13 best CD rates of July 2026: Earn up to 4.20% APY

Editor's Note: APYs listed in this article are up-to-date as of the time of publication. CNBC Select will update as changes are made public.

Certificates of deposit, or CDs, pay a fixed rate of interest over a set term that can range from a few months to more than a decade. You get the principal back when the term expires, along with the accrued interest.

With a traditional CD, accessing the funds early means paying a penalty. That makes CDs a good option if you need an incentive to avoid touching your savings. But it also means you should only allocate funds you're okay not having access to for months or even years.

CNBC Select has listed the financial institutions with the best CD rates as of the time of publication, including options for no-penalty CDs. Currently, the best rate is with Synchrony Bank, which has a 4.15% APY on its 14-month CD

For more on how we made our selections, see our methodology.

CD rates have been declining since the Federal Reserve began cutting rates in late 2024, but they continue to offer a guaranteed return on par with many high-yield savings accounts.

As of late May 2026, the best CD rates hover between 4.00% and 4.10% for short- and mid-term CDs, mostly from online banks and credit unions.

A certificate of deposit, or CD, is a type of savings account offered by banks and credit unions that pays a fixed interest rate for a set period of time. CD terms usually range from three months to 10 years, though some institutions offer terms of 20 years or longer.

In most cases, you can't access the funds before the CD matures without paying an early withdrawal penalty.

Since they're insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000, CDs are considered a safe financial product. If you open a CD with a credit union, it's insured by the National Credit Union Administration for the same amount.

While similar to a savings account, a traditional CD differs in several important ways:

1. You can only deposit funds at the beginning of the term. There may be a minimum deposit requirement (usually $500 or more).
   
2. Withdrawing funds before the CD matures typically means paying an early withdrawal fee, calculated as the loss of a specific amount of accrued interest. If the penalty exceeds the interest you've earned, your bank will take the remaining balance from your principal.
   
3. When the CD matures, you can access your original deposit and the accrued interest or roll the money over into a new CD. If you do nothing, most banks will auto-renew your CD at the rate offered at maturity.
   
4. Unlike the variable APY of a savings account, you lock in your CD's rate the day you open the account. That can be beneficial if you open an account before rates drop, but if rates rise, you'll miss out on potentially higher earnings.
   
5. Unlike some savings accounts, most CDs don't come with monthly fees. But since they're not designed for regular transactions, they don't come with an ATM card, either.

Choosing a CD comes down to understanding when you'll need your money, how much flexibility you want and which features matter most to you.

• Savings goal and timeline: Decide when you'll need access to your money. Short-term CDs (three to 12 months) offer more flexibility, while longer-term CDs lock your rate in for longer.
  
• APYs and terms: Shop banks, credit unions and online lenders to find the best interest rates for your chosen term length.
  
• Minimum deposit: CD minimum deposits can range from $100 to $1,000, with $500 being the most common amount and jumbo CDs can require as much as $100,000. Some institutions, including Ally Bank, have CDs with no minimum deposit requirement.  
  
• Early withdrawal penalty: Withdrawing funds before a CD matures typically incurs a penalty that can reduce your earnings. There are no-penalty CDs, but they often have lower rates.
  
• Interest rate environment: If the Fed is expected to lower its benchmark rate, it makes sense to lock in a competitive rate now. If rates are forecast to rise, however, a shorter-term CD or a laddering strategy would offer more flexibility.

• Automatic renewals: Some CDs automatically renew at maturity, potentially at a lower rate. Set a reminder to review your options before the renewal date.

Banks tend to offer several types of CDs, each designed for specific needs and limitations. Here's how they vary:

• Traditional CD: A standard CD with a fixed interest rate and a set term. You agree to leave your money untouched until maturity to avoid early withdrawal penalties.
• High-yield CD: A CD offering a higher-than-average return.
• No-penalty CD: Lets you withdraw your money before the term ends without facing an early withdrawal fee, usually after a short lock-in period.
• Bump-up (or step-up) CD: Allows you to request a higher rate once (or sometimes more) during the term if the bank's CD rates increase.
• Add-on CD: Lets you deposit more money into the CD after opening it — helpful if you want to build your balance over time without opening multiple CDs.
• Jumbo CD: In exchange for a higher rate, jumbo CDs require a larger minimum deposit, often $75,000 to $100,000.
• Brokered CD: Sold through brokerage firms instead of directly from a bank. They can offer competitive rates but may be riskier if sold on the secondary market.
• IRA CD: A CD held inside an individual retirement account, giving you the safety of a CD with the tax advantages of an IRA.

CDs are a good fit if you want a guaranteed return on your money and are comfortable not having access to it for months or even years.

Because the money is safely locked away, they work especially well if you have a specific savings goal, like a down payment on a house, a remodeling project or a vacation.

If a CD's fixed term or limited access doesn't suit you, you can consider these alternatives:

• High-yield savings account: Offers easier access to your money, although some banks limit withdrawals.
• Money market account: Combines a savings account with the benefits of a checking account, such as checkwriting privileges and debit card access.
• Investment accounts: Brokerage accounts, IRAs and robo-advisors offer greater return in exchange for more risk.

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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every CD list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking and savings products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

To determine which CDs offer the best return, CNBC Select analyzed dozens of banks, credit unions and online financial institutions. We found that the annual percentage yield (APY) offered by online banks and credit unions far outpaced most national brick-and-mortar banks. (Only credit unions with widely available memberships were considered.)

When ranking CD rates, we looked at APYs, as well as term lengths, minimum deposit requirements, penalties for early withdrawals and other factors.

We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.

Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.

Ally Bank is a Member FDIC.