Maximize mid-term gains: the best 18-month CDs
Katherine Haan is a former financial advisor turned small business coach. Katherine holds an MBA, and is a former staff writer for Fit Small Business. She is a regular contributor to Forbes and maintains a popular lifestyle and travel blog.
Cassie is the business and banking editor at Fortune Recommends. She obtained her degree from Northern Kentucky University and is a certified SCRUM master. Prior to joining the team at Fortune Recommends, Cassie was a deputy editor at Forbes Advisor and a Central Operations Project Manager at Fit Small Business.
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. We’ve rounded up the best CD rates for those looking for 18-month account options.
Best 18-month CD rates of August 9, 2024
*APYs are current as of August 9, 2024 and are subject to change. Read our complete methodology here.
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The best 18-month CD rates: editors' picks*
While the banks above may be offering excellent rates, our team may not have vetted the institutions or their products. In contrast, we’ve conducted extensive research on the banks below and ranked them based on overall rates, minimum deposit requirements, and the ability to open and manage the account from anywhere.
*APYs are updated daily but are subject to change.
| Institution | Annual percentage yield (APY) | Minimum deposit | Withdrawal penalty | See details |
|---|---|---|---|---|
| First Internet Bank | 4.83 | $1,000 | 180 days’ interest | View offer at Bankrate |
| Alliant Credit Union | 4.50 | $1,000 | Up to 120 days’ interest, based on the number of days the CD has been open | View offer at Alliant Credit Union |
| MYSB Direct | 5.05 | $500 | All interest earned | View offer at Bankrate |
| Ally Bank | 4.25 | $0 | 60 days’ of interest | View offer at Bankrate |
| TAB Bank | 4.85 | $1,000 | 180 days’ interest on the withdrawn amount | View offer at Bankrate |
| Prime Alliance Bank | 4.75 | $500 | 90 days’ interest on the amount withdrawn | View offer at Bankrate |
| Capital One | 4.45 | $0 | 6 months of interest | View offer at Bankrate |
| Marcus by Goldman Sachs | 4.70 | $500 | 180 days of interest on the original principal at the CD’s rate | View offer at Bankrate |
| VIO Bank | 4.50 | $500 | 3% of the amount withdrawn, plus a $25 fee | View offer at Bankrate |
| LendingClub | 5.00 | $2,500 | 180 days simple interest | View offer at LendingClub |
| The best 18-month CDs: editors' picks* | ||||
|---|---|---|---|---|
| First Internet Bank | View offer at Bankrate | |||
| Annual percentage yield (APY) | 4.83 | |||
| Minimum deposit | $1,000 | |||
| Withdrawal penalty | 180 days’ interest | |||
| Alliant Credit Union | View offer at Alliant Credit Union | |||
| Annual percentage yield (APY) | 4.50 | |||
| Minimum deposit | $1,000 | |||
| Withdrawal penalty | Up to 120 days’ interest, based on the number of days the CD has been open | |||
| MYSB Direct | View offer at Bankrate | |||
| Annual percentage yield (APY) | 5.05 | |||
| Minimum deposit | $500 | |||
| Withdrawal penalty | All interest earned | |||
| Ally Bank | View offer at Bankrate | |||
| Annual percentage yield (APY) | 4.25 | |||
| Minimum deposit | $0 | |||
| Withdrawal penalty | 60 days’ of interest | |||
| TAB Bank | View offer at Bankrate | |||
| Annual percentage yield (APY) | 4.85 | |||
| Minimum deposit | $1,000 | |||
| Withdrawal penalty | 180 days’ interest on the withdrawn amount | |||
| Prime Alliance Bank | View offer at Bankrate | |||
| Annual percentage yield (APY) | 4.75 | |||
| Minimum deposit | $500 | |||
| Withdrawal penalty | 90 days’ interest on the amount withdrawn | |||
| Capital One | View offer at Bankrate | |||
| Annual percentage yield (APY) | 4.45 | |||
| Minimum deposit | $0 | |||
| Withdrawal penalty | 6 months of interest | |||
| Marcus by Goldman Sachs | View offer at Bankrate | |||
| Annual percentage yield (APY) | 4.70 | |||
| Minimum deposit | $500 | |||
| Withdrawal penalty | 180 days of interest on the original principal at the CD’s rate | |||
| VIO Bank | View offer at Bankrate | |||
| Annual percentage yield (APY) | 4.50 | |||
| Minimum deposit | $500 | |||
| Withdrawal penalty | 3% of the amount withdrawn, plus a $25 fee | |||
| LendingClub | View offer at LendingClub | |||
| Annual percentage yield (APY) | 5.00 | |||
| Minimum deposit | $2,500 | |||
| Withdrawal penalty | 180 days simple interest | |||
First Internet Bank
| 18-month APY | 4.83% |
| Minimum Deposit | $1,000 |
| Early withdrawal penalty | 180 days’ interest |
at Bankrate
at Bankrate
Why we picked it
A First Internet Bank 18-month CD offers a 4.83% 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 | 4.50% |
| Minimum Deposit | $1,000 |
| Early withdrawal penalty | Up to 120 days' interest, based on the number of days the CD has been open |
at Alliant Credit Union
at Alliant Credit Union
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 4.50% 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 | 5.05% |
| Minimum Deposit | $500 |
| Early withdrawal penalty | All interest earned |
at Bankrate
at Bankrate
Why we picked it
MYSB Direct has an 18-month certificate offering 5.05% 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 | 4.85% |
| Minimum Deposit | $1,000 |
| Early withdrawal penalty | 180 days' interest on the withdrawn amount |
at Bankrate
at Bankrate
Why we picked it
With a TAB Bank 18-month CD, you must deposit a minimum of $1,000, and you'll earn a 4.85% 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 | 4.25% |
| Minimum Deposit | $0 |
| Early withdrawal penalty | 60 days’ of interest |
at Bankrate
at Bankrate
Why we picked it
An 18-month CD with Ally Bank earns a 4.25% 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 |
at Bankrate
at Bankrate
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 |
at Bankrate
at Bankrate
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 | 4.70% |
| Minimum Deposit | $500 |
| Early withdrawal penalty | 180 days of interest on the original principal at the CD's rate |
at Bankrate
at Bankrate
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 |
at Bankrate
at Bankrate
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 |
at LendingClub
at LendingClub
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:
Methodology
The Fortune Recommends™ team uses third-party data from industry leader Curinos, updated daily, to determine the best possible CD rates available for consumers right now. This is the most significant determining factor when deciding which financial corporation to feature in our best CD rates articles.
Learn more: read about our banking methodology
Frequently asked questions
Are CDs FDIC insured?
Yes, certificates of deposit are insured by the Federal Deposit Insurance Corp. (FDIC). The FDIC insures all its members’ bank accounts, including savings, money market accounts, and CDs, up to $250,000 per customer per bank. Therefore, in the rare case of a bank failure, your money stays safe. If you take out a CD with a credit union, make sure it’s insured through the National Credit Union Administration (NCUA)—a similar institution to the FDIC that insures credit unions.
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.
About the contributors
Katherine Haan is a former financial advisor turned small business coach. Katherine holds an MBA, and is a former staff writer for Fit Small Business. She is a regular contributor to Forbes and maintains a popular lifestyle and travel blog.
EDITORIAL DISCLOSURE: The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends™ editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.