple banks and online institutions to discover the top CD rates, especially for terms like four-years.
But don’t get dazzled just by the rate. Check other aspects: the minimum amount you need to deposit and early withdrawal penalties. Most standard CDs have opening deposits of $1,000 or more, while jumbo CDs usually require at least $100,000 to open an account. Make sure you aren’t stretching your savings too thin.
“CDs are a great fit for a ‘sinking fund’ if you need the money in four years for a specific purpose, like a down payment for a big purchase,” said Brandon Robinson, president and founder of JBR Associates Financial Services. “If too much ‘lazy money’ is building up in a low interest savings or checking account, then a four-year CD can be a good fit to provide a much higher APY than a bank savings account.”
Therefore, you should place your emergency fund in a high-yield savings account since you want access to that cash at a moment’s notice without having to pay a penalty.
Frequently asked questions (FAQs)
The biggest benefit of a four-year CD is that it earns a predictable, fixed interest rate. But the biggest drawback is that your money is locked up for four years. If you need to access it earlier, you’ll likely face an early withdrawal penalty. Also, if interest rates rise while your CD is open, you might miss out on higher returns.
Four-year CDs are best used for purchases that you don’t need to make, for well, four years, such as a downpayment on a house. You also need to be comfortable leaving those funds alone to gather interest for the full four years. Most CD providers charge significant early withdrawal fees, such as one year’s worth of interest. Another option is to utilize a four-year CD in a CD ladder savings strategy, which provides more liquidity for savers.
A CD ladder is a savings strategy in which you invest in multiple CDs with different terms. For example, you may purchase a series of CDs that matures in one, two, three and four years. By doing this, you diversify your investments — you can get the best yield for each maturity date and have access to your funds as each matures, rather than needing to await a single marked day on the calendar.
Typically, withdrawing from a four-year CD early incurs a penalty. If you need more flexible access to funds, consider opening a no-penalty CD or building a CD ladder. If you need monthly access to your money, maybe because you’re using it as an emergency savings, consider opening a high-yield savings account (HYSA).
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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