If you’re seeking a secure, predictable return on your savings, a 5-year Certificate of Deposit (CD) might be the right choice. These accounts lock in a fixed interest rate for five years, offering stability in a fluctuating financial landscape. Currently, the national average for a 5-year CD is 1.34%, but select banks are offering significantly higher rates.
Why 5-Year CDs Matter:
CDs are a conservative savings tool, ideal for long-term goals like retirement or a down payment. Unlike stocks or bonds, CDs guarantee your principal. However, early withdrawals incur penalties, making them unsuitable for funds you might need access to quickly.
Top 5-Year CD Rates (November 2025)
Here’s a breakdown of the best rates available, as of today:
- Synchrony Bank: APY, no minimum deposit. Early withdrawal penalty: 365 days of interest. A solid choice for those with no immediate cash needs.
- Sallie Mae Bank: APY (requires $2,500 minimum). Early withdrawal penalty: 180 days of simple interest. Offers competitive rates with a moderate penalty for early access.
- Marcus by Goldman Sachs: APY (requires $500 minimum). Early withdrawal penalty: 180 days of interest. A well-known institution with relatively low barriers to entry.
- Bread Savings: APY (requires $1,500 minimum). Early withdrawal penalty: One year of simple interest. Competitive rates, but the withdrawal penalty is steeper.
- Alliant Credit Union: APY (requires $1,000 minimum). APY with $75,000+ balance. Offers tiered rates, with higher earnings for larger deposits.
- Lafayette Federal Credit Union: APY (requires $500 minimum). Early withdrawal penalty: 600 days of interest. Good rates, but membership requirements apply.
- Randolph-Brooks Federal Credit Union: APY (requires $1,000 minimum). APY with $75,000+ balance. Tiered rates, but membership is limited to Texas residents.
How Much Can You Earn?
The following table illustrates potential earnings based on deposit amount (assuming a 3.75% APY):
| Deposit Amount | Total Interest Earned (5 Years) |
|---|---|
| $1,000 | $193.75 |
| $5,000 | $968.75 |
| $10,000 | $1,937.50 |
CD Rate Trends: What to Expect
CD rates generally follow the Federal Reserve’s monetary policy. When the Fed raises interest rates, CD rates tend to rise, and vice versa. The Fed’s recent pause in rate hikes suggests rates may stabilize in the near term.
Historically, inverted yield curves (where short-term CDs pay higher rates than long-term ones) have been a sign of economic uncertainty. Currently, the market is not exhibiting this trend, but it’s a factor to watch.
Should You Lock In a 5-Year CD Now?
If you have funds you won’t need for five years and want a guaranteed return, a 5-year CD is a solid option. However, consider the potential for interest rates to rise. If you believe rates will increase, a shorter-term CD might be more advantageous.
Key Considerations:
- Early Withdrawal Penalties: Avoid early withdrawals to maximize earnings.
- Membership Requirements: Some institutions require membership or specific geographic eligibility.
- Rate Fluctuations: Monitor the market and consider shorter-term CDs if you anticipate rising rates.
Resources:
- Best 3-Month CD Rates
- Best 6-Month CD Rates
- Best 1-Year CD Rates
- Best No-Penalty CD Rates
Disclaimer: Rates are subject to change. Verify current rates and terms before opening an account.
