The Best CD Rates in Connecticut for 2025

Connecticut residents have access to a wide range of banking institutions, each offering different certificate of deposit (CD) rates. To streamline the selection process, we've analyzed these offerings to highlight the top CD rates currently available in Connecticut.

The Best CD Rates in Connecticut

Thomaston Savings Bank

Thomaston Savings Bank has a wide range of CDs to choose from–covering maturity terms of 91 days to 5 years. The CD rates are extremely competitive and they are even more attractive than many CDs from online banks. The minimum opening deposit for Thomaston Savings Bank CDs is $1,000.

Union Savings Bank

Union Savings Bank runs promotions on a small list of CDs with odd terms. Their special promotional CD rates are very competitive and worth considering for any saver. The minimum opening deposit for Union Savings Bank promotions CDs is $1,000.

Santander Bank

Santander Bank will occasionally provide promotional CD rates on shorter maturity terms. However, these CDs must be opened at a local Santander branch. The minimum opening deposit for Santander Bank CDs is $500.

Lock In The Highest CD Rates Before Interest Rates Crash Again

The Federal Reserve plans to continue dropping interest rates. To ensure that you continue to generate reliable returns for years to come, consider a CD now to lock in the highest available rates:

Methodology

To choose the best CD rates in Connecticut, the MyBankTracker team surveyed the certificate of deposit accounts offered by the top 50 retail banks by deposit market share in Connecticut (based on FDIC June 2024 data) with more than 10 locations in the state--includes coverage and availability in major cities including Bridgeport, Stamford, New Haven, Hartford, and Waterbury.

The top recommendations are the results of analyzing the CDs based on the following criteria:

• Annual percentage yield (APY) for each CD’s corresponding maturity term
• The number of CD maturity terms available from the bank with which their corresponding APYs are competitive
• Minimum opening deposit requirements

How Do CDs Work?

Certificates of Deposit (CDs) are savings accounts offered by banks and credit unions that provide a fixed interest rate for a specified term. Unlike traditional savings accounts, CDs require you to deposit a fixed amount of money for a predetermined period, typically ranging from a few months to several years.

The key features of CDs include:

• Fixed interest rate for the entire term
• Guaranteed returns, as long as you keep the money deposited for the full term
• Higher interest rates compared to regular savings accounts
• FDIC insurance up to $250,000 per depositor, per bank

When you open a CD, you agree to leave your funds untouched for the specified term. In exchange for this commitment, the bank offers a higher interest rate than you would receive with a standard savings account. At the end of the term, known as the maturity date, you can withdraw your initial deposit plus the earned interest without penalty.

How to Pick a Certificate of Deposit

Interest rate

The interest rate is a crucial factor when choosing a CD. Higher rates mean more earnings on your deposit. When comparing CDs, look for:

• Competitive rates offered by various banks and credit unions
• Special promotional rates for new customers
• Rate differences between online and traditional banks

Remember that longer-term CDs typically offer higher interest rates than shorter-term options.

Maturity term

The maturity term is the length of time you agree to keep your money in the CD. Terms can range from a few months to several years. Consider the following when selecting a term:

• Short-term CDs (3-12 months): Offer more liquidity but generally lower interest rates
• Medium-term CDs (1-3 years): Provide a balance between liquidity and higher rates
• Long-term CDs (3-5 years or more): Offer the highest rates but require a longer commitment

Choose a term that aligns with your financial goals and when you might need access to the funds.

Minimum opening deposit

Banks and credit unions often require a minimum deposit to open a CD. This amount can vary significantly between institutions. Consider:

• Your available funds for investment
• Higher minimum deposits may offer better interest rates
• Some online banks offer CDs with low or no minimum deposit requirements

Early withdrawal penalty

Most CDs charge a penalty if you withdraw funds before the maturity date. These penalties can vary and may include:

• A fixed fee
• A percentage of the interest earned
• A combination of both

Before opening a CD, carefully review the early withdrawal terms and consider whether you might need access to the funds before maturity.

Flexibility options

Some CDs offer additional features that provide more flexibility:

• Bump-up CDs: Allow you to increase your interest rate once during the term if rates rise
• Add-on CDs: Permit additional deposits during the term
• No-penalty CDs: Allow early withdrawals without fees, but typically offer lower interest rates

Consider these options if you want more flexibility with your CD investment.

Compared to Online CDs Available Nationwide

Online banks often offer higher CD rates compared to traditional brick-and-mortar banks. When researching CDs, consider online options because:

• They typically have lower overhead costs, allowing them to offer more competitive rates
• Many online banks have lower minimum deposit requirements, sometimes as low as $1
• Opening and managing a CD online is often convenient and user-friendly

However, be sure to compare rates, terms, and features across both online and traditional banks to find the best CD for your needs.

FDIC Insurance

FDIC insurance is crucial for protecting your CD investment. Key points to remember:

• Most banks, including online banks, are FDIC-insured
• FDIC insurance covers up to $250,000 per depositor, per bank, for each account ownership category
• This insurance protects your principal and any accrued interest in case of bank failure

Always verify that the bank offering the CD is FDIC-insured before making a deposit.

FAQs

What happens when a CD reaches maturity? Does it renew?

When a CD matures, you typically have a grace period (usually 7-10 days) to decide what to do with the funds. Options include:

• Withdrawing the principal and interest without penalty
• Reinvesting in a new CD with the same or different terms
• Allowing the CD to automatically renew for the same term at the current interest rate

If you don't take action during the grace period, many banks will automatically renew the CD for the same term at the current interest rate.

What is a CD ladder?

A CD ladder is a strategy that involves investing in multiple CDs with staggered maturity dates. This approach offers several benefits:

• Regular access to a portion of your funds as CDs mature
• Ability to take advantage of potentially higher interest rates as each CD matures
• Balancing of short-term liquidity needs with long-term higher interest rates

To create a CD ladder, you might invest equal amounts in 1-year, 2-year, 3-year, 4-year, and 5-year CDs. As each CD matures, you can reinvest in a new 5-year CD or choose a different option based on your current needs and market conditions.

How is interest accrued in a CD?

Interest on CDs typically accrues daily, weekly, or monthly, depending on the bank's policy. The interest can be handled in two ways:

• Simple interest: Calculated based on the principal amount only
• Compound interest: Calculated on the principal and previously accrued interest

Compound interest allows your money to grow faster over time. Most CDs offer compound interest, but it's essential to confirm this with your bank.

How are interest earnings in CDs taxed?

Interest earned on CDs is generally taxable as income in the year it is paid or available for withdrawal. Key points to remember:

• You'll receive a 1099-INT form from your bank reporting the interest earned
• Interest is taxed at your ordinary income tax rate
• If you don't withdraw the interest, you may still owe taxes on it in the year it was earned
• Some retirement accounts, like Roth IRAs, may offer tax advantages for CD investments

Consult with a tax professional for specific advice on how CD interest may impact your tax situation.