Zip Codes With the Highest CD Rates in the US
Certificates of Deposit (CDs) are financial products banks, credit unions, and other financial institutions offer the public. They function as fixed-interest savings accounts and require people to lock their funds for a set period with the financial institution to avoid penalties. CDs can be considered as some of the safest options to put one’s money in, and they can be ideal, especially for seniors, since they have guaranteed returns and are minimally affected by market volatility.
Types of Certificates of Deposits (CDs)
- Standard CDs
This type of CD comes with a fixed interest rate, a fixed term starting usually at three months, a minimum deposit requirement, a penalty for early withdrawal, and deposit insurance.
These are usually offered by online banks and credit unions. Depositors get the highest interest rates because the banks offering them do not have overhead costs like maintaining branches or ATMs.
The minimum deposit is usually $50,000 to $100,000, and is suitable for those with larger cash reserves.
As the name suggests, the depositor does not pay any early withdrawal fees, but their rates tend to be lower than the high-yield CDs.
These CDs are held within an individual’s retirement account and are part of the retirement savings. Since both CDs and IRAs hold funds for people to use at a later date, this can be a good saving option for seniors nearing retirement.
In this type of CD, the interest rate increases during the term, and either an individual or the bank can decide when it comes into effect. For example, with step-up, the bank is the deciding member, and the rate change has a fixed schedule. With bump-up CD, the account holder can request a rate boost whenever there’s a change.
What are the current CD rates?
When the CD rates are fixed, one knows exactly how much they will earn by the end of their lock-in period. Currently, the national average annual percentage yield (APYs), which greatly varies according to the term of one’s deposit, is 1.72% for one year and 1.43% for five years. The rate also varies according to the bank or credit union and other agreement clauses like early withdrawal penalties or reinvestment preference.
Which states in the USA have the highest CD rates
- CD rates in Texas
On average, the high-yielding rates in Texas range from 4.00% to 5.00% APY. One should remember that CD rates fluctuate based on term length, and long-term ones yield higher returns. Texas banks usually offer the best CD rates for long-term CD terms of up to five years or even seven years. For example, as per the ZIP codes, Texas 77494, 77084, 78660, and 77449 see approximately 4.00 to 5.30% APY for a one-year term. - CD rates in Florida
In Florida, one-year CD rates typically range from 5.20% to 5.40%, and seniors can potentially get higher rates. With around 90 banks and 120 credit unions active in the state and digital-online institutions, one can find plenty of options to choose from. As per the ZIP codes, Florida’s 32003, 32009, 32024, 32025, and 33469 see 3.80% to 5.04% APY for 18 months with a minimum deposit starting from $500. - CD Rates in New York
New York also offers some of the best CD rates, with the current highest APY being around 5.35%. The best rates can be found at credit unions and online banks rather than traditional banks.
According to the latest research, New York ZIP codes like 10001, 10012, 10152, 10303, 10475, and 11120 see the highest CD Special APY for seven months, which goes up to 4.75% with a minimum deposit ranging from $1,000 to $5,000. These rates depend on the bank and ZIP code. - CD rates in California
California folks can find CD rates that top 5.00% APY, but one should also be aware of any early withdrawal penalties since some institutions may have these in place that can affect one’s overall gains. It’s best to go for a high-yielding CD if one expects to cash out earlier than maturity. In California, for example, almost all ZIP codes from 90001 to 96161 have the highest CD rate of up to 5.04% by APY for an 18-month deposit term. For three years, the CD rate goes up to 4.66% APY. - CD rates in Ohio
CD rates in Ohio can range between 4.00% and 5.00%, but the rates depend on account and term. Some may offer rates from 2.75% to 5.05%, while some higher-end CD rates may have minimum deposit requirements. To compare the best CD rates in Ohio, one can compare different APYs, minimum deposits, and compounding schedules online. To give an example, ZIP codes like 43002, 43086, 43015, 43036, 43070, and others offer around 2.45% to 5.30% APY for a six-month term with a minimum deposit ranging from $0 to $2,500.
Many banks offer higher interest rates for regular CDs for seniors over the age of 60. Since these rates may fluctuate based on various factors, those interested in maximizing their returns should check the current rates of their preferred banks on the bank’s website.
