Business CDs: Compare interest rates and major options

A business CD is a high-yield account that locks in your funds for a specified period of time, from a few weeks to a few years. In return, the fixed-term deposit typically offers a much higher interest rate than traditional business savings or fixed-term deposits. Business Checking Account.

If you know you won't need the money for more than a year, a business CD can let you earn 5% or more annual interest on your idle funds. Would you like the option to withdraw your savings every now and then instead? High Yield Business Savings Account Or a money market account might be a better fit.

A business CD or certificate of deposit is a fixed-interest business savings account that usually has a term between six months and five years.

The money you put in a business CD must remain there until maturity. If you withdraw your money early, you'll incur a penalty of one month to one year's worth of interest, depending on the original term and the financial institution's rules. However, you won't lose your initial deposit.

We researched the highest-yielding corporate CDs from dozens of online, national, and local banks to find the best-yielding corporate CDs. This list includes only accounts with at least a 4% annual interest rate, which is much higher than the national average of 1.80% annual interest for 12-month CDs, according to the most recent data from the Federal Deposit Insurance Corporation.

Interest rates and APYs may vary depending on where you live and the CD's term. We've listed CDs with multiple term lengths below. Find the one that's best for you by considering how the term and CD interest rate align with your business goals.

If you choose, pay more attention to the term Promotional CD FeeWhen a CD's promotional rate period ends, the certificate may automatically renew at a much lower rate. Promotional periods may be unusual, for example, seven months instead of six, so make a note of the end date of the period so you can move your funds into an account that will continue to generate a high yield.

of Live Oak Bank 12 Month Business CD Earn 5.00% APY. Looking for a shorter term? The bank's 6-month CD currently offers 4.80% APR. Live Oak Business Savings Account Earn more 4.00% There is an APY and unlimited trading.

• Early Termination Penalty: 90 Days of Interest.

If you don't want to sacrifice interest rates by shortening the term, Prime Alliance Bank's business CDs offer the same high APY (5.30%) on both six-month and 12-month CDs. Prime Alliance has one branch near Salt Lake City, and opening an account isn't as easy as with other banks; you have to email Prime Alliance, but that small inconvenience may be worth the big yield.

• Early Termination Penalty: Not disclosed.

First Internet Bank is known for offering some of the best interest rates on its business savings accounts, and its business CDs are no exception: You can choose terms from three months to five years, but the bank's 12-month business CD offers the highest interest rate at 5.26% APR.

• Minimum deposit: $1,000.

• Early Termination Penalty: Interest for 180 days.

TAB Bank's business CDs have terms ranging from 12 to 60 months, but you can lock in the highest interest rate (5.15%) on the bank's 12-month CD.

• Minimum deposit: $1,000.

• Early Termination Penalty: 90 Days of Interest.

EverBank (formerly TIAA) offers business CDs with terms ranging from three months to five years, although the highest APY, 4.75%, is offered on a 12-month term. All business CDs require a minimum deposit of $1,500.

• Early Termination Penalty: Interest is accrued for 91 days.

Regions currently offers a 5-month business CD with a promotional rate of 5.00% for those who qualify for relationship pricing (primarily those with a Regions checking account). If you don't qualify, the non-relationship promotional rate remains at 4.75%. Promotional rates above 3.50% are also available on 14-month and 20-month CDs.

• Annual interest rate: 5.00% (related rate), 4.75% (non-related rate).

• Early Termination Penalty: All interest accrued on the amount withdrawn as of the withdrawal date or 2% of the amount withdrawn, whichever is less.

Wells Fargo's current business CD specials offer 4.75% annual interest on four- and seven-month business CDs, with a minimum deposit of $5,000 required to qualify. If you can't meet this threshold, Wells Fargo's standard business CDs require a smaller deposit ($2,500) but are capped at 2.50% annual interest on terms between three and 11 months.

• semester: Four or seven months.

• Minimum deposit: $5,000.

• Early Termination Penalty: 90 Days of Interest.

U.S. Bank offers several business CDs with terms ranging from one month to 60 months. You can get the best interest rates with a business CD special with a seven-month or 11-month term. As of this writing, the bank's seven-month CD special (4.64% APR) offers the best interest rate. This is well above U.S. Bank's standard interest rates (0.05% to 0.40%).

• Early Termination Penalty: There will be a $25 fee and penalty depending on when you withdraw your funds.

Both business CDs and business money market accounts are low-risk, high-return ways to invest your long-term savings, but there are some important differences.

Interest level: Business CDs typically offer higher yields than money market accounts: According to the FDIC, the average annual interest rate for a 12-month CD is 1.80%, while the average annual interest rate for a money market account is 0.68%.

Business CD interest rates are also fixed for the term, whereas money market account interest rates are variable and can change as interest rates rise or fall.

The combination of high interest rates and guaranteed returns makes a business CD a good tool for saving for a specific goal, like an expansion plan that's at least a year away or a major equipment purchase.

Access to your money: Business Money Market Account They usually include check writing and debit card access so you can withdraw money when needed. With a business CD, your funds are tied up until the end of the term, and there are early withdrawal penalties if you withdraw money early.

Withdrawals from money market accounts are traditionally limited to six per month. Regulation DHowever, these restrictions were relaxed during the COVID-19 outbreak, and some banks still do not enforce them. The flexibility of money market funds makes them a better choice than CDs for emergency funds or excess working capital.

The interest rate on a business CD is Business BankingIt depends on the length of the CD's term and where you live. In most cases, 12-month CDs will give you the best yield. This is different from the past, when the longer the term, the higher the interest rate.

According to the most recent data from the FDIC, the national average APY for fixed term deposits is:

Rates current as of May 20, 2024.

This table shows APYs for 12-month business CDs at several business banks. This term length typically offers the lowest rates, but some banks offer higher APYs on other terms, such as promotional CD rates. Note: Rates may vary by location.