Best 10-year CD rates of June 2023 – USA TODAY Blueprint

Best 10-year CD rates of June 2023

Compare the best 10-year CD rates

Choosing the best 10-year CD rate

Choosing the highest rate is pretty much a no-brainer in most cases. For example, here’s the difference APY can make on your bottom line if you invested $5,000 in a 10-year CD with monthly compounding interest.

Interest earned on 10-year CDs

Yet, when picking the best 10-year CD, consider more than the interest rate.

“Weigh factors such as minimum deposit requirements, fees and early withdrawal penalties,” said Michael Ashley Schulman, chief investor officer at Running Point. “Fees and penalties can easily water down the interest you earn.”

What about brokered CDs?

Normally, people open CDs at banks or credit unions. However, you may find the highest CD rate at an investment firm or offered by an independent sales professional. 

A “brokered CD” may pay an attractive interest rate, but CD brokers aren’t licensed, certified or regulated the same way that banks and credit unions are. Before you open one, be sure you understand how it’s insured (if at all) and any risks involved.

How to open a 10-year CD

Opening a 10-year CD is a lot like opening a savings or checking account. Here are the steps.

1. Hunt for an institution where your money will be federally insured. Check on the website of whatever financial institution you’re considering to see if they’re federally insured. You can also use the FDIC’s BankFind tool and the National Credit Union Administration’s Research a Credit Union tool to double check.
2. Choose the kind of CD you want. Numerous types of CDs are available, including traditional CDs, which pay a fixed interest rate; bump-up CDs, which allow you to move to higher APY if the rate goes up before a CD matures; and jumbo CDs, which normally demand that you make a big deposit.
3. Pick the method for getting interest payments. Interest payments may be available on a monthly, quarterly, semiannual or annual basis. You could also choose to reinvest your interest and only take the payout at the CD’s maturity.
4. Open the account. If you’re not already a member or a customer of the financial institution, it will ask for personal details such as your name, address, date of birth and Social Security number when you apply to open a CD. Methods for opening a CD depend on the bank, but can be done online, through a mobile app, at a branch or over the phone.
5. Fund the CD. You can deposit the money online, with an over-the-phone transfer or with cash or a check. The CD may have a minimum deposit amount, which you could exceed if you wish.

Are long-term CD rates rising?

Yes, CD rates have been on the rise. For example, FDIC data shows that the average 5-year CD rate more than tripled over the past year, rising from 0.32% in April 2022 to 1.37% just 12 months later.  

CD rates, along with rates for mortgages, savings and credit cards, have all shot up, keeping pace with the Fed’s benchmark interest rate. 

This benchmark, known as the federal funds rate, is what banks charge each other for short-term loans. When the federal funds rate changes, interest rates across the board follow suit, whether it’s up or down.

And the wild card in all of this is whether a recession will hit the U.S. sometime in 2023. If it does, the Fed may lower the federal funds rate in an effort to boost the economy. A fall in CD rates likely would follow.

Fortunately, you lock in a fixed interest rate when you set up a traditional CD. 

Therefore, if you opened a 10-year CD before the Fed cuts the benchmark interest rate, your initial APY would remain in effect until the CD matures. In other words, your 10-year CD would escape any seesawing of interest rates for years to come.

Is a 10-year CD worth it?

Among finance professionals, opinions of 10-year CDs are mixed.

“Choosing a 10-year CD may not be the best investment for everyone,” said Krisstin Petersmarck, investment advisor at Bridgeriver Advisors in Bloomfield Hills, Michigan. ‘While investing in a CD is considered low risk with a guaranteed interest rate, tying up your money for 10 years can be a major commitment. In the current environment, there are better interest rates available for CDs with a shorter duration.” 

Ben McLaughlin, president of SaveBetter, agrees.

“A 10-year CD may not be the best for your bottom line,” he said. “With this type of product, your money is locked up for quite a long period of time, and you may miss out on more attractive interest rates.” 

Learn more: When a CD makes sense for you.

However, better rates of return typically come with more risk; managing that can require you to actively work and pay attention to your investments or pay someone else to do so. CDs allow you to invest your cash and leave it without worrying. 

Because a 10-year CD has such a long term, you’ll earn more interest on it even if the rate is lower. For example, if you invested $10,000 in a CD that compounds monthly, here’s what you’d earn over different periods.

Other CD terms to consider

If you aren’t sold on sticking money in a CD for 10 years, you can pick from an assortment of other terms. Most financial institutions offer CD terms ranging from six to 60 months, though you can find terms as short as 28 days.

Here are the best rates on some of the most popular CD terms:

You could also combine multiple CD terms in an investment strategy called CD laddering. For example, imagine you purchase five: a two-year, four-year, six-year, eight-year and 10-year CD. As each matures, you reinvest it into a 10-year CD. This way, all of your funds are eventually in long-term investments, but you’re never more than two years away from being able to access some of your funds.

Here are some of the most well-known CD providers:

To decide which CD is right for you, answer these questions:

• Is it reasonable to say that you won’t need to use the money for the whole CD term? If a big purchase comes up, such as a car or a house, you may regret the investment.  
• What are the early withdrawal penalties? If something were to happen and you needed to cash it out, what fees would you incur? A penalty could take most of the interest you earned. A high-yield savings account may be more attractive. 
• Which CD term has the most attractive rates? Typically, the higher the rate and the shorter the term, the better. 
• Could a CD help diversify your portfolio? A long-term, conservative investment could help stabilize your portfolio against sudden market movements. 
• Would you forget about or lose track of the CD? While CDs typically have a grace period of seven days once they mature, if you don’t do anything, they automatically renew.

Methodology

APY 60%

Given that 10 years is longer than most celebrity marriages, you should be rewarded for your commitment. You don’t want to collect on your CD after a decade and see that it only earned a few hundred dollars. We weighed the yields that banks offered on their CDs as the strongest factor in our considerations. 

Customer service 10%

It’s nice to know that you’ll be able to interact with your account whenever and however you want. We looked at customer service availability, industry rankings from institutions including the Better Business Bureau, J. D. Power and TrustPilot. 

For customer service availability, we looked specifically on whether you could contact the bank 24/7 or just during normal business hours; and whether you had the option to call, email or chat. We figured this was important as many people have a preference on whether they’d like to talk with a person directly. 

Digital experience 10%

As many Americans rely on mobile apps, we also reviewed customer ratings on the banks’ mobile apps, looking at reviews on the Google Play Store and the Apple App Store. The more positive the ratings, the more points the bank earned and the more likely it was to make our list.  

Minimum deposit 8%

Putting money into a CD isn’t a priority for most Americans. Paying for housing, food, transportation and more for yourself and your family during a period of rising inflation is often hard enough. 

If you do want to stash away funds into a CD, however, it should be affordable. CDs with low minimum deposits were rewarded. 

Available terms 5%

It’s much easier to open another CD at the same place, rather than going through the process of opening another account at another institution. And, if you’re interested in a long-term CD, you’re most likely interested in other, shorter-term CDs as well. 

In that vein of thought, we rewarded banks that offer multiple CD terms. 

Availability 5%

We also judged the financial institutions on whether its services are widely available to Americans. Credit unions with super strict membership requirements and banks without national reach lost points in this category. 

Compound interest schedule 2%

The industry standard is daily compound interest that’s credited to the account monthly. Interest that compounds less often, such as monthly or quarterly, doesn’t make a huge difference in the total yield you can earn (in most cases), but it does make a difference. 

Why some banks weren’t chosen

Some of the most popular banks in the country aren’t on this list for the best no-penalty CDs. 

The largest financial institutions typically offer yields that are too low to merit consideration. As these big banks already have plenty of customers and assets, they tend to offer lower rates; whereas smaller banks typically offer better yields to catch your eye.  

Why trust us

John Egan
John Egan is a freelance writer and content marketing strategist in Austin, Texas. His specialties include personal finance, real estate, and health and wellness. His work has been published by outlets such as Forbes Advisor, CreditCards.com, Bankrate, Experian, Capital One, The Balance and U.S. News & World Report. In November 2022, he released his first book, The Stripped-Down Guide to Content Marketing.

Jenn Jones
Jenn Jones is the deputy editor for banking at USA TODAY Blueprint. She brings years of writing and analytical skills to bear, as she was previously a senior writer at LendingTree, a finance manager at World Car dealerships and an editor at Standard & Poor’s Capital IQ. Her work has been featured on MSN, F&I Magazine and Automotive News. She holds a B.S. in commerce from the University of Virginia.