The Federal Reserve following the announcements of its Open Committee has begun raising its key interest rates incrementally. The first increase in the federal funds rate came in December 2015. The major banks, smaller banks, regional banks and thrift institutions reacted in varying degrees by raising yields on their financial instruments. CD rates increased after the first Federal Reserve increase.

Ranking CDs

One can describe the top CD rates by reference to the annual percentage yield. On the basis of APY, one can rank the yield figure and gauge the range of returns. Offered rates can change and issuers frequently raise or lower the yield in response to market factors. When the consumer response is considerably strong, issuers are likely to adjust yields slightly downward.

Best CD Rates

The below listed items describe a sampling of the best ten CD rates in the period on or about March 3, 2016.

1. MidFirst Direct offers a ten-year CD at 2.50 percent annual yield, down from 2.75 percent.
2. Melrose Federal Credit Union’s five-year CD pays 2.42 percent
3. Discover Bank’s seven-year CD pays 2.30 percent.
4. Apple Federal Credit Union offers a seven-year CD paying 2.25 percent. The minimum deposit is $500.00.
5. Synchrony Bank offers a five-year CD that pays 2.20 percent.
6. Quaint Oak Bank’s five-year CD pays 2.20 percent.
7. CIT Bank’s five-year CD pays 2.20 percent. The instrument requires a minimum deposit of $1,000 with daily compounding of interest.
8. Colorado Federal Savings Bank‘s five-year CD pays 2.15 percent
9. Sallie Mae’s five-year CD pays 2.10 percent.
10. Riverland Credit Union’s five-year CD pays 2.10 percent.

Analysis of CD Rates

Many experts believe that the large banks have comfortable asset positions and do not need to do any extensive outreach for new depositors. It is different for small banks and thrift institutions; they must prepare assets for local competition and for member-based consumer pools. Most of the best rates come from thrift institutions and small banks. Notable exceptions here are Discover Bank, CIT Bank, and Sallie Mae.

Terms and Duration

When considering the advantages of CDs, one must look past the rates and consider penalties for early withdrawal, and other promotional or premium benefits. The rate and duration of a CD must be taken together when assessing the strength of the investment opportunity.


Some economic data and expert observations suggest that the US economy may heat-up and that banks may resume expanding their asset base through many means including CDs. This data includes foreign investment in North American real estate, accelerated jobs growth in the US, and a gradual improvement in the oil segment of the energy sector. Should these or similar impacts occur, CDs may once again offer depositors hopeful signs of increased yields and shorter terms.