The Best CD Rates in Minnesota for 2025

Minnesota is home to a variety of banks, both large and small. With so many choices, it can be challenging for residents to navigate the options and find the best certificates of deposit (CDs). To help, we’ve carefully reviewed the available offerings to recommend the highest CD rates for savers in Minnesota.

The Best CD Rates in Minnesota

BMO Bank

BMO Bank shines due to their CD rate specials, which are highly competitive–though these tend to have uncommon maturity terms. These CDs have maturity terms that fall in odd timeframes, such as 13 months to 59 months. Regardless, there is likely a promotional CD that falls into your savings window. The minimum deposit requirement for BMO Bank CDs is $1,000.

Bell Bank

Bell Bank is a great local bank in Minnesota with top-notch CD rates on its entire range of maturity terms from 3 months to 5 years. The bank also offers CD specials from time to time with even higher interest rates. The minimum deposit requirement for Bell Bank standard CDs is $500.

Merchants Bank

Merchants Bank may just offer CDs with maturity terms that range from 3 months to 3 years, but their CD rates are very attractive–especially on shorter terms. The minimum deposit requirement for Merchants 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 Minnesota, the MyBankTracker team surveyed the certificate of deposit accounts offered by the top 50 banks by deposit market share in Minnesota (based on FDIC June 2024 data) with more than 10 retail branches in the state--including coverage and availability in major cities such as Minneapolis, Saint Paul, Rochester, Duluth, and Bloomington.

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 a type of savings account that offer fixed interest rates for a set period of time, known as the term. Unlike traditional savings accounts, CDs lock your money for a specific term in exchange for higher interest rates.

Once you open a CD, you agree to keep your funds untouched until the maturity date, typically ranging from one month to 10 years. This fixed term allows the bank or credit union to invest the money in securities or other high-yield investments, which helps earn higher returns for the institution and, consequently, for you.

CDs are appealing because they provide a guaranteed rate of return for a specified duration. This is unlike savings accounts, where rates can change frequently. However, the trade-off is that you cannot withdraw funds without incurring penalties during the term, except for specific conditions like death or disability.

How to Pick a Certificate of Deposit

Picking the right CD involves evaluating several factors to ensure it aligns with your financial goals and risk tolerance. Below are key considerations:

Interest rate

The interest rate is the most crucial factor when choosing a CD. Comparing rates across different institutions is essential to maximize your earnings. Higher interest rates mean more returns over time, but they may also come with higher risks or stricter terms. Always check the annual percentage yield (APY) to understand the effective interest rate after accounting for compounding.

Maturity term

CDs are available with varying terms, from short-term (1-5 years) to long-term (10+ years). The term affects both your potential returns and the length of time you must wait to access your funds. Short-term CDs offer lower interest rates but allow for easier access once the term expires. Long-term CDs typically offer higher rates but tie up your money for longer periods, which can limit liquidity.

Minimum opening deposit

The amount you need to open a CD varies by institution. Traditional banks may require hundreds or even thousands of dollars to open a CD, while online banks often have lower minimums, sometimes as low as $1. This makes online CDs an attractive option for those with limited savings.

Early withdrawal penalty

Withdrawing funds before the CD matures can result in penalties, which may include losing interest or even deducting a fine from your principal. These penalties are designed to discourage early withdrawals, so it’s important to consider your financial stability before committing to a term.

Flexibility options

Some CDs offer flexibility through features like bump-up rates or the ability to add more funds during the term. Bump-up CDs allow you to increase your rate once midway through the term, providing an opportunity for higher returns if interest rates rise. Additionally, some CDs permit you to make additional deposits without affecting the original term, which can help boost your earnings over time.

Compared to Online CDs Available Nationwide

Online CDs are a modern alternative to traditional bank CDs and often provide distinct advantages. Many online banks offer higher interest rates than their brick-and-mortar counterparts due to lower operational costs. Additionally, online CDs frequently have lower minimum opening deposits, making them accessible to a broader range of investors.

One benefit of online CDs is the ease of application and management, as many can be opened entirely online without needing to visit a branch. This convenience also means you can track your CD’s status and manage it from anywhere. However, it’s essential to research the FDIC insurance coverage of online banks, as all federally insured institutions protect up to $250,000 per account holder, just like traditional banks.

FDIC Insurance

FDIC (Federal Deposit Insurance Corporation) insurance is a cornerstone of banking safety in the United States. It provides protection for depositors up to $250,000 per institution, with some exceptions for joint accounts, trusts, and other ownership categories. This coverage means that if your bank fails, you won’t lose your invested funds, up to the limit.

Not all CDs are FDIC-insured, so it’s crucial to verify whether the institution offering the CD is a member of the FDIC. For example, credit unions offer their own insurance (via NCUA), while CDs from foreign banks do not fall under FDIC coverage. Always check the financial health of the institution before committing to a CD, as even FDIC-insured institutions can experience failures, although these are rare.

FAQs

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

When a CD reaches its term end, you have two options: let it renew for another term at the current rate or withdraw the funds entirely. If you choose to renew, the interest will continue to accrue under the new terms.

What is a CD ladder?

A CD ladder is a strategy where you open multiple CDs with different maturity dates. By spreading your investments across terms of varying lengths, you can maximize returns while maintaining some liquidity. For example, opening a 1-year, 3-year, and 5-year CD at the same time allows you to access funds periodically without entirely locking them away.

How is interest accrued in a CD?

Interest is typically compounded annually or monthly, depending on the institution’s policy. The total interest earned upon maturity is calculated based on the APY of the CD.

How are interest earnings in CDs taxed?

Interest from CDs is subject to ordinary income tax rates. You’ll need to report the earnings on your tax return and may be required to pay taxes based on your bracket. Consulting a tax professional can help you navigate any specific requirements.