Best 18-month CD rates of July 2024
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BLUEPRINT
Updated 5:18 a.m. UTC July 1, 2024
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The best 18-month certificates of deposit (CDs) offer yields that you could typically only get by locking in your cash for longer. But thanks to high inflation and the Federal Reserve raising interest rates, you can park your cash in a high-yielding savings product for a relatively short period of time and ride out the current turbulent economic moment.
Account details and annual percentage yields (APYs) are accurate as of June 27, 2024.
Compare the best 18-month CDs
| INSTITUTION | CD NAME | 18-MONTH CD APY | MIN. DEPOSIT | |||||
|---|---|---|---|---|---|---|---|---|
 | Synchrony Bank certificates of deposit | 4.50% | $0 | |||||
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 | Ally Bank High Yield certificates of deposit | 4.25% | $0 | |||||
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 | Capital One 360 certificates of deposit | 4.45% | $0 | |||||
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 | Barclays Online certificates of deposit | 4.50% | $0 | |||||
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 | Digital Federal Credit Union Regular certificates | 4.34% | $500 | |||||
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 | Marcus by Goldman Sachs High-Yield certificates of deposit | 4.70% | $500 | |||||
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 | First Internet Bank certificates of deposit | 4.98% | $1,000 | |||||
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Why trust our banking experts
Our team of experts evaluates hundreds of banking products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 330+ CDs offered by 46 institutions.
- 4 levels of fact checking.
- 50+ data points analyzed.
Ally Bank High Yield certificates of deposit
Capital One 360 certificates of deposit
Digital Federal Credit Union Regular certificates
Marcus by Goldman Sachs High-Yield certificates of deposit
First Internet Bank certificates of deposit
Methodology
We analyzed more than 330 CDs offered by 46 institutions and gave each a score out of 100. CDs with a score of 100 earned five stars; those that scored 80 earned four stars; and so on. Below are the factors that went into our scoring and how we weighed each.
- APY: 70%.
- Customer experience: 10%.
- Minimum deposit: 5%.
- Compound interest schedule: 5%.
- Digital experience: 5%.
- Available terms: 3%.
- Availability: 2%.
The point of a CD is to earn a high yield on your cash, so we gave it the highest weighting in our methodology. We also gave weight to CDs that compound daily, since you’ll earn a little bit extra than if it compounded monthly or quarterly.
Still, it’s important to take other factors into consideration, and offer a range of winners. After all, you may be willing to sacrifice a few hundredths of a percentage point if it means opting into a bank with good customer service and a robust digital offering.
National average rates for CDs
The Federal Deposit Insurance Corporation (FDIC) tracks the average rates paid on CD accounts nationwide. While the agency doesn’t post rates for 18-month CDs, it does for other term lengths. As of June 17, 2024, the average 12-month CD paid 1.86% APY and the average 24-month CD paid 1.57% APY. The average 18-month CD rate likely falls somewhere in the middle.
What is an 18-month CD?
A certificate of deposit, or CD, is a type of savings product that requires you to put money into an account and keep it there for a set period of time. In exchange, you earn a guaranteed interest rate. Annual percentage yields, or APYs, are often higher on CDs compared to standard savings accounts.
CDs are described by their term — an 18-month CD is a certificate of deposit with an 18-month-long term.
Quick Tip. An 18-month CD is a great prong for a CD ladder. Consider opting for CDs with terms of 6, 12 and 18 months so you can balance yields and access to cash.
If you withdraw your CD funds early, you’ll typically pay a penalty and give up some of your interest. The early withdrawal penalty is usually tied to the term length and longer-term CDs often have steeper penalties. Once the CD reaches maturity, you can choose to renew the CD or withdraw the funds along with the interest you earned.
What is a good CD rate for an 18-month term?
CD rates fluctuate, so what’s considered a good rate will change depending on the current interest rate environment.
“A good rate on an 18-month CD is one that is higher than the current average rate,” said Michael Collins, a chartered financial analyst (CFA) and chief executive of WinCap Financial.
Be sure to look around for the best rates.
Many online banks offer rates well above the national average. For example, Ally Bank, Sallie Mae Bank and Synchrony Bank all offer rates above 4% on 18-month CDs.
Short-term vs. long-term CDs
You can find CDs with just about any term length, but most financial institutions offer CD terms ranging from three months to five years (some go even as long as 10 years). Short-term CDs generally have terms of one year or less, while mid-term CDs are between one and three years, and long-term CDs lock up your funds for even lengthier terms.
Shorter-term CDs require less of a commitment, but they often have a lower earning potential because your money doesn’t have much time to grow.
Quick tip. You may earn higher yields with short-term CDs, but consider opting for a long-term CD to lock in a high rate that may not be available for years to come.
The typical upsides to mid-term and long-term CDs are higher APYs and more time for your money to grow.
“You have more time to benefit from the higher interest rates associated with longer terms,” said Collins. “[But you’ll be] locked into the fixed rate for the duration of the term, which could mean missing out on potential gains from higher rates later on.”
CDs with distant maturity dates could also cost you in the form of interest and penalties if you need to withdraw money early. So before opening a CD, consider which term works for you and your money goals.
Is an 18-month CD term right for you?
If you want a guaranteed APY at a relatively high rate, and you don’t mind locking away your funds, an 18-month CD can be a good idea. While 18-month CDs have come down slightly in recent months, you can still find some options that offer yields close to 5%.
CD rates generally trend with the federal funds rate, which is controlled by the Federal Reserve. The central bank raised that benchmark rate more than 10 times in 2022 and 2023, so CD rates followed suit.
Looking for the best CDs? Consider our top picks.
But the hikes will eventually peter out, causing CD rates to plateau and eventually drop.
“[If you think rates are going down], it could be a good idea to lock in a good interest rate with an 18-month CD rate now,” said Lawrence Sprung, a certified financial planner, wealth advisor and founder of Mitlin Financial.
But if you believe rates are trending upward, you may want to choose a shorter term. This gives you the flexibility to potentially snag a higher rate when your CD matures.
Choosing the best 18-month CDs
CD rates are near the highest they’ve been in more than a decade, so plenty of banks and credit unions are offering them. Here are some ways to make sure you find the best one.
Check your options
Besides CD terms, you can also choose between CD types:
- A standard CD allows you to make one initial deposit and doesn’t allow for early withdrawal without penalty.
- No-penalty CDs don’t charge fees for early withdrawal, but they typically offer lower APYs.
- In a rising-rate environment, bump-up CDs allow you to request a one-time APY increase during the term.
- Add-on CDs allow you to deposit more money into the CD account over time.
Shop around
The main purpose of opening a CD is to earn money, so research several institutions to find the best deal. Generally, online banks and smaller financial institutions tend to offer the highest rates.
Carefully read the terms and conditions
Understand the rules surrounding minimum deposits, withdrawal allowances, penalties and fees before opening a CD account.
Consider deposit insurance limits
Banks and credit unions that are federally insured each provide up to $250,000 in deposit insurance per depositor and per account type. If you’re putting more than $250,000 in CDs, consider spreading out the funds at different institutions to make sure each CD account receives full coverage.
“The last thing you want to do is have more than the FDIC limit in one bank, and wake up one day to learn that the bank has failed and your entire deposit will not be insured,” said Sprung.
Frequently asked questions (FAQs)
The answer depends on your needs. An 18-month CD could be a solution to locking in a high yield and earning some extra cash without forgoing liquidity long-term or taking on the risk inherent in the stock market. You may not want one (or you may want to invest a smaller sum) if you decide a better potential return is worth the risk or if you see a future need for the funds that’ll occur before the year-and-a-half term is up.
The answer depends partly on your needs. If you’ll need to withdraw money in the near term, then opening a high-yield savings account will give you the liquidity you need without incurring penalties. Money market accounts (MMAs) are another option — they act like a savings account, but you usually earn a higher APY on larger balances and receive a debit card or checks to make withdrawals.
Online banks often offer high-yield CDs with the best rates. These institutions operate online, which means they have lower overhead costs and can pass on the savings to customers. Smaller financial institutions also typically offer good CD rates to attract new depositors. And credit unions tend to offer higher CD rates compared to banks.
You could lose money on an 18-month CD if you make an early withdrawal and the CD provider charges a steep penalty that eats into your principal. The penalty, however, depends on the CD and the institution — not every bank is so strict.
A CD ladder is a savings strategy that involves multiple CDs of different term lengths. The end goal is to have a series of long-term CDs that mature at regular intervals. The idea is that this diversification allows you to lock in high yields and retain some liquidity.
For example, imagine having a one-, two-, three-, four- and five-year CD. As each matures, you roll over the funds into a five-year CD. By the end of the ‘ladder climb,’ you have five five-year CDs, with one maturing each year.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
