Putting money into a certificate of deposit (CD) is a simple, secure way to earn a strong return. And, right now is a perfect time to use a CD, as rates are currently very high – the result of the Federal Reserve raising the federal funds rate repeatedly over the past 18 months. While the Fed does not directly set CD rates, the rates offered by consumer banks tend to move alongside the federal funds rate.

When choosing a CD, the key is to find the best rate and the right term. Most CDs come with substantial penalties for early withdrawals, so it's important to ensure that the money you are investing isn't money you'll need access to during the CD term. And, if you're able to leave your money deposited for the longer term, a 5-year CD is a good way to earn significant interest.

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5 5-year CD rates offering at least a 4.5% yield

Make sure you shop around when looking at CDs. You want to get the best rate possible and the term you want. If you're looking for a long-term CD, these are some solid options with the potential for good returns.

Bread Savings: 4.75%

Bread Savings is an online-only financial institution that currently offers 4.75% returns on 5-year CDs. Bread is actually a product of Comenity Capital Bank, which has existed for several decades. There is a $1,500 minimum deposit requirement for the 5-year CD.

Popular Direct: 4.70%

The minimum deposit requirement of $10,000 to open the 5-year CD at Popular Direct, so this may be a good option for those who have a hefty amount of money to deposit. One thing to note, though, is that Popular Direct does not offer special CDs, like bump-up or no-penalty products.

Barclays: 4.50%

While the yield offered by Barclays is slightly lower than some of the others on this list, there's one major benefit: There is no minimum balance requirement. If you want to earn a bit of cash but don't have a lot of money on hand, this might be a good option to consider.

Schools First: 4.60%

The 5-year CD from Schools First has a minimum deposit requirement of $500. The bank offers higher interest rates for accounts with higher balances, though, so depositing more cash in your CD could give you a higher rate of return. The deposit tiers are $500, $20,000, $50,000 and $100,000.

First Internet Bank of Indiana: 4.59%

The minimum investment at this bank is $1,000 for a CD. In addition to eight different CD terms, the bank offers savings, checking and other financial services.

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Reasons to open a CD

In general, CDs can be a part of a very strong strategy for saving. For starters, CDs are extremely low-risk, unlike investment products like mutual funds or brokerage accounts. These accounts are FDIC- or NCUA-protected, so in the event of a bank failure, up to $250,000 per account, per depositor is covered.

Another advantage of CDs is that the rate is locked in. With a high-yield savings account, the rate you earn is variable, meaning that you'd be subject to future rate drops. With a CD, you'll earn at the same rate you were offered when you opened the account for the entirety of the term. And, with current rates that are favorable to savers, this is a good time to consider using CDs as part of your financial plan. 

The bottom line

A CD is a way to earn a high interest rate without taking on much risk. If you act right away, you can get strong interest rates on 5-year CDs – and no matter what happens to rates during the 5-year term, you'll still earn the interest rate you locked in when opening the CD. In turn, putting some of your savings into a CD right now could be a smart decision.