CD Rates in California for November 2024

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 three months to five years, though some banks offer terms as short as one week to as long as a decade, even longer. 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 eat at some of your principal (the money you originally invest with 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.

Whether to invest in a short-term or long-term CD is dependent on your financial situation. 

By number of branches, the most popular banks in California include Chase Bank, Wells Fargo Bank, Bank of America and U.S. Bank. 

Of that list, only U.S. Bank is offering a handful of competitive CDs without onerous requirements. Californians looking for higher rates should consider offerings at online-only banks, which typically offer deposit products nationwide, meaning anyone can open an account so long as you meet the requirements. If you choose to open a CD at an online bank, 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.