Certificates of deposit methodology

Thousands of banks across the US offer certificates of deposit (CDs). And while credit unions do, too, they typically call them “share certificates.” Regardless of what name they go by, CDs and share certificates both let you earn interest at a steady rate without any level of risk.

But not all certificates are equal. Depending on their specific features, the amount of interest you could earn over a period of time might drastically vary. We analyze and weigh two factors equally when rating CDs: minimum deposits and annual percentage yields (APYs) relative to term length.

Here’s a breakdown of those specific characteristics and their corresponding ratings. When it comes to APY, we divide it up based on term length and according to the average rate provided by the Federal Deposit Insurance Corporation (FDIC).

Our ratings

We use a 1- to 5-star system to rate CDs:

★★★★★ — Excellent

★★★★☆ — Good

★★★☆☆ — Average

★★☆☆☆ — Subpar

★☆☆☆☆ — Poor

How we rate minimum opening deposits

CDs require a minimum opening deposit of at least $500, but there are exceptions. Institutions that require more than that amount usually have minimums of $1,000 or $2,500. However, we’ve seen CDs with minimum deposits as high as $5,000.

There are some cases where a bank requires a different minimum opening deposit depending on the chosen term. In these cases, we rate the CD based on the average minimum deposit across all terms. Based on the amount required to open a certificate, we rate institutions on the following scale.

★★★★★ — $0 to $500

★★★★☆ — $501 to $1,000

★★★☆☆ — $1,001 to $2,500

★★☆☆☆ — $2,501 to $5,000

★☆☆☆☆ — $5,001 or more

How we assess interest rates

Different banks and credit unions offer CDs for various lengths of time, ranging from as short as seven days to as long as 20 years. For our ratings, we consider the term lengths that the FDIC uses in its monthly updates on national rates.

However, we don’t include one-month certificates because they’re relatively uncommon. If a bank or credit union doesn’t offer a CD for a specific term used by the FDIC, we don’t penalize it: Instead, we simply don’t rate it.

Each of the standard term lengths has its own APY rating based on the FDIC’s average rates. Here’s how our rating scale correlates with each of the standard terms, spanning from three months to five years. The average rate for each term is given 3 stars.

And we award 4- and 5-star ratings based on the average APYs among the highest-earning CDs we’ve seen per term.

3 months (90 days)

★★★★★ — 0.40%+

★★★★☆ — 0.22% – 0.39%

★★★☆☆ — 0.07% – 0.21%

★★☆☆☆ — 0.02% – 0.06%

★☆☆☆☆ — 0.00% – 0.01%

6 months (180 days)

★★★★★ — 0.65%+

★★★★☆ — 0.25% – 0.64%

★★★☆☆ — 0.09% – 0.24%

★★☆☆☆ — 0.04% – 0.08%

★☆☆☆☆ — 0.00% – 0.03%

12 months (one year)

★★★★★ — 0.70%+

★★★★☆ — 0.30% – 0.69%

★★★☆☆ — 0.14% – 0.29%

★★☆☆☆ — 0.09% – 0.13%

★☆☆☆☆ — 0.00% – 0.08%

24 months (two years)

★★★★★ — 0.75%+

★★★★☆ — 0.50% – 0.74%

★★★☆☆ — 0.17% – 0.49%

★★☆☆☆ — 0.12% – 0.16%

★☆☆☆☆ — 0.00% – 0.11%

36 months (three years)

★★★★★ — 0.80%+

★★★★☆ — 0.40% – 0.79%

★★★☆☆ — 0.20% – 0.39%

★★☆☆☆ — 0.15% – 0.19%

★☆☆☆☆ — 0.00% – 0.14%

48 months (four years)

★★★★★ — 0.80%+

★★★★☆ — 0.40% – 0.79%

★★★☆☆ — 0.22% – 0.39%

★★☆☆☆ — 0.17% – 0.21%

★☆☆☆☆ — 0.00% – 0.16%

60 months (five years)

★★★★★ — 0.85%+

★★★★☆ — 0.45% -0.84%

★★★☆☆ — 0.27% – 0.44%

★★☆☆☆ — 0.22% – 0.26%

★☆☆☆☆ — 0.00% – 0.21%