Updated: Jul 19, 2024, 1:59pm
The best 18-month CDs offer a balance between a shorter commitment period and a higher annual percentage yield (APY). However, choosing the right CD requires researching the best interest rates and comparing early withdrawal penalties. This guide explores the best 18-month CD rates available to help you make an informed decision about where to put your money.
Best 18-Month CD Rates
We analyzed 142 CD accounts at 84 nationally available banks and credit unions to pinpoint the best CDs with 18-month terms. Read on to learn why we picked each account and access individual bank reviews.
While this list does not include the best 18-month jumbo CD rates or 18-month IRA CD rates, several regional banks and credit unions offer attractive 18-month jumbo CDs, and you can find 18-month IRA CDs with competitive rates from Synchrony Bank, Ally Bank and others.
Annual percentage yields (APYs) and account details are accurate as of June 25, 2024.
Summary: Best 18-Month CD Rates
Methodology
When curating our list of the best 18-month CDs, we examined 142 CD accounts across 84 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. To calculate the star ratings, we ranked each institution on 11 data points within the categories of APY, minimums, compounding frequency, customer experience, digital experience, available CD terms and overall availability.
The following weights were assigned to each category:
- APY: 50%
- Customer and digital experience: 20%
- Minimum deposit requirement: 12.5%
- Compounding frequency: 7.5%
- Availability: 5%
- Available CD terms: 5%
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.
Highest 18-Month CD Rates
Interest rates for new CDs often change along with fluctuations in the economy and the federal funds rate. The highest 18-month CD rates currently sit at 4.00% to 5.00% APY. Not all banks offer 18-month CDs, though. This is a less common option than whole-year CDs, but when these are available, they typically have rates comparable to or better than one-year CDs.
What Is an 18-Month CD?
An 18-month certificate of deposit is a type of savings account that requires you to deposit funds for a period or term of 18 months. In most cases, you can’t withdraw the money until 18 months have passed without being penalized. For a standard CD, you earn a guaranteed interest rate over the course of the term. This means you can calculate ahead of time how much you’ll earn with compound interest.
How Does an 18-Month CD Work?
You open an 18-month CD at a bank or credit union just like you would a regular checking or savings account. Most accounts can be opened online but some may require you to visit a branch in person or make a phone call.
Once you complete your application, you’ll make a deposit. You will need to deposit at least the minimum required. Then, you can’t touch the money inside the account for 18 months. If you withdraw funds early, you will be subject to penalty fees and give up some of your interest.
The CD earns interest during that time, usually at a fixed rate determined when you open the account. Once the 18 months are over, you can choose to renew the CD or withdraw your deposit along with the interest it has earned.
What Is a Good CD Rate?
A good CD rate is one that offers a competitive APY to help you meet your financial goals. As of August 2024, the national average rate for a one-year CD is 1.85%, while the average for a two-year CD is 1.58%. The average 18-month CD likely falls somewhere in the middle—the Federal Deposit Insurance Corporation (FDIC) doesn’t publish average rates for that term length. However, many online banks offer CD rates well above these averages—currently as high as 5.00% APY or higher.
How To Choose an 18-Month CD
If you’ve never researched 18-month CD accounts before, here are some tips to help you choose the best one.
- Compare CD rates. First, research the current 18-month CD rates offered by various banks and credit unions. (Our list is a good place to start.) A higher APY means a higher return on your investment, so look for banks or credit unions that offer the highest APY.
- Consider minimum deposit requirements. Some banks require a minimum deposit to open a CD account. Consider your budget, and choose a CD that has a minimum deposit requirement you can meet.
- Look at early withdrawal penalties. It’s important to understand the early withdrawal penalties for withdrawing from your CD before its maturity date. Generally, these penalties mean sacrificing some or all of the interest your CD has earned.
- Research the bank’s financial stability. When investing your money, it’s essential to choose a financially stable bank or credit union that is federally insured through the FDIC or NCUA.
- Read the fine print. Before opening a CD, make sure you read the terms and conditions carefully. Look for any hidden fees, renewal options or other clauses that could affect your investment.
How To Open an 18-Month CD
You can generally open an 18-month CD online in just a few steps:
- Choose a bank or credit union with the best 18-month CD rates.
- Go to the bank’s website and select the CD option you want to open.
- Provide your personal and financial information, as required by the bank.
- Agree to the CD’s terms and conditions.
- Enter the amount of money you want to deposit into the CD account.
- Verify your details, and submit the application.
- Wait for confirmation from the bank that your CD account has been successfully opened.
Pros and Cons of 18-Month CDs
Pros
- Generally higher APY than savings account
- Less risk than stock market investments
- Shorter term commitment
- Guaranteed returns
Cons
- May offer lower return than long-term CDs
- Limited access to funds
- Potential penalties for early withdrawals
- 18-month CDs not as popular as other terms
Are 18-Month CDs Worth It?
An 18-month CD can be worth it if you can commit to leaving the money untouched for the duration of the term. However, always consider your future financial needs. If you don’t anticipate needing the money before the 18-month period ends and the interest rate is competitive, an 18-month CD can be a worthwhile way to earn some extra money.
But if there’s a chance you might need the money before the term expires, early withdrawal penalties could eat into earnings and negate the benefits. In this case, you might be better off storing your money in a high-yield savings account where you can access it at any time.
Bottom Line
An 18-month CD or share certificate can be a great way to grow your savings without having to lock your money up for a long time. But before you open an account, compare the best 18-month CD rates, minimum deposit requirements and early withdrawal penalties to make sure you’re choosing the right account for your needs.
Find The Best CD Rates Of 2024
Banks We Monitor
These financial institutions were included in our research for the best CD rates: ableBanking, Affinity Federal Credit Union, Ally Bank, American Express, Axos Bank, Apple Federal Credit Union, Bank of America, Bank5 Connect, BankDirect, BankPurely, BankUnitedDirect, Barclays, Bethpage Federal Credit Union, BrioDirect Banking, Capital One, Charles Schwab Bank, Chase, Chevron Federal Credit Union, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comenity Direct, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Credit Union of Denver, Discover, Dollar Savings Direct, EmigrantDirect, Financial Partners Credit Union, Financial Resources Federal Credit Union, First National Bank of America, Georgia’s Own Credit Union, Golden1 Credit Union, Greenwood Credit Union, HSBC Direct, Hughes Federal Credit Union, Ideal Credit Union, iGoBanking, Investors eAccess, Keybank, Kinecta Federal Credit Union, Limelight, Live Oak Bank, MAC Federal Credit Union, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My eBanc, MySavingsDirect, Navy Federal Credit Union, nbkc Bank, Northern Bank Direct, Northpointe Bank, Nuvision Federal Credit Union, Pacific National Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Quontic, Quorum Federal Credit Union, Radius Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Spectrum Federal Credit Union, State Bank of Texas, State Department Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, EverBank, TotalDirect Bank, U.S. Bank, USAA, USAlliance Federal Credit Union, Vio Bank, Virtual Bank, Wells Fargo and Truist.
Frequently Asked Questions (FAQs)
What are the alternatives to 18-month CD rates?
Banks typically offer CD terms ranging from three months to five years, with some offering terms ranging from one week to 10 years, so there are plenty of alternatives to 18-month CD rates if these don’t align with your financial goals. You can also consider a high-yield savings account if you need regular access to your money.
What is the best CD rate for 18 months?
The best 18-month CD rates are currently at or over 5.00% APY. Right now, Synchrony Bank, Marcus and Ally Bank have some of the best CD rates for 18 months.
What are 18-month CDs paying?
The best 18-month CDs are paying between 4.00% and 5.00% APY or even higher. This means you may earn between $60 and $76 total for every $1,000 you invest in an 18-month CD. Use the Forbes Advisor CD calculator to figure out how much you can earn.
How do 18-month CD rates compare to other terms?
While every bank is different, most institutions offer some of the highest CD rates on 18-month terms right now. For example, Ally Bank’s 18-month CD earns 4.25% APY, while most of its other CDs earn less than this, including three- and five-year CD terms.