An 18-month certificate of deposit (CD) is a great option for investors looking for higher yields compared to a regular savings account while enjoying the same level of security through the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA) up to $250,000. For those who want to avoid stock market volatility but are risk averse, the fixed interest rate and relatively short duration make it an attractive option.
Summary
The best 18-month CD prices: Our 10 favorites*
The 10 best 18 month CDs for April 2024
First Internet bank
| 18 month APY | 5.04% |
| Minimum deposit | $1,000 |
| Early withdrawal penalty | 180 days of interest |
Why we chose it
An 18-month CD from First Internet Bank offers an APY of 5.04%. Your minimum deposit is $1,000, and like all CDs, it’s insured up to $250,000. Creating an account takes five minutes, including the time it takes to upload an image of your photo ID, and then you can access your account online.
Alliant Credit Union
| 18 month APY | 4.90% |
| Minimum deposit | $1,000 |
| Early withdrawal penalty | Up to 120 days of interest, depending on how many days the CD is open |
Why we chose it
As a credit union, your Alliant CD is insured by the NCUA up to $250,000. Your 18-month CD rate is a competitive 4.90% APR, but if you invest more than $75,000, you’re eligible for a jumbo certificate that often carries even higher rates. You can have a co-owner for standard and jumbo CDs.
MYSB Direct
| 18 month APY | 5.15% |
| Minimum deposit | $500 |
| Early withdrawal penalty | All interest earned |
Why we chose it
MYSB Direct has an 18-month certificate offering 5.15% APY. Unlike most banks, you don’t need a lot of money to invest. Instead, the minimum opening deposit is only 4.31. Creating an account takes just three minutes and you can fund it through Plaid or by manual transfer.
TAB Bank
| 18 month APY | 5.00% |
| Minimum deposit | $1,000 |
| Early withdrawal penalty | 180 days of interest on the amount withdrawn |
Why we chose it
With an 18-month TAB Bank CD, you must deposit a minimum of $1,000 and you will earn an APY of 5.00%. Unlike most banks, a TAB Bank CD compounds daily, while others compound monthly. This means that the interest you earn today will earn interest tomorrow, maximizing the compound interest on your deposit.
Allied Bank
| 18 month APY | 4.45% |
| Minimum deposit | $0 |
| Early withdrawal penalty | 60 days of interest |
Why we chose it
An 18-month CD with Ally Bank earns an APY of 4.45%. However, you are rewarded for your loyalty. When you renew your CD, you receive a 0.05% loyalty reward. There is no minimum deposit, and if rates increase within 10 days of your CD deposit, you will automatically receive the new higher rate.
Capital one
| 18 month APY | 4.45% |
| Minimum deposit | $0 |
| Early withdrawal penalty | 6 months of interest |
Why we chose it
Capital One is one of the few banks that requires no minimum deposit for its 18-month CD. You’ll earn an APY of 4.45% and can designate when you want your interest paid: at maturity, monthly, or annually. Keep in mind that if you choose the monthly option, you don’t benefit from the compound interest you could have earned on the interest you withdraw.
First Alliance Bank
| 18 month APY | 4.75% |
| Minimum deposit | $500 |
| Early withdrawal penalty | 90 days of interest on the amount withdrawn |
Why we chose it
Prime Alliance is another of the few banks that allows its customers to access a CD at a lower entry point. It requires a minimum deposit of $500. You’ll earn 4.75% APY on an 18-month CD, and you can even open an 18-month Individual Retirement Account (IRA) CD, which gives you the fixed returns of a CD in a retirement account.
Marcus by Goldman Sachs
| 18 month APY | 4.60% |
| Minimum deposit | $500 |
| Early withdrawal penalty | 180 days of interest on the initial capital at the CD rate |
Why we chose it
Most financial institutions will not allow you to add money to your CD after you open it. However, Marcus by Goldman Sachs allows you to call and increase your CD balance for 30 days (you cannot add funds online). After that, no more deposits can be made, but you can open an additional CD.
VIO Bank
| 18 month APY | 4.50% |
| Minimum deposit | $500 |
| Early withdrawal penalty | 3% of the amount withdrawn, plus a $25 fee |
Why we chose it
Vio Bank is another of the few institutions that offers CDs that compound interest daily. It only takes $500 to open and you’ll earn 4.50% APY. It’s also one of the few banks on this list that has weekend business hours (Saturday and Sunday). If you need customer support, you can get it even when most banks are closed for the weekend.
Loan Club
| 18 month APY | 5.00% |
| Minimum deposit | $2,500 |
| Early withdrawal penalty | 180 days of simple interest |
Why we chose it
LendingClub’s 18-month CD has a higher minimum balance than most banks on our list, at $2,500. However, it offers a competitive APY of 5.00%. Setting up an account only takes a few minutes, and you’ll also get FDIC insurance up to a maximum of $250,000 allowed.
Advantages and disadvantages of an 18 month CD
If you’re considering an 18-month CD, make sure it fits your financial goals. Here’s a look at the pros and cons.
Benefits
- Insured by the FDIC or NCUA: If you obtain the CD through a bank, you are insured by the FDIC. When purchasing from a credit union, you are covered by the NCUA. Both offer insurance up to $250,000.
- Competitive prices: An 18 month CD generally has better rates than a CD less than a year old. However, this is even more true in a low interest rate environment.
- Average financial goals: Compared to 3 or 5 year CDs, an 18 month CD offers a relatively quick return.
The inconvenients
- Interest rate risk: This is more of a concern in an environment where interest rates are rising, but you may not get a better rate if you’ve tied up your money prematurely.
- Duration: While not the longest CD length available, a lot can happen in 18 months. Make sure you have money set aside for emergencies so you don’t have to dip into your CD and pay an early withdrawal penalty.
- Rate lock: Most financial institutions do not provide any rate guarantees after financing your CD. Once you invest, if interest rates rise, you’re stuck with the lowest rate until the CD matures.
How to Choose the Best 18 Month CD
When choosing the best 18 month CD, make sure it meets your financial needs and goals. Here’s what to consider:
- Interest rate: Some rates may not be available to you unless you are local, or if it is a credit union you must be a member. Compare the rates of the institutions for which you are eligible. How is interest paid? When does it get worse?
- Early withdrawal penalty: If you need to access some or all of your funds early, what type of penalty will you pay?
- Minimum deposit: Do you have enough money to deposit the minimum required with the institution of your choice? Will depositing more get you better rates?
- Renewal conditions: What happens when the CD expires? Will you receive a reminder in advance? Is there a grace period before your money is blocked again?
Alternatives to 18-month CDs
CDs aren’t for everyone, and there are many alternative options that offer just as much security with more liquidity. Here are a few to consider:
- Savings accounts : A savings account offers more liquidity than a CD, although you’ll typically receive a lower interest rate in return.
- High Yield Savings Accounts: With a high yield savings account, you have more liquidity than a CD, although there may be transaction limits per month in exchange for a high interest rate. It’s not uncommon to see rates equal to some of the best CD rates.
- MMA: A MMA offers check-writing privileges and an attractive interest rate compared to a standard savings account.
Best CD prices for more durations
Be aware that not all banks offering higher interest rates are available nationwide. We prioritize selecting easily accessible options. Local or regional banks may offer more competitive rates, but they may not be easily accessible to customers outside their service area.
More CDs to consider:
Frequently asked questions
What is the most profitable CD rate currently?
The best paying CD depends on the length of the term, the amount you need to invest and the rates available to you. Rates fluctuate daily, but we have rounded some of the highest CD rates for your reference.
Who has the highest 18 month CD rate?
Banks change their rates frequently, so it changes from day to day. Based on our analysis, we saw consistently high rates from First Internet Bank, Alliant Credit Union, and MYSB Direct. This does not take into account local rates or institutions that are difficult to access to the general public.
How much do you make on an 18 month CD?
The amount you earn depends on the interest rate, compounding method, and amount invested. If you were to invest $10,000 at 5.00% APY, you would earn $759.30 in interest. Keep in mind that the APY already includes the cumulative factor.
