The Top 6 Month CD Rates for September 2018
Short-term certificate of deposit (CD) accounts offer investors a safe opportunity to squirrel away money for a future expense. If you’re looking for a brief solution for storing your cash and want to earn more interest than a typical savings account will offer, a 6 month CD can make a lot of sense. (It’s also a good place to start if you’re building a CD ladder.)
Using information from DepositAccounts.com, another LendingTree company and a database of offerings at more than 17,100 banks and credit unions, we found the five banks and five credit unions with the top 6 month CD rates. If there was a tie, we chose the institution with the smaller minimum-deposit requirement. We pulled these rates on September 7, 2018, and we excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.65%, according to the DepositAccounts.com database. These options outperform that average by a long shot. (You may also want to view our picks for the overall best CD rates.)
Banks with the best 6 month CD rates
DollarSavingsDirect
6 month CD APY: 2.15%Bank information: DollarSavingsDirect is an online division of Emigrant Bank. Founded by Irish emigrants in 1850, Emigrant Bank has created various online divisions throughout the years. DollarSavingsDirect seems to be the most active and competitive online division when it comes to its rates.Where to open CD account: OnlineMinimum balance to open: $1,000Maintenance fees: $0Early withdrawal penalties: 90 days’ interest
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on DollarSavingsDirect’s secure website
Member FDIC
My Banking Direct
6 month CD APY: 2.15%Bank information: My Banking Direct is a division of New York Community Bank. The bank was originally chartered in 1859 in Queens, NY. My Banking Direct was created as a way to offer consumers higher rates on deposit accounts.Where to open CD account: OnlineMinimum balance to open: $2,500Maintenance fees: $0Early withdrawal penalties: 90 days’ interest
LEARN MORE Secured
on My Banking Direct’s secure website
NexBank
6 month CD APY: 2.15%Bank information: NexBank is also located in Dallas, TX. While it primarily focuses on commercial banking, mortgage banking, and institutional services, it does offer CDs and personal banking to customers nationwide.Where to open CD account: OnlineMinimum balance to open: $10,000Maintenance fees: $0Early withdrawal penalties: Determined by the bank
LEARN MORE Secured
on NexBank’s secure website
Limelight Bank
6 month CD APY: 2.11%Bank information: Although Limelight Bank is located in Utah, they are an online bank that serves customers nationwide. They are environmentally conscious and originate loans for solar projects from customers’ various deposit accounts.Where to open CD account: OnlineMinimum balance to open: $1,000Maintenance fees: $0Early withdrawal penalties: Determined by bank
LEARN MORE Secured
on Limelight Bank’s secure website
CD Bank
6 month CD APY: 2.10%Bank information: A subsidiary of TBK Bank, SSB, this online bank has no branch locations, but offers service online in all 50 states.Where to open CD account: OnlineMinimum balance to open: $10,000Maintenance fees: $0Early withdrawal penalties: 90 days’ interest
LEARN MORE Secured
on CD Bank’s secure website
Credit unions with the best 6 month CD rates
CommunityWide Federal Credit Union
6 month CD APY: 2.15%Credit union information: Founded as a credit union to provide quality financial services to individuals in South Bend, IN, CommunityWide Federal Credit Union has grown to offer their services to various communities within Indiana as well as the digital world.Membership details: Anyone can become a member by donating to a list of organizations including the Y.M.C.A. If you’re a member of the Michiana Goodwill Boosters or Marine Corps. League of St. Joseph Valley, you’re also eligible to become a member.Where to open CD account: OnlineMinimum balance to open: $2,000Maintenance fees: $0Early withdrawal penalties: Equal to the amount withdrawn multiplied by the remaining days left in the term.
LEARN MORE Secured
on Communitywide Federal Credit Union’s secure website
Service Credit Union
6 month CD APY: 2.00%Credit union information: Founded in Portsmouth, N.H., in 1957, Service Credit Union originally served employees of Pease Air Force Base. Today, it has grown to serve over 200,000 people throughout New Hampshire, North Dakota, Massachusetts, and even Germany.Membership details: To become a member, you must live or work, or have family members that live or work in New Hampshire or Falmouth, Bourne, Mashpee, and Sandwich, Mass. Current members of the military, veterans, retirees, and reservists of the U.S. Armed Forces along with their families are also eligible for membership.Where to open CD account: You can open an account online or at one of their many branches.Minimum balance to open: $250Maintenance fees: $0Early withdrawal penalties: Determined by credit union.
LEARN MORE Secured
on Service Credit Union’s secure website
PenFed Credit Union
6 month CD APY: 2.00%Credit union information: PenFed, established in 1935, today serves more than 1.6 million members at branch locations in all 50 states and select overseas facilities.Membership details: Open to current or retired members of the U.S. military, federal employees, affinity partners, members of qualifying organizations, or by donating to Voices for America’s Troops or the National Military Family Association.Where to open CD account: You can open an account online or at one of their branches.Minimum balance to open: $1,000Maintenance fees: $0Early withdrawal penalties: 90 days’ interest
LEARN MORE Secured
on PenFed Credit Union’s secure website
NCUA Insured
Bellco Credit Union
6 month CD APY: 1.90%Credit union information: Bellco Credit Union was founded in 1936. This credit union is located in Colorado and is focused on supporting their community.Membership details: If you don’t qualify by one of their location or employment field of membership requirements, you may join the Bellco Foundation with minimum donation of $10. All new members will also need to pay a one-time $5 membership fee and make a minimum deposit of $25.Where to open CD account: OnlineMinimum balance to open: $500Maintenance fees: $0Early withdrawal penalties: 90 days’ interest.
LEARN MORE Secured
on Bellco Credit Union’s secure website
Spectrum Credit Union
6 month CD APY: 1.75%Credit union information: Spectrum Credit Union was founded in 1973. This credit union is a division of Chevron Federal Credit Union and serves members worldwide through their online banking platform.Membership details: If you don’t qualify by one of their location or employment field of membership requirements, you may apply for membership by joining one of their non-profit partners: Contra Costa Country Historical Society or Navy League of the United States.Where to open CD account: OnlineMinimum balance to open: $500Maintenance fees: $0Early withdrawal penalties: Equal to three months of dividends.
LEARN MORE Secured
on Spectrum Credit Union’s secure website
Pros and cons of using 6 month CDs
Pros:
- The CD rates offered by banks and credit unions are generally higher than those on savings accounts.
- The rates are fixed and guaranteed for the length of their term.
- The discipline of keeping the funds in the CD means the money will be available upon maturity. (Note: Most banks offer a seven-day grace period to reinvest or withdraw the investment, after which the funds will roll over into a new CD. However, you are not guaranteed the same rate.)
Cons:
- Six-month CD rates are lower than those offered on longer CD investment terms.
- To tap into the CD funds — even for emergencies — consumers must accept a loss through penalties, which can include a percentage of the funds, a percentage of the earned interest, or a combination of both. A typical penalty on a short-term CD is between 30 and 90 days’ worth of interest earnings.
- If you’re not confident you can do without access to the funds for six months, you may be better off putting your money in a traditional savings account, which is likely to earn less interest than a CD.
- Since CD rollovers may reset at a different percentage rate, consumers must speak with the bank before the grace period ends to ensure they are getting the best deal.
Using a 6 month CD for laddering
A CD ladder comprises small-amount CDs with varying terms and respective interest rates that contribute to a long-term investment strategy. After the 6 month CD matures, investors can withdraw the funds for a predetermined expense. Or, they can reinvest the money into a longer-term CD with a better rate. By staggering the maturity dates on short-term CDs, consumers have access to their cash on a regular, predictable basis.
Where can you open a CD account?
Consumers can open 6 month CD accounts (or longer) from banks and credit unions. Bank and credit union CD rates are based on Federal Reserve rates, and there may be strategic times to pursue these short-term instruments following a rate increase.
The post The Top 6 Month CD Rates for September 2018 appeared first on MagnifyMoney.
