Best 18M CD rates for September 2023

CDs, or certificates of deposit, are generally available in terms of three to 60 months. While the highest CD rates have traditionally been reserved for longer-term CDs, some of the best CD rates today are with short- and mid-term CDs. Many CDs also offer low minimum opening deposits, reasonable early withdrawal fees, and user-friendly mobile apps to make keeping track of your CD a breeze. With the best 18-month CD rates topping 5.00% APY, now might be a good time to put your money in a high-yield CD. Here are our top picks.

Limelight Bank is the online wing of Utah-based Capital Community Bank. Where possible, it ties its banking services to green initiatives, including supporting solar projects. And, like all banks, it has a reduced environmental footprint since it neither maintains physical branches nor uses as much paper as traditional banks.

• Limelight donates part of all deposits to solar energy initiatives.
• The early withdrawal penalty is 90 days of interest. 

• It isn’t easy to find product details on the website.
• The bank offers just four CD terms (ranging from six to 36 months). 

Minimum deposit: $10,000 

Popular Direct is the online bank associated with Popular Bank in New York City. It focuses on deposit products, including high-yield savings accounts and high-yield CDs with terms that range from 30 days to 6 years.

• Interest compounds daily.
• Customer service is available 24/7 by phone.

• The minimum deposit is higher than most online banks.
• The early withdrawal penalty is 270 days of interest, the steepest we’ve seen.

Synchrony Bank is a division of Synchrony Financial offering banking products, including savings accounts, CDs, and money market accounts. Its parent company is Synchrony is the nation’s largest provider of private-label credit cards, including those linked to popular brands like Amazon, eBay, Lowes, and Sam’s Club. 

• The mobile app is highly rated. 
• Bump-up, no-penalty, and IRA CDs are available.

• The early withdrawal penalty is 180 days of interest.
• You may find slightly higher rates elsewhere.

Minimum deposit: $25,000 

Merrick Bank is primarily a lender: It’s one of the 20 largest credit card issuers in the U.S. and also provides dealers of recreational products (R.V.s, boats, and the like) with consumer financing services. However, it also offers some of the highest CD rates right now — as long as you can afford the minimum deposit. 

• The early withdrawal penalty is 90 days of interest. 
• You can choose monthly interest payouts. 

• The minimum deposit is prohibitively high for some savers.
• Customer service isn’t open on weekends or holidays. 

Minimum deposit: $1,000 

Headquartered in Chicago, CIBC is a full-service bank that offers products geared toward both consumer and business clients. It’s one of the few banks on this list that provides an almost complete suite of banking services, if you want to open a CD somewhere you can handle the rest of your finances.

• The early withdrawal penalty is 30 days of interest, the smallest we’ve seen.
• It’s a one-stop shop for banking.

• The website is difficult to navigate.
• The mobile app is poorly rated.

Capital One has branches in a limited number of states, but it’s primarily an online bank — meaning you access your accounts online or via the bank’s robust mobile app. The CDs stand out for requiring no minimum deposit to open.

• A $0 minimum deposit means anyone can save. 
• You can choose monthly interest payouts. 
• The mobile app is highly rated.

First Internet Bank of Indiana started operating online in 1999 — back when the idea of banking entirely online was a novel idea. Today it offers a range of deposit and lending services to customers across the U.S.

• The website has transparent product information. 
• Opening an account is quick and easy.

• The minimum deposit is higher than some online banks.
• The early withdrawal penalty is 180 days of interest.

Minimum deposit: $1,000 

Founded in 1935, Alliant Credit Union serves some 700,000 members and has over $17 billion in assets, making it one the largest credit unions in the U.S. Since it’s a credit union, its deposits are insured by the National Credit Union Administration.

• Unlike many credit unions, anyone can become a member. 
• Standard, jumbo, and IRA certificates are available.

• The minimum deposit is higher than some online banks.
• The early withdrawal penalty is 120 days of interest.

Founded in 2009, Ally Bank offers one-stop online banking with competitive rates on deposit accounts, plus credit cards, investment accounts, and loans. Ally offers a 10-day best-rate guarantee, so you get the best rate for your balance and term if rates increase within 10 days of opening or renewing a CD.

• It’s easy to find transparent product information on the website. 
• The mobile app is user-friendly.
• The early withdrawal penalty is 60 days of interest, which is lower than most banks. 

An 18M CD is a certificate of deposit that pays a fixed interest rate for 18 months. During that time, you can’t add or remove any money. If you need cash sooner, you have to withdraw the entire balance and pay an early withdrawal penalty. While penalties vary by bank and CD term, they typically range from 60 to 180 days of interest for 18-month CDs (an early withdrawal penalty may be worth it if you lock in a better APY with a new CD). In exchange for keeping your cash locked up, you’ll generally earn a higher APY than savings and money market accounts pay. 

An annual percentage rate, or APY, is a percentage that reflects how much interest you’ll earn in a deposit account over one year. For example, if you have $10,000 in a savings account earning a 5.00% APY, you’ll have $500 in interest after one year. APY includes compound interest — meaning you earn interest on your interest. By contrast, simple interest earns interest only on the principal (your deposits). For this reason, the APY is always a little bit higher than the interest rate. 

An 18M CD is an excellent option if you want to park some cash while earning a solid return on a low-risk investment. CDs held at FDIC-member banks and NCUA-member credit unions (where CDs are referred to as “certificates”) are insured up to $250,000 (or $500,000 for joint accounts). The best 18M CD rates are topping 5.00% APY, so you can keep your money safe while letting it grow (you’ll find the best CD rates at online banks). 

You can add money to a CD just once: When you open and fund the account. If you want to put more money to work, consider opening another CD or creating a CD ladder by dividing your deposit into multiple CDs with different maturities. When rates rise, you can renew your shorter-term CDs at a higher rate (you might find better rates by switching banks). When rates fall, you have a higher APY locked in with your existing longer-term CDs.  

If you’ll need your cash sooner, consider putting your money in a shorter-term CD or a no-penalty CD. These types of CDs can sometimes offer higher interest rates than a savings account without forcing you to part with your money for too long.

However, if you can afford to have some money stashed away for a while, a longer-term CD is a good option to lock in a strong APY for two, three, four, or five years. Of course, many banks offer one CD term with an attention-grabbing rate and lower rates for everything else. So, sometimes, it makes financial sense to pick a slightly shorter or longer CD term than you initially wanted to take advantage of a better rate.  

When you open a CD, you agree to leave the account alone for the entire term —with no money going in or out. Of course, situations change, and you might need your cash sooner than expected. While you can withdraw your funds before the CD matures, the bank will impose an early withdrawal penalty if you do. Penalties vary by bank and CD term, with stiffer penalties applying to longer-term CDs. If there’s a chance you might need your money early, focus on banks with lower penalties or consider putting your cash into a high-yield savings account. Rates at the best banks and the best online banks are topping 5% right now on these types of accounts, too.

CDs offer potentially higher yields than savings accounts, a guaranteed rate of return, and virtually no risk. Still, CDs have disadvantages, including early withdrawal penalties and low returns compared to stocks, ETFs, and other investments with more risk. 

Overall, CDs can be worth it when you want the security they offer: You earn a guaranteed APY and don’t have to worry about losing your investment. (For another low-risk investment, consider a Series I savings bond.) CDs also make sense if you want to keep your cash out of reach (and earn some interest) while saving for a short-term goal. Conversely, there may be better choices than CDs if you want access to your savings or are comfortable taking on more risk in exchange for higher potential returns. 

Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.

This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as the Home and Financial Services Editor for the Hearst E-Commerce team. Email her at [email protected].