Updated July 1, 2024
Marcos Cabello
Written by
Marc Wojno
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It's one of the best times to open a certificate of deposit (CD), since annual percentage yields (APYs) on that deposit product are tending to outpace inflation. Moreover, interest rates on CDs are higher than they've been in decades, but they won't stay there forever. Experts predict CD rates to stay high over the next year, but they are expected to fall off after the Federal Reserve cuts the federal funds rate. If you're a Pennsylvania resident looking to open a CD, here's what you need to know.
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The following accounts can be found at most banks and credit unions. They’re federally insured for up to $250,000 and offer a safe place to put your money while earning interest.
Certificate of Deposit (CD)
CDs are best for individuals looking for a guaranteed rate of return that’s typically higher than a savings account. In exchange for a higher rate, funds are tied up for a set period of time and early withdrawal penalties may apply.
Checking account
Checking accounts are best for individuals who want to keep their money safe while still having easy, day-to-day access to their funds. ATM and other transactional fees may apply.
Savings / Money Market Accounts (MMA)
Savings and MMAs are good options for individuals looking to save for shorter-term goals. They’re a safe way to separate your savings from everyday cash, but may require larger minimum balances and have transfer limitations.
Current 1 year CD trends
Bankrate Partner average
4.79% APY
National average
1.79% APY
The "Bankrate Partner average" is calculated from the average of the top savings account offers from the institutions we track, included on this page as of 7/15/2024. "National average" is determined by Bankrate's comprehensive national survey of savings accounts and CDs.
How to find the best CD rates in Pennsylvania
There are three main components you should consider when choosing a CD: the term length, the yield and the penalty for early withdrawal.
Choosing the CD term
A CD term is the length of time your money is slated to stay within the account. Terms typically range anywhere from seven days to 10 years, though some banks offer terms even longer than a decade. To find the right term for you, consider how long you can park your cash in the account without needing to withdraw it. Unless you're opening a no-penalty CD, you'll likely need to pay a penalty for withdrawing your money before the CD's maturity date.
You'll also want to consider the minimum opening deposit when choosing your term. While some banks don't have a minimum deposit requirement, others may ask for a relatively standard $500 or $1,000 minimum deposit. If you're interested in a jumbo CD, you'll likely need around $100,000 to open an account.
Choosing the yield
Getting the best yield is probably the most important factor for most consumers when choosing a CD. Thanks to historic interest rate hikes by the U.S. Federal Reserve, yields on CD rates have soared over the last three years. Top-notch rates for CDs surpass 5 percent APY in today's market, but not all institutions are offering yields that high. In general, big institutions such as Bank of America and Chase Bank are still offering lackluster rates compared with online-only banks like Ally Bank and Marcus by Goldman Sachs.
But choosing a CD based solely on the highest yield may not always be the right move. If you suspect you may need to withdraw your money before a CD matures, you'll likely need to pay an early withdrawal penalty, which could even eat at some of your principal (the money you originally invest in a CD).
Mind the early withdrawal penalties
Banks typically impose an early withdrawal penalty if you withdraw some or all of the principal before a CD matures. Early withdrawal penalties range widely from bank to bank. A relatively standard early withdrawal penalty for a 12-month CD could range anywhere from three to six months of interest. And some banks may even impose a flat fee on top of that penalty, further ratcheting up the cost of withdrawing from a CD before maturity.
Here, you'll want to consider your risk tolerance, balancing the term and the yield with the associated penalty. If you're more likely than not to withdraw early, you may want to consider a CD with a lower yield but a softer penalty.
Short-term vs. long-term CDs
Whether to invest in a short-term or long-term CD is dependent on your financial situation.
Pennsylvania residents who don't need to touch their money for a couple of years may find that long-term CDs are their best bet, as it locks in a high yield even if banks slash rates down the road. Long-term CDs in today's market have the potential to outpace inflation. As such, if you have enough cash, now might be a good time to invest in a CD ladder.
Pennsylvanians who don't want to tie up their money for too long will still find high, perhaps even more favorable, yields for short-term CDs. Moreover, these CDs shave off some of the risk associated with early withdrawal penalties, since your money is locked down for a shorter amount of time.
How to compare CD rates in Pennsylvania
Pennsylvania residents should consider CDs available only in their region (and those with the banks they already have accounts in), but also those available to anyone in the U.S., as is the case with most online-only banks.
The most popular banks in Pennsylvania by number of branches include PNC Bank, Citizens Bank and Wells Fargo Bank. Each of these offer CDs, but most of them don't offer competitive yields. If you already bank at one of these institutions, it could make sense to keep your finances under one roof. But if you're looking for the highest yields right now, you'll find much better options elsewhere.
Online-only banks typically have the edge when it comes to APYs. And if you open an account at one of these banks, you may also consider opening other deposit accounts at the same bank, as it makes it easy to transfer funds (such as credited interest that can be withdrawn without penalty) between accounts.
Research methodology
Since 1976, Bankrate has been a leading publisher of rates and personal finance articles. It is also often cited by some of the most respected and well-known publications and websites. The Bankrate promise is that we strive to help our readers make smarter financial decisions, adhering to strict principles of editorial integrity and transparency.
Bankrate’s editorial team is made up of seven banking experts. These experts have researched many banks and at least twice a month go to bank websites to make sure readers stay up to date on the latest rates and bank products.
We select banks that have high annual percentage yields (APYs) and that are popular and broadly available, and we include some of the largest banks.
Note: Bankrate doesn’t include callable CDs or brokered CDs on this page and compares regular CDs and no-penalty CDs separately.
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