Best Certificates of Deposit (CDs) in Arkansas for 2025
A certificate of deposit (CD) is a popular savings tool that allows you to earn additional interest on your money. CDs pay a fixed interest rate in exchange for locking your money up for anywhere from a few months to several years.
While earning a solid return from a CD is possible, shopping around for the best rate is essential. This guide covers the top CD rates from banks and credit unions across Arkansas. Keep reading to learn the best rates and what to look for in a CD.
Best CD Interest Rates In Arkansas
Popular Banks and Credit Unions in Arkansas
- Bank of OZK: Founded in 1903, this Arkansas community bank has dozens of branches around the state, not to mention the most competitive CD rates.
- Bank of Little Rock: This small community bank has just five branches but offers personalized service with high CD rates.
- Arkansas Federal Credit Union: Founded in 1956, AFCU serves anyone who lives or works in Arkansas and has become a vital part of the state community.
- Online banks: Many online banks serve customers nationwide, including in Arkansas, with some of the most competitive CD rates.
Online Banks Offering CDs
Online banks have become increasingly popular for their CDs and other savings options. Here are some of the top perks of opening a CD with an online bank:
- Higher interest rates: Online banks often have more favorable interest rates than brick-and-mortar banks, thanks to their lower overhead costs.
- Increased accessibility: Online banks are often available nationwide, which makes it easy to access your account from anywhere via a mobile banking app.
- Low minimum deposits: Online banks tend to have lower minimum deposit requirements than traditional banks, meaning you can start earning with less money.
- Quick account setup: You can set up an online CD from the comfort of your home without having to visit a bank or credit union branch.
- Low or no fees: Online banks often have lower fees than traditional banks and credit unions, and some don’t charge any fees at all.
If you’re interested in a CD from an online bank, here are some of the most competitive options on the market today:
- Marcus by Goldman Sachs: Marcus offers CDs ranging from six months to six years, with rates of up to 4.50% on its 14-month CD and 4.25% on its one-year CD.
- Synchrony Bank: Synchrony Bank offers CDs with no minimum deposit, including two-year CDs with bump-ups and 11-month no-penalty CDs.
- Discover® Bank: Discover offers CD terms as high as 10 years and rates as high as 4.10% for some terms.
- Ally Bank: Ally Bank has high-yield CDs, Raise Your Rate CDs, and no-penalty CDs, so you can choose the one that’s best for you.
The best CD for you depends on various factors, including the interest rate, the term you’re looking for, the type of financial institution you prefer, and more. The options above can be a good starting point to help you find the right choice for your situation.
Factors to Consider When Choosing a CD in Arkansas
When choosing a CD in Arkansas, it’s important to choose one that’s right for your situation based on various factors. Here are some of the top factors to consider:
Interest Rate
The interest rate is likely one of the most important factors you’ll consider when choosing a CD. Some traditional brick-and-mortar banks offer negligible rates, while some financial institutions offer highly competitive rates — this is common with online banks.
Term Length
CD terms can range from just a few months to several years. The CD term that offers the best rate may vary depending on the current rate environment. You can find the best rate by comparing your options on each bank’s website. Keep in mind, however, that CDs require you to lock your money up. Make sure not to commit to a term length that’s too long.
Minimum Deposit
Many CDs have minimum deposit requirements. For example, you may be required to deposit at least $500 or $1,000 to open a CD. If you’re getting started with a relatively low amount, you may need to shop around for a bank or credit union with a lower limit. However, if you’re planning to deposit more than $1,000, you’ll have no trouble finding a CD.
Penalties
Many CDs charge early withdrawal penalties if you take out some or all of your money before it reaches maturity. The penalty is often based on a certain number of months of interest. There are penalty-free CDs, but they may not pay as much interest.
Local vs. Online Options
Some people prefer working with a local bank or credit union, where they can visit a nearby branch. Others prefer the convenience and accessibility of an online bank. There’s no right answer; you’ll just have to decide which makes the most sense for you.
CD Pros and Cons
If you’re considering investing in a CD, it’s important to understand how they work, their benefits, and some potential risks and downsides.
Pros
- High returns than traditional savings accounts
- Fixed interest rates and guaranteed returns
- Variety of term options to fit your needs
- No risk of loss thanks to FDIC and NCUA insurance
Cons
- Require you to lock up your money
- Early withdrawal penalties may apply
- Lower returns than higher-risk investments
- Risk of rates increasing while you’re locked into a lower rate
Grow Your Savings With CDs
CDs are a safe and effective way to earn a higher interest rate on your savings. In Arkansas, there are many banks and credit unions to choose from, from local financial institutions to large online banks. Make sure to compare CD interest rates, terms, and other features to find the best option for your situation.
Frequently Asked Questions
Yes, Arkansas imposes a state income tax on all income earned, including interest from your certificates of deposit. Arkansas’s tax rates range from 0% to 3.9%, depending on your household income. Make sure to report your interest income on both your state and federal income tax returns.
The best short-term CDs include the seven-month CDs from Bank OZK and Bank of Little Rock, which offer rates above 4.50%. Arkansas Federal Credit Union offers short-term CDs with rates as high as 4.50% if you prefer a credit union.
You can get a better interest rate from local banks and credit unions in Arkansas, but only if you take advantage of their specialty rates, which are usually limited to only certain terms. You may be better off choosing an online bank for higher rates across the board.
