Best High-Yield CD and Annuity Rates of October 2025: Earn Up to 5.25% APY

The right financial product between a CD account and a high-yield savings account will depend on your needs and goals.

CD accounts often pay higher APYs than savings or money market accounts. Banks and credit unions often offer these higher rates to incentivize you to keep your money with them for an extended period. In general, the longer the CD term, the higher the interest rate you're likely to receive. Unfortunately, some come with minimum deposit requirements, though this isn't the case with every CD. CDs could also have better rates but require you to lock your money up for a set time period. If you need to access your money before the CD term ends, you might have to pay a penalty to withdraw money early.

High-yield savings accounts could provide a decent interest rate today, but your rate isn't locked in for a set period. If interest rates decrease, you might not earn as much money in a high-yield savings account over the same period as you would with a CD. These accounts could be a good option for an emergency fund, as your money is more easily accessible and they may offer a higher yield than a traditional savings account.

Institutions might offer a variety of CDs with different rates and terms to attract customers. Here are some general types of CDs commonly offered.

• Traditional CDs: These are basic CDs with a set term and interest rate. They may have early withdrawal penalties, depending on the account and bank.
• No-penalty CDs: These CDs might allow you to withdraw money before the term expires without paying a penalty.
• Jumbo CDs: These CDs generally have large minimum balance requirements and may offer higher interest rates due to these requirements.
• Potential rate increase CDs: These CDs might allow you to increase your interest rate if CD rates increase during a certain period.
• High-yield CDs: These CDs focus on offering the best interest rates available for a particular term.

CD accounts generally do not have monthly fees. You may have to pay a penalty to withdraw funds before a CD's maturity date, though. Check with your institution before opening a CD account if you have questions about fees or penalties.

If you withdraw from a CD early, you'll likely have to pay an early-withdrawal penalty. There are some exceptions to this rule, such as if you signed up for a no-penalty CD account. But most of the time, you'll have to pay at least seven days' worth of simple interest for withdrawing your money early — and most banks charge more than that. Check your account's terms and conditions for details.

Choosing the correct CD for you comes down to many factors. Here are several things you may want to consider to find the best account for you.

• NCUA- or FDIC-insured: Since certificates of deposit generally qualify for NCUA or FDIC insurance, which protects your money against the risk of loss. It's essential to pick a CD from a member FDIC or NCUA institution.
• Online vs. brick and mortar bank: People often have strong preferences about whether they want to bank online or in person. Take these feelings into account before choosing a CD. And keep in mind, online institutions could offer higher interest rates.
• Minimum deposit: Some banks and credit unions have minimum deposit requirements to open a CD account. These limits might be high in some cases, so double-check the minimums before choosing a CD.
• CD term: Choose a CD term you're comfortable with, unless you're opting for a no-penalty CD. Otherwise, you might have to pay penalties to access part or all of the funds in the CD before its maturity date.
• CD type: Banks offer several different CD options, including no-penalty CDs, CDs with a potential rate adjustment, and traditional CDs. Consider your needs to find the one that fits best for your goals.
• Interest rate: The interest rate determines how much money you'll earn from your CD. While shopping for the best interest rate is a good idea, you must make sure all other aspects of the CD fit your investing goals before looking at interest rates.