Best 6-month CD rates for September 2023

6-month CD rates for September 2023: A six-month certificate of deposit (or “share certificate” in credit union parlance) is a certificate of deposit that yields a fixed rate of interest for six months. You can only contribute funds to a CD once (at account opening), and you are expected to leave the funds alone until the CD matures.

If you need your money sooner, you have to withdraw the entire amount and pay an early withdrawal penalty (an early withdrawal penalty can be worth it if you secure in a higher APY with a new CD).

CDs typically offer a higher APY than savings or money market accounts to encourage investors to tie up their funds.

CDs are a great method to earn interest on money you won’t need for some time. A six-month certificate of deposit is one of the shortest terms available, making it ideal for saving money for a short-term objective, such as a vacation or a new mountain bike. Traditionally, longer-term CDs offer the highest APYs, but the best 6-month CD rates now exceed 5% APY. Thus, you can earn one of the highest CD interest rates with a minimum time commitment.

Remember that APYs represent your annual earnings (APY stands for annual percentage yield). CDs with shorter terms, including those with a 6-month duration, will earn less than the APY.

Obviously, the highest CD rate for six months may come with a high minimum deposit or a severe early withdrawal penalty. Therefore, it is essential to search around for a CD that fits your budget and circumstances. To help you get started, we’ve scoured the best banks and the best online banks for the best 6-month CD rates available today.

Best CD Rates of August 2023: Top CD-Issuers, Methodology, other details

Best 6-month CD rates for September 2023

Merrick Bank: 5.50% Annual Percentage Yield

Minimum down payment: $25,000

Yes, the minimum deposit is quite substantial. However, if you are able to save $25,000 for six months, you could earn $678.30 in interest.

Pros

• You have the option to receive periodic interest payments.

Cons

• For some depositors, the minimum deposit is prohibitively high.

• The early withdrawal penalty is equal to ninety days’ interest.

Popular Direct: 5.35 percent yield to maturity

Minimum down payment: $10,000

Popular Direct also has a high minimum deposit requirement, albeit not quite as severe as the one at Merrick Bank. This CD would yield $264.01 in interest on a $10,000 deposit in six months.

Pros

• Daily interest is compounded.

• Telephone customer service is available 24/7.

Cons

• The minimum deposit requirement is greater than those of most online banks.

• The penalty for an early withdrawal is 120 days of interest.

First Internet Bank of Indian: 5.2% APY

Minimum down payment: $1,000

The rate on the 6-month term is notably excellent right now, but if you’re looking for something else, it’s not hard to browse alternatives on FIBC’s simple, direct website.

Pros

• Transparent product information is readily available on the website.

• Account opening is fast and simple.

Cons

• The minimum deposit requirement is greater than that of some online institutions.

• The early withdrawal penalty is the highest we’ve seen, at 180 days of interest.

BMO Alto: 5.20% APY

Minimum investment: $0

The BMO Alto 6-month CD is a great method to earn a relatively quick return on even a small amount of money, as there is no minimum deposit requirement.

Pros

• You have the option to receive periodic interest payments.

• Telephone customer service is available 24/7.

Cons

• The early withdrawal penalty is equal to ninety days’ interest.

• As a BMO Alto customer, you cannot use any BMO Harris locations.

CITY Bank’s: APY  5. 00%

Minimum down payment: $1,000

In today’s high-interest-rate climate, the majority of CIT Bank’s other CD terms offer unimpressive interest rates. However, the 6-month CD offers a competitive rate without requiring a substantial time commitment.

Pros

• Daily interest is compounded.

• It is simple to establish and finance an account.

Cons

• Since the majority of CD terms have rates of 0.50% or less, you would not want to construct a CD cascade.

• The penalty for an early withdrawal is three months of interest.

Synchrony Bank: APY at 4.90%

Minimum investment: $0

Synchrony Bank is best known as an issuer of branded credit cards, but it is currently also offering outstanding CD rates. Even though there are slightly higher rates on this list, the $0 minimum deposit makes this 6-month CD more accessible to depositors.

Pros

• The mobile application is highly rated.

• There are available bump-up, no-penalty, and IRA CDs.

Cons

• The early withdrawal penalty is equal to ninety days’ worth of interest at the current rate.

• You can discover rates that are slightly higher elsewhere.

Alliant Credit Union: 4.75 percent annual percentage yield

Minimum down payment: $1,000

There are sufficient methods to join Alliant Credit Union for anyone to find one that works for them. If you invest the minimum in its six-month certificate (what credit unions refer to as CDs), you will earn $23.47 over the course of the term.

Pros

• Unlike many credit unions, membership is open to anyone.

• There are options for standard, jumbo, and IRA certificates.

Cons

• The minimum deposit requirement is greater than that of some online institutions.

• The early withdrawal penalty is equal to ninety days’ interest.

Bethpage Federal Credit Union at 4.75% APY

Minimum down payment: $50

Bethpage Federal Credit Union is another credit union with low entry requirements: a $5 deposit is required to establish a savings account. Thereafter, you can establish a six-month CD with as little as $50.

Pros

• Unlike many credit unions, membership is open to anyone.

• The minimum deposit requirement is lower than that of many online banks.

• Standard, bump-up, and IRA CDs are available.

Cons

• The early withdrawal penalty is equal to ninety days’ interest.

• Higher rates are available elsewhere.

How does a 6-month CD rates work?

A 6-month CD functions similarly to other CDs. When the CD matures, the account can be closed and the funds withdrawn. Or, you can renew it at the then-current interest rate (you typically have between seven and ten days to decide).

Your bank or credit union will automatically renew the CD after the grace period for a similar term with an APY that could be higher or lower than the original CD, unless you notify it otherwise.

Some institutions permit monthly interest withdrawals. This can be a good option if you need the income, but bear in mind that it reduces the annual percentage yield (APY) because you will not earn interest on the interest (also known as compound interest). Otherwise, you will receive your deposit and interest when you close the CD.