An 18-month certificate of deposit (CD) is a great option for investors looking for higher returns compared to a regular savings account while still enjoying the same level of safety due to Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA) protection of 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 rates: Our 10 top picks*
The 10 best 18-month CDs of April 2024
First Internet Bank
| 18-month APY | 5.04% |
| Minimum Deposit | $1,000 |
| Early withdrawal penalty | 180 days’ interest |
Why we picked it
A First Internet Bank 18-month CD offers a 5.04% APY. Your minimum deposit is $1,000 and, like all CDs, it’s insured up to $250,000. It takes five minutes to set up an account, 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’ interest, based on the number of days the CD has been open |
Why we picked it
As a credit union, your Alliant CD is insured by NCUA for up to $250,000. Your 18-month CD rate is a competitive 4.90% APR, though if you invest more than $75,000, you’re eligible for a jumbo certificate that often carries even higher rates. You can have a joint owner for both standard and jumbo CDs.
MYSB Direct
| 18-month APY | 5.15% |
| Minimum Deposit | $500 |
| Early withdrawal penalty | All interest earned |
Why we picked it
MYSB Direct has an 18-month certificate offering 5.15% APY. Unlike most banks, you don’t need a ton to invest. Instead, the minimum opening deposit is just 4.31. Setting up an account takes just three minutes, and you can fund it via Plaid or a manual transfer.
TAB Bank
| 18-month APY | 5.00% |
| Minimum Deposit | $1,000 |
| Early withdrawal penalty | 180 days’ interest on the withdrawn amount |
Why we picked it
With a TAB Bank 18-month CD, you must deposit a minimum of $1,000, and you’ll earn a 5.00% APY. Unlike most banks, a TAB Bank CD compounds daily, whereas others compound monthly. This means the interest you earn today will earn interest tomorrow, which will maximize the compound interest on your deposit.
Ally Bank
| 18-month APY | 4.45% |
| Minimum Deposit | $0 |
| Early withdrawal penalty | 60 days’ of interest |
Why we picked it
An 18-month CD with Ally Bank earns a 4.45% APY. However, you’re 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 making your CD deposit, you’ll receive the new, higher rate automatically.
Capital One
| 18-month APY | 4.45% |
| Minimum Deposit | $0 |
| Early withdrawal penalty | 6 months of interest |
Why we picked it
Capital One is one of the few banks that requires no minimum deposit for its 18-month CD. You’ll earn a 4.45% APY and can designate when you want your interest to pay―at maturity, monthly, or annually. Keep in mind that if you select the monthly option, you’re not benefitting from the compound interest you could’ve earned on the interest you withdraw.
Prime Alliance Bank
| 18-month APY | 4.75% |
| Minimum Deposit | $500 |
| Early withdrawal penalty | 90 days’ interest on the amount withdrawn |
Why we picked it
Prime Alliance is another one of the few banks that allows a lower entry point for its customers to get into a CD. 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 inside a retirement account.
Marcus by Goldman Sachs
| 18-month APY | 4.60% |
| Minimum Deposit | $500 |
| Early withdrawal penalty | 180 days of interest on the original principal at the CD’s rate |
Why we picked it
Most financial institutions won’t allow you to add more money to your CD after you open it. However, Marcus by Goldman Sachs allows you to call and add to your CD balance for 30 days (you cannot add funds online). After that, no more deposits can be made, although you’re welcome to 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 picked it
Vio Bank is another one of the few institutions that offer CDs that compound interest daily. It takes just $500 to open, and you’ll earn 4.50% APY. It’s also one of the few banks on this list with weekend hours—both Saturday and Sunday—so should you need customer support, you can get it even when most banks are closed for the weekend.
LendingClub
| 18-month APY | 5.00% |
| Minimum Deposit | $2,500 |
| Early withdrawal penalty | 180 days simple interest |
Why we picked it
LendingClub’s 18-month CD has a higher minimum balance than most banks on our list at $2,500. However, it does offer a competitive 5.00% APY. It takes just a few minutes to set up an account, and you’ll also receive FDIC insurance for up to the maximum of $250,000 allowed.
Pros & cons of an 18-month CD
If you’re thinking about an 18-month CD, make sure it fits your financial goals. Here’s a look at the pros and cons.
Pros
- FDIC- or NCUA-insured: If you get the CD through a bank, you’re FDIC-insured. When purchased through a credit union, you’re covered by NCUA. Both offer insurance up to $250,000.
- Competitive rates: An 18-month CD typically has better rates than a CD under a year. However, this is more true during a low interest rate environment.
- Midrange financial goals: Compared to 3- or 5-year CDs, an 18-month CD offers a relatively quick return.
Cons
- Interest rate risk: This is more of a concern during an environment where interest rates are rising, but you might miss out on a better rate if you’ve locked up your money prematurely.
- Duration: While not the longest CD term available, a lot can happen in 18 months. Ensure you have money set aside for emergencies so that you won’t have to dip into your CD and pay an early withdrawal penalty.
- Rate lock-in: Most financial institutions have no provision for rate guarantees after funding your CD. Once you invest, if interest rates go up, you’re stuck with the lower 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 rates: Some rates may not be available to you unless you’re local, or if it’s at a credit union, you must be a member. Compare rates across institutions you’re eligible for. How is interest paid? When does it compound?
- Early withdrawal penalty: If you must access all or part of your funds early, what kind of penalty will you pay?
- Minimum deposit: Do you have enough to deposit the minimum required at the institution you desire? Will depositing more earn you better rates?
- Renewal terms: What happens at CD maturity? Will you receive a reminder in advance? Is there a grace period before your money gets locked in again?
Alternatives to 18-month CDs
CDs aren’t for everyone, and there are plenty of alternative options that offer as much safety with more liquidity. Here are a few to consider:
- Savings accounts: A savings account offers more liquidity than a CD, although you’ll usually have 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 unusual to see rates equal to some of the best CD rates.
- MMAs: An MMA gives check-writing privileges and an attractive interest rate compared to a standard savings account.
Best CD rates for more terms
Be aware that not all banks with higher interest rates are accessible nationwide. We prioritize selecting options that are easily accessible. Local or regional banks may have more competitive rates, but they may not be readily available to customers outside of their service area.
More CDs to consider:
Frequently asked questions
What is the highest-paying CD rate right now?
The highest-paying CD depends on the term length, the amount you have to invest, and which rates are accessible to you. Rates fluctuate on a daily basis, but we have rounded up some of the highest CD rates for your reference.
Who has the highest 18-month CD rate?
Banks change their rates frequently, so this changes from day to day. Based on our analysis, we have seen consistently high rates from First Internet Bank, Alliant Credit Union, and MYSB Direct. This doesn’t take into account local rates or institutions not readily accessible to the general public.
How much do you make on an 18-month CD?
The amount you earn depends on the interest rate, the compounding method, and the amount invested. If you were to invest $10,000 at 5.00% APY, you’d earn $759.30 in interest. Keep in mind that APY already includes the compounding factor.
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