If you have money sitting in a savings account and don't expect to use it for several months or years, a certificate of deposit (CD) may be worth considering. CDs can provide a predictable return because you generally agree to leave your money deposited for a specific period in exchange for a fixed interest rate.
As of July 2026, several competitive CDs in the market are offering APYs of 4% or higher. The strongest options vary depending on the length of the term, minimum deposit, withdrawal rules, and other account features.
In this guide, we'll look at some of the best CD options across 6-month, 1-year, 18-month, and 2-year terms, explain how CDs work, discuss their advantages and disadvantages, and show how CD ladders can give you more flexibility.
«Important: CD rates can change at any time. The rates and minimum deposits discussed below reflect the information provided for July 2026 and should be verified with the financial institution before opening an account.»
BestHere is the summary of the CD rates you provided:
| Bank or Credit Union | CD Term | APY | Minimum Deposit |
|---|---|---|---|
| Bread Savings | 18 months | 4.25% | $1,500 |
| Bread Savings | 2 years | 4.25% | $1,500 |
| Limelight Bank | 6 months | 4.15% | $1,000 |
| Bask Bank | 1 year | 4.10% | $1,000 |
| Live Oak Bank | 1 year | 4.10% | $2,500 |
| Limelight Bank | 18 months | 4.10% | $1,000 |
| America First Credit Union | 2 years | 4.10% | $500 |
| TAB Bank | 18 months | 4.05% | $1,000 |
| Prime Alliance Bank | 2 years | 4.05% | $500 |
CD Rates for July 2026
The following accounts stood out among the CDs reviewed for their combination of APY, term length, minimum opening deposit, and account features.
The list above represents the specific high-rate accounts included in the source material. The best choice isn't necessarily the account with the highest APY. Your ideal CD also depends on how long you can leave the money untouched and how much you want to deposit.
1. Bread Savings 18-Month CD
APY: 4.25%
Minimum deposit: $1,500
Term: 18 months
Bread Savings offers an 18-month CD with a 4.25% APY, making it one of the highest-paying options in this group.
The account requires a $1,500 minimum opening deposit. Interest compounds daily, which can help your money grow over the CD term.
An 18-month CD can make sense for someone who wants a longer fixed-rate period but doesn't want to commit to a two-year term.
Who might consider it?
This CD may appeal to savers who:
- Have at least $1,500 available to deposit
- Don't expect to need the money for 18 months
- Want to lock in a competitive fixed APY
- Prefer a predictable return over market-based investments
2. Bread Savings 2-Year CD
APY: 4.25%
Minimum deposit: $1,500
Term: 2 years
Bread Savings also offers a 2-year CD at a 4.25% APY. The minimum opening deposit is $1,500, and interest compounds daily.
The major difference between this account and the 18-month option is the commitment period. With the 2-year CD, you're agreeing to keep your money deposited for an additional six months.
That longer commitment can be useful if you believe locking in today's rate fits your financial plan.
3. Limelight Bank 6-Month CD
APY: 4.15%
Minimum deposit: $1,000
Term: 6 months
For savers who don't want to lock their money away for several years, Limelight Bank's 6-month CD offers a shorter alternative.
The account listed in the source material pays a 4.15% APY and requires a $1,000 minimum deposit.
A short-term CD can be particularly useful when you have a known financial goal coming up but don't need the money immediately.
For example, someone expecting to make a large purchase later in the year might prefer a six-month CD over a two-year certificate.
4. Bask Bank 1-Year CD
APY: 4.10%
Minimum deposit: $1,000
Term: 1 year
Bask Bank's 1-year CD offers a 4.10% APY with a $1,000 minimum opening deposit.
A one-year CD can provide a middle ground between short-term and long-term certificates. You aren't committing your money for multiple years, but you still get the advantage of locking in a fixed rate for the full term.
This type of CD may work well for money that you expect to need eventually but don't anticipate using within the next several months.
5. Live Oak Bank 1-Year CD
APY: 4.10%
Minimum deposit: $2,500
Term: 1 year
Live Oak Bank also offers a 1-year CD with a 4.10% APY. However, its $2,500 minimum deposit is higher than several other options on this list.
One notable feature is that the account doesn't charge a monthly maintenance fee. The source material also indicates an early withdrawal penalty equal to 90 days of simple interest.
Before opening any CD, it's important to understand the withdrawal policy. A competitive APY may not be enough to make an account worthwhile if you expect you'll need access to the money before maturity.
6. Limelight Bank 18-Month CD
APY: 4.10%
Minimum deposit: $1,000
Term: 18 months
Limelight Bank's 18-month CD provides a 4.10% APY and requires $1,000 to open.
Compared with its six-month CD, this account requires a substantially longer commitment. In exchange, you get to lock in the listed rate for a longer period.
The right choice depends on your timeline. If you expect to need your savings within six months, a longer CD may create unnecessary restrictions. If the money is truly long-term savings, an 18-month certificate could be more appropriate.
7. America First Credit Union 2-Year CD
APY: 4.10%
Minimum deposit: $500
Term: 2 years
America First Credit Union offers a 2-year CD with a 4.10% APY and a relatively low $500 minimum deposit.
That's important for savers who want a longer-term CD but don't have $1,000 or more available to put into a certificate.
Credit union certificates are generally comparable to bank CDs, although they are usually called share certificates.
Before joining a credit union, make sure you meet its membership requirements and understand the applicable insurance coverage.
8. TAB Bank 18-Month CD
APY: 4.05%
Minimum deposit: $1,000
Term: 18 months
TAB Bank's 18-month CD offers a 4.05% APY with a $1,000 minimum opening deposit.
Although its APY is slightly below the 4.10% and 4.25% options listed above, the account can still be competitive for someone specifically looking for an 18-month term.
When comparing CDs, don't look at APY alone. Consider the minimum deposit, early withdrawal penalty, interest payment options, insurance coverage, and maturity terms as well.
9. Prime Alliance Bank 2-Year CD
APY: 4.05%
Minimum deposit: $500
Term: 2 years
Prime Alliance Bank's 2-year CD offers a 4.05% APY and requires a minimum deposit of $500.
Interest is paid monthly, which may be useful for savers who prefer receiving interest periodically rather than waiting until the CD matures.
However, how interest is paid and how it compounds are separate considerations. Always review the account agreement to understand exactly how interest is calculated and credited.
What Is a Certificate of Deposit?
A certificate of deposit is a type of deposit account that allows you to earn interest by agreeing to leave your money with a financial institution for a predetermined period.
CD terms can range from a few months to several years.
The basic concept is straightforward:
1. You deposit money into a CD.
2. The financial institution pays a specified interest rate.
3. You leave the money in the account until the maturity date.
4. At maturity, you can generally withdraw the funds or choose another savings option.
5. If you withdraw the money early, an early withdrawal penalty may apply.
The biggest difference between a CD and a traditional savings account is accessibility. A savings account generally lets you access your money when needed, while a traditional CD is designed for money you can leave untouched until maturity.
What Is a Good CD Rate in 2026?
Based on the July 2026 information provided, some of the most competitive CDs in this selection are paying around 4% APY or more, with the highest listed rate reaching 4.25%.
However, there's no single APY that automatically makes a CD "good."
For example, a 4.25% CD might not be the best choice for someone who needs access to their money in six months. A 4.10% six-month CD could potentially be more suitable because the shorter term provides earlier access to the funds.
When comparing rates, consider:
- APY
- CD term
- Minimum deposit
- Early withdrawal penalty
- Interest compounding
- Interest payment frequency
- Federal insurance
- Automatic renewal rules
A higher APY isn't necessarily better if the CD doesn't match your financial timeline.
How Do CDs Work?
CDs are relatively simple financial products.
Suppose you deposit $10,000 into a CD offering a fixed APY. The bank agrees to pay the advertised rate as long as you follow the account's terms.
Unlike a variable-rate savings account, a traditional fixed-rate CD generally keeps the same rate throughout its term.
This provides predictability.
The trade-off is flexibility.
If you suddenly need the money before the maturity date, you may have to pay an early withdrawal penalty. Depending on the account, that penalty could reduce some of the interest you've earned.
That's why emergency savings generally shouldn't be placed entirely into a traditional CD.
Types of CDs You Should Know
Not every CD works exactly the same way. Several different types are available.
High-Yield CDs
High-yield CDs offer more competitive interest rates than many traditional certificates.
The main attraction is simple: a higher APY can produce more interest without requiring you to take the same level of market risk associated with stocks or other investments.
No-Penalty CDs
A no-penalty CD allows you to withdraw your money before maturity without paying the traditional early withdrawal penalty, subject to the account's specific rules.
The trade-off is that these CDs may offer lower rates than comparable traditional CDs.
Bump-Up CDs
A bump-up CD gives you an opportunity to increase your interest rate if the financial institution raises its rate during your term.
For example, imagine you open a bump-up CD at 4.00% APY. If the bank later offers 4.25% and your account permits a rate increase, you may be able to move to the higher rate.
The availability and rules vary by institution.
Jumbo CDs
Jumbo CDs generally require a significantly larger deposit, often around $100,000 or more.
Some jumbo certificates may offer competitive rates, but putting a large amount of money into one account also requires careful consideration of deposit insurance limits and diversification.
Callable CDs
A callable CD gives the financial institution the ability to redeem the certificate before its scheduled maturity date under specified circumstances.
This can become relevant when interest rates decline because the bank may have an incentive to replace higher-cost deposits with cheaper funding.
Brokered CDs
Brokered CDs are purchased through a brokerage rather than directly from a bank.
They can have different features and risks compared with traditional bank CDs. Investors should understand how the certificate works, what happens if they need to sell it before maturity, and what insurance protections apply.
Share Certificates
Credit unions generally call their CD-like products share certificates.
They function similarly to bank CDs, but they're offered by credit unions rather than banks.
CD Early Withdrawal Penalties Explained
One of the biggest drawbacks of a traditional CD is the possibility of an early withdrawal penalty.
When you open a CD, you agree to leave the money deposited for a particular period. If you take money out before maturity, the institution may charge a penalty.
The penalty can vary considerably.
Some institutions calculate the charge using a certain number of days or months of interest. In some situations, the penalty could even reduce some of the interest you've already earned.
Before opening a CD, find out:
- Whether early withdrawals are allowed
- How the penalty is calculated
- Whether the penalty applies to principal
- Whether there are exceptions
- What happens if you need only part of the money
Understanding these rules beforehand can prevent an unpleasant surprise later.
Pros and Cons of CDs
CDs can be useful, but they're not appropriate for every financial goal.
Advantages of CDs
Fixed returns
A fixed-rate CD provides a predictable interest rate for the agreed-upon term. You generally don't have to worry about daily stock market fluctuations changing your expected interest rate.
Potentially higher yields than traditional savings
Competitive CDs can offer higher APYs than many conventional savings products.
Deposit insurance
When you open a qualifying CD at an FDIC-insured bank or an NCUA-insured credit union, eligible deposits are generally insured up to $250,000 per depositor, per insured institution, for each ownership category, subject to applicable rules.
Encourages disciplined saving
Because accessing the money early can result in a penalty, a CD can make it harder to spend money that you've intentionally set aside for a future goal.
Disadvantages of CDs
Limited access to your money
Your money is generally committed for the length of the CD term.
Early withdrawal penalties
Accessing your funds before maturity may result in a financial penalty.
Inflation risk
Even a competitive fixed rate may not keep pace with inflation over the entire period.
Minimum deposit requirements
Some CDs require $500, $1,000, $1,500, $2,500, or substantially more to open.
Lower potential returns than market investments
CDs are designed for stability rather than maximum growth. Stocks and other investments can potentially generate higher long-term returns, but they also carry substantially more risk.
What Happens When a CD Matures?
A CD doesn't necessarily require you to make a decision every day. The important date is the maturity date.
When the CD matures, you generally have several choices.
You can:
- Withdraw your money
- Move the money into a savings account
- Open another CD
- Choose a different CD term
- Use the money toward a financial goal
- Consider another investment
Many banks automatically renew CDs if you don't take action during the applicable grace period.
That's why it's important to pay attention to maturity notices.
A CD that was competitive when you originally opened it may no longer offer the best rate when it renews.
What Is a CD Ladder?
A CD ladder is a strategy that spreads your money across multiple CDs with different maturity dates.
Instead of putting $15,000 into one two-year CD, for example, you might divide the money among several certificates with different terms.
A simple ladder could include:
- A 6-month CD
- A 1-year CD
- An 18-month CD
- A 2-year CD
As each CD matures, you can decide whether to withdraw the money or reinvest it.
The major benefit is flexibility.
You don't have to lock your entire savings balance into one maturity date.
Why Use a CD Ladder?
A CD ladder can help address one of the biggest disadvantages of CDs: limited access to your money.
If interest rates rise after you've opened one long-term CD, you might regret locking in your entire balance at a lower rate.
With a ladder, portions of your savings mature at different times.
When a CD matures, you can potentially take advantage of whatever rates are available at that point.
CDs vs. High-Yield Savings Accounts
CDs and high-yield savings accounts can both be useful for earning interest on cash, but they serve different purposes.
A high-yield savings account generally provides easier access to your money. You can usually withdraw or transfer funds without facing a traditional CD early withdrawal penalty.
A CD, on the other hand, offers a fixed term and typically locks in the APY for that period.
A CD may make more sense if:
- You don't need the money during the term.
- You want a predictable fixed rate.
- You're comfortable accepting an early withdrawal penalty.
A high-yield savings account may be preferable if:
- You need regular access to your money.
- Your savings goal has an uncertain timeline.
- You want more flexibility.
CDs vs. Money Market Accounts
Money market accounts can also provide interest while maintaining greater accessibility than many CDs.
The major difference is that a CD is built around a fixed maturity date, while a money market account generally provides easier access to your balance, subject to the institution's terms.
If flexibility is important, a money market account may be worth considering.
If you know you won't need the money for a specific period, a competitive CD could provide a more predictable fixed return.
CDs vs. Treasury Bills
Treasury bills, commonly called T-bills, are short-term U.S. government securities.
Like CDs, they are often viewed as relatively conservative options for holding money.
However, they're structured differently.
T-bills can generally be sold before maturity in the secondary market, while traditional CDs typically impose an early withdrawal penalty when you take money out before maturity.
Taxes can also differ between the two, making the comparison more complicated than simply looking at APYs.
CDs vs. Bonds
CDs and bonds can both play a role in a conservative financial strategy, but they're not interchangeable.
A CD is a deposit product offered by a bank or credit union. A bond is a debt security issued by a government, municipality, or company.
Bonds can generally be sold before maturity, but their market value can rise or fall depending on interest rates and other factors.
A traditional fixed-rate CD, by contrast, generally maintains its stated rate through maturity, subject to its terms.
CDs vs. IRAs
A CD and an IRA aren't necessarily direct alternatives because they serve different purposes.
A CD is an account/product designed to hold money for a fixed period.
An IRA is a tax-advantaged retirement account that can hold various investments, including certain CDs.
If retirement savings are your goal, the tax treatment of the account may be just as important as the interest rate.
CDs vs. Mutual Funds
Mutual funds pool money from investors and invest in assets such as stocks, bonds, or other securities.
Unlike a traditional CD, a mutual fund's value can fluctuate.
That means mutual funds may provide greater long-term growth potential, but they also expose you to investment risk.
A CD may be more appropriate when protecting principal and earning a predictable return are more important than pursuing higher potential returns.
Are CDs a Good Place to Keep Your Money?
CDs can be a useful place for money that you don't need immediately.
They can work particularly well for specific goals with a known timeline, such as:
- A future down payment
- A planned large purchase
- A portion of an emergency fund that isn't immediately needed
- Short- or medium-term savings
- Money you want to keep away from market volatility
However, a CD isn't automatically the best choice simply because its APY is high.
Before opening one, ask yourself:
When will I need this money?
If the answer is "I don't know," locking it into a long-term CD may not be ideal.
What Is the Minimum Amount Needed to Open a CD?
There is no universal minimum deposit requirement.
Some financial institutions offer CDs that can be opened with relatively small amounts, while others require $500, $1,000, $1,500, $2,500, or much more.
The accounts in this July 2026 selection require minimum deposits ranging from $500 to $2,500.
A higher minimum deposit doesn't automatically mean a better CD.
Compare the APY, term, withdrawal penalty, insurance, and other features before making a decision.
Are CDs FDIC Insured?
Eligible CDs held at an FDIC-insured bank are generally covered by FDIC deposit insurance within applicable limits.
Similarly, eligible deposits at an NCUA-insured credit union generally receive federal share insurance within applicable limits.
The standard coverage limit is generally $250,000 per depositor, per insured institution, for each ownership category.
This protection is one reason CDs are often considered lower-risk places to hold cash.
However, deposit insurance doesn't mean every financial product offered by a financial institution is automatically insured. Always verify the institution's insurance status and understand what is covered.
Can You Lose Money With a CD?
A traditional fixed-rate CD at a federally insured institution is generally considered a low-risk way to hold cash, but "low risk" doesn't mean "risk-free."
Potential concerns include:
- Early withdrawal penalties
- Inflation reducing purchasing power
- Opportunity cost if better rates become available
- Taxable interest
- Complications involving uninsured deposits above applicable limits
For example, if you lock in a 4% rate and market rates later rise significantly, your CD will generally continue paying its contracted rate rather than automatically increasing.
That's the trade-off for rate certainty.
Is CD Interest Taxable?
Interest earned from a taxable CD is generally considered taxable income for federal tax purposes.
The exact tax treatment can depend on your circumstances and the type of account holding the CD.
Tax-advantaged accounts such as certain IRAs can have different rules.
If you're earning substantial CD interest, consider discussing your situation with a qualified tax professional rather than assuming all CD interest will be taxed in exactly the same way.
Can You Give a CD as a Gift?
A CD can potentially be used as part of a gift strategy, but there are rules regarding account ownership and custodial accounts.
Generally, you can't simply transfer ownership of an existing adult-owned CD to another adult as though you were handing over a physical gift certificate.
For a child, however, certain custodial account arrangements may allow an adult to establish a CD for the child's benefit.
The specific rules depend on the institution and account structure.
Which CD Term Should You Choose?
The best CD term depends primarily on when you'll need your money.
Choose a shorter term if:
- You expect to need the money relatively soon.
- You want more frequent opportunities to reinvest.
- You're concerned that rates could rise.
- You don't want to commit your money for several years.
Consider a longer term if:
- You don't need the money for several years.
- You want to lock in a competitive rate.
- You prioritize rate certainty.
- You're comfortable giving up access until maturity.
Don't assume that a longer CD always has the highest APY.
Interest rates vary by institution and term, so it's possible for a 1-year CD to offer a better rate than a 2-year or longer certificate.
How to Choose the Best CD
Choosing a CD should involve more than searching for the largest number next to "APY."
Here are the most important factors to compare.
1. APY
The annual percentage yield tells you how much the account can earn based on the stated rate and compounding assumptions.
Compare APYs rather than simply comparing nominal interest rates.
2. Term Length
Make sure the maturity date fits your financial goal.
Don't select a two-year CD for money you'll need next spring.
3. Minimum Deposit
Check how much you need to deposit before opening the account.
4. Early Withdrawal Penalty
This can become extremely important if your circumstances change.
5. Deposit Insurance
Confirm that the bank is FDIC-insured or the credit union is NCUA-insured, as applicable.
6. Automatic Renewal
Find out what happens when the CD matures.
You don't want an account to automatically renew into an unfavorable term or rate simply because you missed the grace period.
7. Interest Payment Options
Some CDs allow interest to compound in the account, while others may provide periodic interest payments.
Understand how the account credits interest before opening it.
Bottom Line: Are 4%+ CDs Worth Considering in 2026?
The July 2026 CD data provided here shows that competitive certificates can still offer APYs around or above 4%, with the highest listed options reaching 4.25%.
Among the highlighted accounts, Bread Savings offers 4.25% APYs on both its 18-month and 2-year CDs. Limelight Bank offers 4.15% on its 6-month certificate, while several 1-year, 18-month, and 2-year options offer rates between 4.05% and 4.10%.
But the highest APY isn't automatically the best choice.
Your decision should depend on how much money you have, when you'll need it, how long you're willing to lock it up, and how comfortable you are with early withdrawal restrictions.
If you want maximum flexibility, a high-yield savings account may be more appropriate. If you want predictable returns and know you won't need your money before maturity, a CD may be a useful part of your savings strategy.
For people who don't want to choose a single maturity date, a CD ladder can provide a practical compromise by spreading money across certificates that mature at different times.
Ultimately, the right CD is the one whose rate, term, minimum deposit, and withdrawal rules fit your financial goals—not simply the one advertising the highest APY.
