The best 6-month CD rates for July 2024: Earn up to 5.35%

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A certificate of deposit (CD) offers an easy and guaranteed way to grow your savings without taking on significant risk. Plus, interest rates on CDs have increased substantially over the past few years, even for shorter-term options.

Some short-term CDs offer better returns than longer-term CDs, allowing you to earn a competitive rate on your funds without committing to a lengthy term.

Best 6-month CD rates

We examined the CD interest rates across banks and credit unions to find the best options. Here are some of the best 6-month CDs, ranked from highest interest rate to lowest. CD rates are accurate as of July 2024.

How do 6-month CDs work?

A CD is a type of bank account that locks up your money for a set period to earn interest. At the end of a CD's term, you can withdraw the money or roll it into a new CD. 

CDs offer higher interest rates than savings accounts because you commit keeping the deposit untouched for the full six months. Breaking that commitment results in a penalty, usually a loss of several months' worth of interest. But leaving the money alone allows it to grow.

Interest accumulates based on the APY, compounding quarterly, monthly, or even daily. Reading the fine print ensures you pick the best return.

Benefits of opening a 6-month CD

While longer-term certificates of deposit (CDs) have traditionally offered higher returns, today's rising interest rate environment is making short-term CDs much more enticing. Here are some of top reasons why locking up your money in a 6-month CD may be smart:

• Higher rates than savings accounts: The top 6-month CDs pay over 5% in annual percentage yield right now. This blows traditional savings accounts out of the water, most of which pay a fraction of a percent. While your money is less accessible in a CD than in a liquid savings account, the tradeoff for substantially higher yields may be worth it if you don't need immediate access to the funds.
• Guaranteed returns: Unlike investing in stocks and bonds, which can fluctuate, banks guarantee you the Interest rate on a CD for the term. As long as you hold the CD to maturity, you are locked In to earn that return no matter what happens in financial markets along the way. This makes CDs a reliable fixed-income vehicle.
• Low minimum deposits: Many 6-month CDs have low minimum deposit requirements (some as low as $100 or $0), making them accessible even if you only have a small amount to invest.
• FDIC insured: CDs are insured by the FDIC up to $250,000 per person, per account. This helps lower your risk, as your principal and any earned interest would be protected in case of a bank failure.
• Penalty-free access: While early withdrawal results in a penalty of a few months' worth of interest, some CDs give a 10-day no-penalty grace period. This gives you penalty-free access to the funds for unexpected expenses before locking up your money.
• Auto-renewal options: Most CDs auto-renew at maturity, allowing you to easily roll over your CD to capture the latest rate environment without having to reinvest your money manually.
• Laddered strategies: With interest rates rising, laddering multiple 6-month CDs can let you capitalize on higher yields as each CD matures and resets to current rates. This blend of longer-term CDs with short-term CDs lets you access higher rates quickly while still diversifying maturity timeframes.

How to pick the right 6-month CD

When it comes to finding the right 6-month CD, you should balance potential interest earnings with minimum deposit requirements. Here’s what you should consider:

• Interest rate: First things first — you want to shop around for a CD with a competitive interest rate. The best CDs offer rates anywhere from 4% to over 5%.
• CD term: Can you leave your money untouched for six months without needing it? Consider how much extra cash you have and if you’re comfortable not accessing those funds until the term ends.
• Early withdrawal penalty: Unexpected expenses pop up, and you may need access to your money early. It’s worth considering how much the CD will charge you if you withdraw your money before the term ends.
• Minimum deposit requirement: Some CDs have minimum deposit requirements. Higher deposit amounts often yield better rates, but choose a CD that suits your budget.
• Insurance: Ensure the financial institution offering the CD is FDIC-insured or NCUA-insured. This insurance protects your money (up to a limit) in case of bank failure.

If you don’t have an account with an online bank, it may be an excellent time to consider opening one, says Christie Whitney, certified financial planner at Rebalance.

“[Online banks] tend to pay a significantly higher rate on CDs than the brick-and-mortar banks,” Whitney says, “If clients are uncomfortable with online banking, then a local credit union might have stronger rates. In today's markets, with the yield curve the way that it is, clients are better served looking at CDs of shorter duration.”

Who should get a 6-month CD?

Opening a 6-month CD may be a good idea for:

• Savers who want better returns without years-long commitment
• Investors seeking low-risk, FDIC-insured stability between riskier bets
• Retirees desiring to ladder CDs to create reliable cash flow
• Anyone with spare cash not needed for at least 6 months

The combination of high rates and short terms makes 6-month CDs attractive today.

Alternatives to 6-month CDs

If a 6-month CD doesn't work for you, there are other options to help you meet your savings goals without much risk.

• High-yield savings accounts: Designed for flexibility and accessibility, these savings accounts work the same as traditional ones but offer more competitive interest rates. Because high-yield accounts don’t come with the commitment of a CD, they’re more suitable for emergency funds or short-term goals.
• Money market accounts: These accounts combine the features of savings and checking accounts, offering higher interest rates and limited check-writing capabilities. They often have tiered interest rates based on your balance size.
• High-yield checking accounts: Like a high-yield savings account, high-yield checking accounts offer interest rates higher than regular ones. They’re more apt for earning interest on funds used for daily transactions.
• Treasury bills (T-Bills): T-Bills are short-term securities issued by the U.S. government, with maturities ranging from four weeks to 52 weeks. They're considered low-risk and are best suited for investors seeking safety and liquidity.

How we rated the best CDs 

To determine the best CDs, we carefully evaluated a wide range of factors, including interest rates, fees, and minimum deposit requirements.

Our team analyzed numerous CD offers and selected the top contenders based on these key criteria. The options on this list represent the best value benefits available.

Here are some of the key factors we considered: 

• Interest rate: The interest rate is the primary reason someone would choose a savings, CD, or money market account over another, so this is our most heavily weighted factor. 
• Fees: Fees, particularly early withdrawal penalties can eat into the overall cost of a CD.
• Minimum deposit & balance requirements: High minimum deposits can be a barrier, and high balance requirements to avoid fees or earn the best rate limit the CD's usefulness.

The bottom line

At the end of the day, a 6-month CD must meet your personal requirements to make sense. Review the interest rate, term, and minimum deposit amount on any CD you’re considering.

With rates this high, there has never been a better time to lock in a CD, especially if you have extra funds you don’t need immediately.

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.