The post 2008 financial crisis period would have been a perfect time to lock in a five year CD rate.īecause it is very difficult to predict the start of a recession or the beginning of a recovery, some individuals prefer to create aĬD ladder and five year CDs are an importantįive year CDs from online banks pay rates that are well above one year CDs and are comparable to five year CDs from branch banks. The time to invest in five year CDs is when the economy is doing well and interest rates are high or if the economy seems to be entering a period of slower growth, or a In general, avoid investing in long-term CD at the start of economic recoveries following a recession.

Not change with increases in interest rates, but no one wants to deposit money into a CD at 2.00% for five year only to have rates rise to 4.00% a year later. Unlike with bonds, the face value of a CD does This can often happen in a rising rateĮnvironment and savers are advised to be way of investing in a five year CD if interest rates and inflation seem poised to go up. The biggest risk of a five year FDIC insured CD is that soon after depositing the money, interest rates and inflation will begin to rise. The FDIC provides a tool to help you determine if your deposits are covered. Deposits over that amount may be lost should there beĪ bank failure and savers are advised to keep their money within FDIC limits. Safetyįive year CDs shown from banks on BestCashCow are all insured up to $250,000 per individual per institution by the FDIC. These cases are rare though and savers are advised to plan to keep their money in the CD for the full term. They break the CD in the third or fourth year. At times, some five year CDs offer rates that are high enough to make up for the break penalty, and in these cases savers can earn a positive return even if While individuals can withdraw the money (termed 'breaking the CD') high penalties usually make

Savers must keep the money locked in the bank for an extended period of time. Five year CDs provide the highest yield of the common CD terms but in return, Online banks offer many different CD terms of which the five year CD is generally the longest.

Best 5 year cd interest rates