Best Jumbo CD Rates

Millennial Money has partnered with CardRatings and creditcards.com for our coverage of credit card products. Millennial Money, CardRatings and creditcards.com may receive a commission from card issuers. This site does not include all financial companies or financial offers.

At this point, you have managed to rack up a considerable chunk of change— at least five figures — and now you’re looking to put your money aside and let it grow for a short period of time.

This post will explore whether a jumbo certificate of deposit (CD) is the right option for your needs.

You’ll also learn which financial institutions are offering the best CD rates right now.

The Best Jumbo CD Rates

Here are our favorite jumbo CD options to explore today:

Keep in mind that not all jumbo certificates of deposit accounts will advertise themselves as “jumbo”.

As always, you have to dig a little deeper for information when searching for the best financial products for your specific needs.

It’s also important to remember that APYs are always changing — especially during uncertain financial times, such as the current COVID-19 pandemic. This article represents the latest updates from across the industry.

What’s more, jumbo CDs will not always guarantee a higher return than a traditional CD, even though they may seem to have better rates at first.

Read the fine print to ensure that the jumbo CD APYs being offered are a better deal than you could get with regular CDs.

CommunityWide Federal Credit Union 6-Month CD

CommunityWide offers a low minimum deposit of just $1,000 for terms ranging from six months to 60 months.

Dividends can compound in certificates, be deposited to another share, or be transferred to another institution.

CIT Bank Jumbo CDs

CIT Bank, member FDIC, is an online bank that is growing in popularity. The company offers 2-year CDs, 3-year CDs, 4-year CDs, and 5-year CDs.

The APY on the 2-year and 3-year accounts is 0.40%, and it’s 0.50% for the 4-year and 5-year terms.

These aren’t the highest APYs on the market, but they aren’t the lowest rates either. And with no account opening fees or maintenance fees, this makes them a pretty solid choice.

If you’re already a CIT Bank account holder, this might be a good option.

Continue Reading:

Capital One 360 Jumbo 12-Month CD

Capital One 360 has many enticing features, including no minimum balance and flexible interest payments that allow the customer to determine when they are distributed.

Their 12-month CD (also known as a 1-year-CD), with an APY of 0.30%, is not the most competitive on the market.

But it’s still a relatively strong return.

Continue Reading:

Discover Bank 12-Month High-Yield CD

Discover is largely known for its credit cards. However, the Discover Bank CD program boasts a comparatively high APY of 0.60%, a lower minimum deposit, and a 12-month maturity date.

Discover’s 12-month plan is a pretty good value, too, when considering that its longer 30-month term has an APY of just 0.70%.

I recommend keeping your money locked up in a 12-month term unless you are looking for guaranteed stability throughout a longer period.

Continue Reading:

Michigan State University Federal Credit Union 3-Month CD

Michigan State University Federal Credit Union offers a variety of CDs in three, six, and 13-23 month terms.

There is also the option for a one-year add-on certificate.

One of the great parts about Michigan State’s program is there are no monthly or maintenance fees to worry about.

Blue Federal Credit Union 6-Month CD

Blue Federal Credit Union offers various options for 6-month CD terms, depending on how much money you are looking to invest.

An APY of 0.30% is available for a minimum balance of $1,000 to $49,000.

A minimum balance of $50,000 to $99,999.99 will yield an APY of 0.40%.

Anything over $99,999.99 will yield a healthy APY of 0.50%.

This is still less than what you will find in a typical HYSA, but it comes with the security of a fixed rate — a nice-to-have in today’s volatile environment.

Chevron Federal Credit Union 12-Month Jumbo CD

Chevron offers share certificates, with a guaranteed return that varies depending on how much you are willing to put in.

A 12-month, $500 minimum investment will yield an APY of 0.85% which is great for beginners.

However, if you have at least $100,000 on hand, then you’ll want to spring for the 12-month jumbo CD, which comes with a strong APY of 1.01%, with a dividend rate of 1.00%.

SchoolsFirst Federal Credit Union 6-Month Jumbo CD

Like Chevron, SchoolsFirst also offers share certificates but with a slightly reduced dividend rate and APY of 0.85% each for 6 to 11 months for a $100,000 deposit.

It should be noted that both spike significantly when jumping to the next tier of 12 to 17 months, with a rate of 1.14% and APY of 1.15%.

And if you’re willing to keep at least $100,000 locked in for 60 months, you can receive a dividend of 1.39% and an APY of 1.40%.

So, it’s a flexible program with higher payouts, the more you’re willing to set aside.

Wings Financial Credit Union 36-Month CD

Wings Financial Credit Union is now offering a generous APY of 1.16% for a term period of three years.

It’s a long time to keep such a large sum of money locked up in a CD.

But if you’re willing to park your capital for this long, this is one of the best cd rates that you’ll find on the market right now.

SuperiorChoice Credit Union 60-Month CD

One of the nice parts about SuperiorChoice is that the company offers monthly dividends.

Plus, when a certificate comes due, the company will provide a notice and offer 10 business days to cash or change the terms of the certificate.

Automatic renewal occurs after the 10-day period. So it’s a flexible and convenient program.

With this particular fund, the 1.40% APY is excellent, especially given the current market conditions.

However, the high minimum deposit and 60-month term (5-year-jumbo-CD) is a big commitment.

If you’re looking for a safe long-term investment, this could be a good fit for you.

Benefits of a Jumbo CD

Now that you have a better idea of what a jumbo CD is, let’s take a look at some of the advantages you’ll enjoy by signing up for one.

Higher Interest Rates

Jumbo CDs usually have competitive rates that are slightly higher than traditional CDs.

Interest rates typically increase depending on how much you are willing to spend and how long you are willing to keep your money in the account.

One thing’s for sure: you’re much more likely to get a higher rate of return from a CD account than with a checking account, or money market account.

Shorter Tenures

Another benefit of using a jumbo CD is they can have short term lengths, with some terms running only a few days compared to several months.

Some jumbo CDs can also come with longer terms extending as much as 10 years.

Reduced Risk

Investors often use jumbo CDs as a way to diversify their portfolios, because investments are not subject to losses like they would be in the stock market. CD deposits are also come with FDIC insurance, while stocks are not.

Now that you have a basic overview of how jumbo CDs work and the pros of using one, let’s take a closer look at some of the top-performing products on the market.

FAQs

What is a Jumbo CD?

Just like any other Certificate of Deposit (CD), a jumbo CD is a short-term savings account with a specific, fixed term and a fixed interest rate, which is also known as an annual percentage yield (APY).

When you invest in a CD, you need to be comfortable signing up with the notion that you’re essentially putting your money on hold for a specific time period in exchange for a stronger guaranteed return at the end of the savings period.

CDs are not like checking accounts where you can access your money whenever you need it. In fact, most CDs have an early withdrawal penalty.

A jumbo CD is an investment that typically involves a higher minimum balance than you would find in a traditional CD.

However, this can vary from bank to bank. Some minimum deposit requirements can be as low as $500 while others can be as high as $100,000.

Some companies, like Capital One, do not have any minimum deposit amounts at all.

Are Jumbo CDs Secure?

Jumbo CDs are considered to be risk-free investments, as they are FDIC-insured. They’re also covered by the National Credit Union Administration (NCUA).

While it’s not possible to lose money in a jumbo CD, it is possible to receive a lower payout than you would receive from a competitive traditional CD.

It’s important to scour the market and make sure that you’re putting your money in the right location.

Are Jumbo CDs a Good Investment?

It largely depends on your financial goals and overall investment strategy. High-value stock traders can use jumbo CD returns to offset potential losses during stock trading.

Jumbo CDs are also a good investment for savers looking to park their money for a short period of time before putting it somewhere else.

Ultimately, jumbo CDs will yield strong APYs while delivering security — making them an ideal investment vehicle for those who want to avoid risk.

That said, many people will not qualify for jumbo CD accounts due to the high minimum opening deposits and minimum balance requirements.

Jumbo CD Alternatives

It’s important to know your options before putting your money into a jumbo CD or any CD for that matter.

Always remember: Putting any amount of money into a CD of any kind is like putting your money in jail.

As with your IRA investments, you could be looking at an early withdrawal penalty if you need immediate access to your cash.

With that in mind, here are some jumbo CD alternatives to consider.

High-Yield Savings Account (HYSA)

An HYSA is an online savings account that pays roughly 20 to 25x more than the national average of a standard savings account.

For example, the online bank Ally offers a much higher APY on savings accounts than Bank of America does.

The main difference between an HYSA and a CD is that an HYSA comes without a binding term agreement.

The tradeoff is that HYSA rates are variable and depend on how the economy is functioning and what the Federal Reserve does with interest rates.

HYSA rates were halved in the last year due to the pandemic, as the Federal Reserve has slashed interest rates.

The main thing to remember is that you don’t want to have your money locked up when HYSA rates shoot back up.

Dividend-Paying Stocks

A dividend is a distribution of profits to shareholders. They are usually paid quarterly or semi-annually. Dividends can also be paid monthly or without a set schedule (i.e., irregular dividends).

If you choose the right performing stocks, and you’re willing to handle market volatility, then you can stand to earn more over the course of a year than you would with a binding jumbo CD.

Again, it all depends on your risk tolerance and your needs. Only you or your financial advisor can make that decision.

Bond Funds

A bond fund is a fund that invests in debt securities and government or corporate bonds. They usually pay regular dividends and can be either short or long term.

Bonds funds are considered a safe alternative to CDs. However, they can fluctuate in value.

And because short-term bonds are mutual funds, you will have to pay a capital gains tax if you convert them to cash.

Is a Jumbo CD Best For You?

These are uncertain economic times. As such, you may be hesitant to put your money into the volatile stock market or to keep all of it in a variable HYSA account.

If you’re looking for security and you want to lock in a great APY, consider investing in a jumbo CD.

Just make sure to shop around and compare CDs to make sure you’re getting the best bang for your buck.

Research your options, take your time, and you’ll make the best decision for you. Good luck!

Summary of The Best Jumbo CD Rates

APY Min. Deposit Term
CommunityWide FCU 1.00% $1,000 6 months
CIT Bank 0.40 – 0.50% $100,000 2 – 5 years
Capital One 360 0.50% $0 12 months
Discover Bank 0.80% $25,000 12 months
Michigan State University Federal Credit Union 0.50% $100,000 3 months
Blue Federal Credit Union 0.55 – 0.75% $1,000 – $100,000 6 months
Chevron Federal Credit Union 0.95 – 1.00% $500 – $100,000 12 months
SchoolsFirst Federal Credit Union 0.85% $100,000 6 – 11 months
Wings Financial Credit Union 1.16% $100,000 36 months
SuperiorChoice Credit Union 1.40% $100,000 60 months
Additional Disclosures: Millennial Money has partnered with CardRatings and creditcards.com for our coverage of credit card products. Millennial Money, CardRatings and creditcards.com may receive a commission from card issuers. This site does not include all financial companies or financial offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

Leave a Reply

Your email address will not be published. Required fields are marked *

In This Article