Best Certificates of Deposit in Kentucky for 2025
- The best CD accounts in Kentucky are ones that feature competitive rates and a low opening deposit requirement.
- First Federal Savings Bank of Kentucky offers one variable rate CD option, among several fixed rate choices.
- Western Alliance Bank offers high-yield CDs in partnership with Raisin with a $1 minimum deposit to get started.
Certificate of deposit (CD) accounts are similar to savings accounts, with one big difference. When you open a CD, you agree to leave your money in the bank for a set period. You’ll earn interest, and when your CD matures, you can take out all your savings or roll it into a new CD.
Kentucky residents can look to traditional banks, credit unions, or online banks to meet their savings and CD needs. Read on to learn where to find the best CD accounts in Kentucky right now.
Best CD Interest Rates In Kentucky
Popular Banks and Credit Unions in Kentucky
1. West Point Bank: Locally owned, West Point Bank is focused on serving the needs of the local community. You’ll find just one CD option here with a five-month term, but it earns one of the highest APYs in the state.
2. Peoples Bank & Trust of Hazard: Peoples Bank & Trust offers several high-interest deposit accounts, including CDs. You can open a standard CD here or opt for an IRA CD to grow retirement savings.
3. First Federal Savings Bank of Kentucky: Most CD rates are fixed, but First Federal Savings Bank of Kentucky offers one variable rate option. Currently, the highest rate applies to the bank’s five-month CD, which you’ll need $500 to open.
4. Abound Credit Union: If you’re interested in saving with a credit union, Abound offers a range of CD options, including several promotional-rate CDs. You can earn an outstanding rate with an opening deposit of $500.
Online Banks Offering CDs
Which CD account should you open? Is an online bank better? Online banks offer some advantages that can’t be overlooked. Here are some of the best reasons to look online for CDs.
- Higher interest rates: Online banks often pay higher rates than local banks or traditional big banks. It’s worth comparing online CD rates to CD accounts in Kentucky to see which one offers more interest.
- Low minimum deposits: It’s not unusual for a traditional bank to set CD minimum deposits at $500, $1,000, or more. Online banks, on the other hand, may have no opening deposit requirement for new CD accounts.
- Low or no fees: Online banks have a reputation for being fee-friendly, compared to brick-and-mortar banks. Consider what you’ll pay for maintenance fees or early withdrawal penalties when comparing traditional bank CDs to online CDs.
- Quick account setup: Opening a CD online is as simple as plugging in a few pieces of information and linking an existing bank account. That spares you the hassle of having to visit a branch to start saving.
- FDIC insurance: The FDIC protects depositors against bank failures. Many online banks are FDIC-insured, so you can use CDs to grow your money safely and securely.
- Mobile app convenience: Mobile banking helps you stay connected to your CD savings on the go. You can log in to view details for your account or open a new CD to add to your savings total.
Need recommendations on where to open a CD online? Consider these four popular options.
1. Bread Savings: With Bread, you can open a CD with a term ranging from three to 60 months. You’ll need $1,500 to start saving and the rates are among the best found at any online bank.
2. Ponce: Ponce is a New York-based bank but you can still open a CD account here online even if you reside in Kentucky. Currently, Ponce offers just one CD with a seven-month term and an exceptional APY.
3. Western Alliance Bank: If you’re looking for an online CD with a low opening deposit requirement, you might try Western Alliance Bank. The bank offers high-yield CDs in partnership with Raisin and you only need $1 to get started.
4. Ally Bank: Ally lets you choose from High Yield CDs, Raise Your Rate CDs, and No Penalty CDs to fund your savings goals. There’s no opening deposit requirement at all, and the rates you can earn are well above average.
These are just some of the online banks you might explore when looking for a CD account to open. Doing some research can help you decide if an online CD is best or if it makes more sense to stick with local banks in Kentucky for your savings needs.
Factors to Consider When Choosing a CD in Kentucky
Kentucky CD accounts aren’t all alike, and you’ll need to look under the hood, so to speak, to get a feel for how they compare. Here are a few key factors to consider as you weigh your choices.
Interest Rates
CD rates can vary by bank and by zip code. If you’re looking at Kentucky CD accounts online, you might try plugging in different zip codes to see how rates are trending. And if you’re more interested in saving locally, consider comparable CD options from banks and credit unions in your immediate area.
Term Length
You might choose a shorter CD term if you know you’ll need your savings sooner, rather than later. However, you could get a higher rate by choosing a longer term. When looking at Kentucky banks, check the minimum and maximum CD terms offered and the corresponding rates.
Minimum Deposit
Some Kentucky banks may require a larger opening deposit for a CD account than others. Look for a bank that pays a solid rate and offers CDs with an opening deposit requirement that aligns with your budget.
Accessibility
One final consideration for Kentucky CDs is the bank’s footprint. It’s helpful to know how many branches and ATMs the bank has and where they’re located. You may also want to take a look at the bank’s online and mobile banking services to see how robust and user-friendly they are.
Pros and Cons of CDs
CDs have a lot of great benefits, but they aren’t right for every situation. If you’re leaning toward opening a CD account in Kentucky or with an online bank, consider the pros and cons first.
Pros
- CD rates may surpass money market or high-yield savings account rates
- Fixed rates allow for predictability, so you can easily gauge your money’s growth
- Online banks can offer low opening deposit requirements, so it’s easier to start saving
- Locking your money in for a set term removes the temptation to spend it
Cons
- Most CDs don’t allow early withdrawals without a penalty
- Other savings options could pay higher rates, without requiring you to lock your money in
- High opening deposit requirements could put some CD accounts out of reach
- Online CDs mean you forgo the convenience of banking at a branch
Start Your CD Savings Journey
Opening a CD could get you one step closer to your financial goals. If you’re looking for accounts in Kentucky, there’s no shortage of options to choose from. Take your time and compare the best CD rates at different banks to find the right one for you.
Frequently Asked Questions
Yes, Kentucky taxes CD interest along with other forms of taxable income. The current income tax rate is a flat 4.00%. You’ll need to report your CD interest earnings on your federal tax return and your state return when you file each year.
If you’re 18 or older, you can open a CD account without any help in Kentucky. Teens under 18 will need a parent or guardian to open a CD account or any other type of bank account. Banks treat teens and parents as co-owners of the account.
Consider a Kentucky credit union versus a bank if you can earn a higher interest rate on CD accounts. Abound Credit Union, for example, offers some outstanding rates for promotional CD terms. You’ll just need to know the membership requirements to join any Kentucky credit union you’re interested in joining.
