Can you get 6% on a CD?
It is possible to get a 6% certificate of deposit, but these sought-after savings rates won’t be available at every bank. In fact, no banks currently offer a 6% CD. However, several credit unions advertise 6% interest rates on certificates of deposit.
Keep in mind that even if you find a credit union that offers CDs with a high rate of return, you’ll still need to meet eligibility requirements to join the credit union itself. Many of those institutions reserve membership for applicants who work with a specific employer, live in a specific area or tick a certain box (i.e., they’re a military vet or attend a local college).
Even as a credit union member, you may need to meet additional conditions to earn the 6% rate, such as:
- Meeting minimum deposit requirements
- Keeping your total deposit under a certain amount
Some rates are considered promotional and only offered to new members.
If you aren’t eligible to join a credit union that offers a 6% CD rate, all is not lost. Some of the best CDs offer a 5% rate of return, and that’s still a very respectable ROI.
Pros and cons of a 6% CD
Recently, the FDIC put the national average interest rate of a 12-month CD at 1.81%. That makes 6% CD rates extremely favorable.
Before you put your savings into a new CD, you should know the pros and cons of this very tempting savings option.
How to get 6% on a CD
Once you know you can get 6% on a CD, you must figure out where and how to snag that premium rate. In most cases, this will involve going to a credit union, not a bank.
If you’re set on finding a 6% CD, you’ll need to start by exploring credit unions with membership guidelines that match your personal demographics. Some credit unions will look at where you live, where you work or if you belong to a certain group, such as a local church or labor union.
Once you find a credit union you can qualify for, go ahead and send in your application. Then, you just need to open the CD itself.
Before you decide which credit union to join, look at the specific characteristics of available 6% CDs. In particular, compare these details:
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CD term: This is how long you’re agreeing to leave your funds locked into the certificate of deposit. For instance, a one-year CD will mature after 12 months. You’ll usually find better rates on short-term CDs versus long-term CDs. That means you’re more likely to get that 6% rate on a CD that matures in 12 months or less. Longer CDs, such as those that mature in five or 10 years, often have interest rates of 3.00% or lower.
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Minimum deposit: Every institution has the right to set a minimum deposit amount, which is the lowest amount required to open the CD.
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Maximum deposit: Some high-rate CDs have deposit caps that limit how much you can invest. But these caps are usually still relatively generous, with some capping out at $25,000 or even $50,000.
Which banks offer 6% CDs?
Currently, no banks are offering 6% CDs, but some credit unions have 6% CD rates.
Financial Partners Credit Union
With over eight decades of service and some $2 billion in assets, Financial Partners Credit Union is a solid institution trusted by 85,000 members.
To get its 6.00% APY CD offering, you must:
- Be a new FPCU member (membership is only open to residents of six listed counties or cities in California, and you must also be a new or retired employee of a partner company or an immediate relative of such an employee)
- Open an eight-month regular share CD
- Deposit between $1,000 and $5,000 (the minimum and maximum deposit amounts set by FPCU)*
*New members who open an eight-month regular share CD with the maximum deposit allowed of $5,000 may be eligible for an extra-premium rate of 6.50% APY.
Empower Federal Credit Union
Empower Federal Credit Union serves members living in any of the eight covered counties in New York, with a concentration on the central part of the state. To be approved, applicants must also be current or retired employees of an EFCU-associated company or closely related to an existing credit union member.
Once you’re a member, you can open a 6.00% APY CD subject to the following terms:
- The CD matures in just three months.
- You must deposit a minimum of $500.
California Coast Credit Union
California Coast Credit Union is celebrating its 95th anniversary in 2024. As part of the festivities, the institution is offering a special celebration certificate investment with a whopping 9.50% APY.
This is a limited-time offer, and investors must meet these requirements:
- Be a member of CCCU, which requires living or working in San Diego, Los Angeles, Ventura, Riverside, Orange, Imperial and/or San Bernardino counties
- Deposit between $500 and $3,000
- Agree to a five-month CD term
- Use new money (no account transfers) to open the CD
- Have an active checking account with eStatements or a different type of account (money market, regular certificate or IRA certificate) with a minimum balance of $5,000
Alternatives to 6% CDs
One important thing to note is that CDs with 5% and 6% rates are usually limited to short-terms like three-month CDs or six-month CDs. And those rates could disappear altogether once your CD has matured. Whether you’re looking for noncredit union investment options today or want to put a plan in place in case 6% CD rates dry up down the road, these alternatives may be just the ticket.
5% CDs
While 6% CDs are still relatively hard to find, 5% CDs are far more prevalent, especially at credit unions and online-only banks. This 1% dip in interest isn’t desirable, but neither is it a total disappointment. It’s still well above the national average 12-month CD interest rate of 1.81%, and it’s comparable to or slightly higher than many interest rates tied to money market and high-yield savings accounts.
Here are some examples of financial institutions offering CDs with a minimum of 5.00% APY:
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Barclays: one-year online CD with 5.00% APY
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Synchrony: nine-month CD with 5.10% APY
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Western-Alliance Bank: three-month CD with 5.26% APY
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Climate First Bank: six-month no-penalty CD with 5.34% APY
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TotalDirectBank: three-month CD with 5.42% APY
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Northern Bank Direct: one-year CD with 5.60% APY
High-yield savings accounts
High-yield savings accounts pay out higher-than-average interest rates. This often tiptoes into 4.00% APY or higher, with some online banks offering APY of over 5.00%. These rates line up with many of the advertised interest rates for CDs, but the two investment options have very different terms.
While a certificate of deposit is a termed account, meaning you’re essentially locking up your money for the duration of the investment, savings accounts offer more accessibility. You can make regular deposits and withdrawals without penalty, though you may be assessed fees if you exceed your institution’s monthly or yearly transaction limit.
Another difference between CDs and savings accounts is how stable your interest rate is. The interest rate you’re given when you open a CD will remain the same until the investment matures. However, saving accounts with variable APY might have interest rates that go up or down depending on the market.
Here are some of the best high-yield savings accounts of 2024:
Money markets
Money market accounts combine the best aspects of checking and savings accounts. You’re free to make transactions, and you’ll usually get a debit card to use at ATMs and for point-of-service purchases. But there may be transaction limits you’ll need to abide by in exchange for interest rates that are significantly higher than you’d get with a regular checking or savings account.
The biggest advantage of an MMA over a CD is freedom. You can access your money and add to the account at will. But CDs have those locked-in interest rates and typically offer higher APY than you’d get with an MMA.
Here are some examples of MMA account rates as of May 2024:
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Barclays: 4.35% APY
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Sallie Mae: 4.65% APY
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Synchrony: 4.75% APY
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LendingClub: 5.00% APY
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EverBank: 5.15% APY
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CFG Community Bank: 5.25% APY