Best 6-month CD rates of November 2023 (Up to 5.50%)
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BLUEPRINT
Updated 4:05 p.m. UTC Nov. 22, 2023
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The best six-month certificates of deposit (CDs) offer you the best of both worlds: a robust interest rate with a short-term commitment. This gives you the opportunity to earn some cash on a chunk of change you’ll need soon, but not right away, especially in this topsy-turvy investing environment. In order to determine the best choice for you, we researched more than 80 financial institutions and 140 savings products.
Annual percentage yields (APYs) and account details are accurate as of November 20, 2023.
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.
Best 6-month CD rates
When making our selections, we strongly considered the APY offered by a particular CD, as well as any hurdles you’d have to jump through in order to qualify for it. Many CDs require a minimum deposit and credit unions often have membership qualifications. The best CDs have high rates and few requirements to attain them.
My eBanc Online Time Deposit
Michigan State University Federal Credit Union Certificate
Bank5 Connect High-Yield Certificate
Sallie Mae Bank CD
Synchrony Bank CD
Marcus By Goldman Sachs High-Yield CD
TAB Bank CD
HSBC Direct CD
Dollar Savings Direct CD
LimeLight Bank CD
Bethpage Federal Credit Union Certificate Account
CommunityWide CW Certificate Account
Compare the best 6-month CDs
Methodology
We looked at over 140 CDs offered by 84 financial institutions and evaluated them to create a star rating for each. An institution with a perfect score of 100 would get five stars. One with a score of 80 would get four stars and so on. Here are the categories we analyzed and how we weighted each.
- APY: 75%
- Customer experience: 5%
- Minimum deposit: 5%
- Compound interest schedule: 5%
- Digital experience: 5%
- Available terms: 3%
- Availability: 2%
We believe that potential earnings reign supreme, so a CD’s APY was the most heavily-weighed factor in our calculations. Non-APY factors still played a part, such as customer experience.
To round out the score, we analyzed CD accounts further, valuing those with lower minimum deposits, daily compound interest schedules (rather than monthly) and those that are nationally available (think credit unions with an open versus limited membership).
We monitor over 80 financial institutions, including Capital One, PenFed, Discover, Chase, TD Bank, Marcus by Goldman Sachs, TIAA Bank, Colorado Federal Savings Bank and American Express Bank.
Why some banks didn’t make the cut
Not all financial institutions made our list for the best six-month CDs. Those that earned much lower ratings didn’t make the cut because they had an overall low score due to poor APY, high minimum deposit requirements and poor customer ratings.
If you’re wondering why the largest banks in the nation didn’t make the cut, it’s primarily because they don’t offer the most competitive CD rates. Typically the highest APY CDs are offered by relatively smaller banks looking to make some noise and attract customers. The largest companies enjoy the benefits of being a defacto go-to when people think of opening a bank account.
National average interest rate for CDs
The national average rate for a 6-month CD (as of November 20, 2023) is 1.43% APY according to the Federal Deposit Insurance Corporation (FDIC). All of the CDs on our list offer significantly higher APYs than the national average:
Are short-term CD rates going up?
In short, all CD rates are going up.
As of November 17, 2023, the current national high rate for a 6-month CD is 5.59% APY according to Curinos data.
Over the last year, the Federal Reserve has been increasing the federal funds rate to combat inflation. As the central bank increases the federal funds rate, interest rates overall have risen. The last rate hike was on Dec. 15, 2022 and it’s possible more rate hikes are coming.
“The yield curve is currently inverted, meaning that shorter term CDs, such as one to two years, are yielding the same or more than five-year CDs”, said Seth Mullikin, CFP at Lattice Financial in Charlotte.
This points to the idea that rates will continue to rise in the short term. In fact, market observers expect the Fed to continue to increase rates over the next few months, or at least until inflation grinds down closer to the central bank’s 2% target.
The Fed could even reverse course later in 2023, or 2024, should the economy limp into recession. The potential of weak economic growth and lower rates is one reason why banks aren’t giving savers much of a premium on longer-term CDs.
When should you open a 6 month CD?
CDs are typically one of the safest places to store your cash and earn interest. Perhaps the biggest risk currently is that if you open a long-term CD now, you may miss out on an even higher rate a little later. This is where short-term CDs, including six-month CDs, come in.
“It would make sense to build a shorter-term ladder and reinvest”, said Mullikin. “If rates rise for five-year CDs, one can invest as the short term CDs mature”.
But you needn’t commit to a CD ladder in order to benefit from a six-month CD. For instance, you can park a chunk of your savings that you won’t immediately need into one of our picks and reap higher interest than you may receive from a savings account.
Tying up your savings—like, say, the down payment on your first home—may have another benefit: It’ll be harder for you to spend that money on other items.
When do shorter CD terms make sense?
Shorter CD terms serve well when you have a short-term savings goal, when you won’t need a chunk of money for a short period and when you think deposit rates will increase even more relatively soon.
They offer flexibility that longer-term CDs don’t and, typically, higher yields than savings accounts.
Learn more: The best CD rates.
They can also be used in combination with longer-term CDs to form a CD ladder, which is a savings strategy that uses staggered maturity periods so that you can optimize the yield on your savings.
Should I open a 6-month CD or savings account?
Savings accounts, especially high-yield savings accounts, are perfect places to store your rainy-day funds. They allow you to earn relatively high interest while still being liquid.
You should always have the money accessible so that you won’t need to go into debt if something happens, like a job layoff, a broken leg or an auto collision where you’d need to pay an insurance deductible.
Once you have three-to six-months worth of your expenses amassed in a traditional or online savings account, then look into investments like CDs.
How are 6-month CDs taxed
Generally, the interest you earn through a CD is considered taxable income.
“When tax forms are mailed out each year, you will receive a 1099-INT from the bank where you have your CD to report any interest you have been paid throughout the year”, said Desiree Kaul of Main Street Planning in Satellite Beach, Fla.
You pay taxes on CD interest in the year that the interest is earned. If your six-month CD starts in one year and ends in another, you’ll pay taxes on however much you earned in each year.
You have to include the information from the 1099-INT in your state and federal tax filings. It’s counted as part of your annual income and taxed accordingly. One possible exception is when the CD is part of your individual retirement account (IRA).
If it’s part of your traditional or Roth IRA, “then the rules are based on the IRA’s taxes”, said Nicholas Bunio, CFP in Downingtown, Pa. “If you use the money to buy investments in the account, there are no taxes due. If you take the money out, then either there are income taxes, penalties if you’re under 59 and a half”, or no taxes due if it’s a Roth IRA.
The financial institution with the best interest rates on savings products changes regularly. When you are looking for a six-month CD, compare rates across multiple lenders. Shopping around is the only way to know you are getting the best deal.
No one knows for sure CD rates rise and fall based on the national economy. If you think that CD rates will rise, choosing a six-month CD gives you more flexibility than a longer term because, after six months, you can move your funds into a CD with a higher rate.
The answer is: It depends. What are your financial goals? If you simply want to earn a high APY on cash that you don’t need to have at your beck and call right now, and you’re not interested in locking away your funds for longer, then a 6-month CD is worth it.
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.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
