Interest rates on savings accounts and certificates of deposit (CDs) aren't what they were a few months ago. Many of the top banks had been offering APYs of 5.00% or higher, but some have already begun gradually dropping their rates in anticipation of Fed rate cuts later this year and into 2025.
Dropping rates is great news for borrowers, but it's a tough pill for savers to swallow. Fortunately, high rates are still out there if you know where to look. Here's one credit union that's still offering an incredible 6.00% APY on one of its CDs.
This CD could earn you 6.00% APY -- but only if you qualify for it
Financial Partners Credit Union, based in Southern California, is offering an especially competitive 8-month CD right now with a 6.00% APY. But there are a few things you should know before you open an account.
First, there's a $5,000 maximum deposit. If you contributed that much, you'd earn $198.05 in interest over the eight months. That's a great CD return, but it's not going to make you ultra wealthy.
Our Picks for the Best High-Yield Savings Accounts of 2024
Capital One 360 Performance Savings
APY 4.25% Rate infoSee Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY)is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings Member FDIC. | APY 4.25% Rate infoSee Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY)is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. | Min. to earn $0 |
American Express® High Yield Savings
APY 4.25% Rate info4.25% annual percentage yield as of July 4, 2024 Min. to earn $1 Open Account for American Express® High Yield Savings Member FDIC. | APY 4.25% Rate info4.25% annual percentage yield as of July 4, 2024 | Min. to earn $1 |
Citizens Access® Savings
APY 4.50% Min. to earn $0.01 Open Account for Citizens Access® Savings Member FDIC. | APY 4.50% | Min. to earn $0.01 |
Second, this offer is only available to new Financial Partners Credit Union members. And to become a member, you must meet the following criteria:
- Live, work, or go to school in Los Angeles, Orange, Riverside, or San Diego County; in addition to the City of South San Francisco and Alameda, California, or
- Be an employee or retiree of select employer groups
If you check one of these boxes, you must open a savings account with at least a $25 deposit. Then, you'll be free to open its special 8-month CD.
For most people, this isn't going to be an option, simply because most of us don't live in Southern California. Even those who are eligible for this offer may want to think carefully before going ahead with it. They'll be locking their money up for eight months, and accessing it early carries a penalty.
Alternatives to the 6.00% APY CD
You'll have a tough time finding 6.00% APYs with other banks, even those known for their high yields. But there are still several banks offering close to 5.00% APY on 1-year CDs. If you invested $5,000 in a 1-year CD with a 5.00% APY, you'd earn $250 in interest -- over $50 more than what you would've gotten with Financial Partners Credit Union's 6.00% APY CD.
You could also opt for a high-yield savings account if you're not comfortable locking your cash away. Unlike CDs, these accounts generally don't charge you penalties for taking your money out. But the tradeoff is that your rate isn't locked in for the full term. It can fluctuate over time, so you could wind up earning less with a savings account when interest rates drop.
You always have the option to split your savings between a savings account and a CD too. Put your emergency fund and cash you think you'll need before the CD term ends in a savings account to keep it accessible. Then, toss the rest of your cash in a CD where you can lock in a high rate for the next few months or even years.
These savings accounts are FDIC insured and could earn you 11x your bank
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.
