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Top Long-Term CD (Certificate of Deposit) Rates

October 29, 2009 by Jim

posit are an important financial planning tool because they represent the safest investment you can make. You deposit funds, you get a guaranteed interest rate until the CD matures. You have to deal with inflation risk, that the rate of inflation could outpace your return, and the risk that you may need the funds. If you close a CD early, you will usually have to pay an interest penalty unless it’s a no penalty CD.

Personally, I don’t deposit funds into a long term certificate of deposit because I’m at an age where it doesn’t make sense from a financial planning perspective. We’re in our twenties so we’re thinking about things like starting a family and buying a home so a three-plus year CD wouldn’t make sense because our situation is changing so quickly. However, once it stabilizes, I see the value in saving money in longer term CDs as a way of planning for the future.

What I do use long term CD rates for is when I make investment decisions. CDs represent a 100% safe “investment” opportunity, so any potential investment is compared against a three or five year CD. If I can get a guaranteed 3% for a 5 year CD, why would I want to invest in something that has risk and only returns 3%?

Top Long-Term CD Rates

The following table lists the top CD rates for maturities of more than 24 months. In general, most will be 5 or 6 year CDs since the longer the maturity the higher the rate.

Bank	Effective Date	CD Rate (APY)	CD Term (Months)	Minimum Deposit
Ally Bank	10/30/09	3.25%	60	$0
Everbank	10/29/09	2.96%	60	$1,500
Bankrate National Avg	10/14/09	2.79%	60	$4,720
FNBO Direct	10/7/09	2.51%	60	$1,000
HSBC Direct	10/7/09	2.00%	48	$10
ING Direct	10/2/09	1.75%	60	$1
Penfed Credit Union	10/14/09	4.00%	84	$1,000
Discover Bank	11/3/09	3.70%	120	$2,500
E-LOAN	10/14/09	3.50%	72	$5,000
Citibank	10/14/09	3.25%	60	$500
Imperial Capital Bank	10/14/09	3.02%	60	$2,000
Capital One Direct Banking	10/14/09	2.95%	48	$5,000
Virtual Bank	10/14/09	2.89%	60	$10,000
Wachovia Bank	10/14/09	2.00%	27	$5,000

All of the banks on this list are FDIC insured up to $250,000.

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