CD Rates in New Jersey for July 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 6 months to 5 years, though some banks offer terms as short as three months to as long as 10 years, some even longer. To find the right term for you, consider how long you can park your cash in the account without the need to withdraw from it. Unless you're opening a no-penalty CD, you'll likely 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 perhaps 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 past 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, be prepared to pay an early withdrawal penalty, which could eat away some of your principal (the money you originally invested 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.

When choosing a CD, New Jersey residents should consider CDs available both nationwide and those available only in their region. Online-only banks typically offer CDs nationwide, and these tend to offer the highest rates. But if you already bank at a New Jersey-based institution and want to consolidate your finances under one roof, it may be worth giving your bank a call to inquire about its CD offerings. The most popular banks in New Jersey by number of branches include Wells Fargo, TD Bank and Bank of America.  

That noted, there are also many banks based outside of New Jersey that still offer deposit products for residents of the state. CD terms, yields and penalties vary widely for regional banks, but that's another avenue New Jersey residents can check when narrowing their options.