California residents can access CD rates up to approximately 4.44% APY in September 2026 through FDIC-insured online banks — the same national rates available to savers anywhere in the US. The two California-specific factors to understand: state income tax up to 13.3% applies to CD interest, and California’s large credit union ecosystem gives residents excellent local options alongside the national online banks.
Rates shown are as of September 2026 and change frequently. Verify current rates directly with the institution before opening.
Best CD Rates Available to California Residents (September 2026)
| Institution | Type | 12-Month APY | Min. Deposit |
|---|---|---|---|
| Online banks (top-rate) | Online | 4.30–4.44% | $0–$10,000 |
| Golden 1 Credit Union | CA credit union | 3.75–4.25% | $500 |
| SchoolsFirst FCU | CA credit union | 3.75–4.25% | $500 |
| California Credit Union | CA credit union | 3.50–4.00% | $500 |
| Navy Federal Credit Union | National credit union | 3.75–4.25% | $1,000 |
| Traditional big banks (Chase, BofA, Wells Fargo) | National bank | 0.01–1.00% | $1,000 |
Online banks consistently offer among the highest nationally available rates. Local California credit unions are strong alternatives, particularly for members who value in-person service or already have a credit union membership. Confirm current rates directly, since credit union certificate rates shift with market conditions.
California State Income Tax on CD Interest
CD interest is taxed as ordinary income in California, under a progressive state income tax structure that tops out at 13.3% (12.3% top bracket plus a 1% Mental Health Services surtax on income over $1 million). Exact bracket thresholds adjust for inflation each year — confirm the current-year thresholds at ftb.ca.gov before estimating your precise marginal rate.
For most California savers, CD interest is taxed at the 9.3% state marginal rate on top of federal income tax. Using a 4.35% APY 1-year CD as an example:
- Federal tax only (22% bracket): after-tax yield ≈ 3.39%
- Federal + California state tax (9.3% bracket): after-tax yield ≈ 2.99%
Treasury Bills as a California Alternative
California’s high state income tax makes Treasury bills particularly attractive as a CD alternative:
| 12-Month CD (top rate) | 1-Year Treasury | |
|---|---|---|
| Gross yield | ~4.35% | ~4.37% (per Fed H.15, Sept 14, 2026) |
| Federal taxable | Yes | Yes |
| California state taxable | Yes | No |
| After-tax yield (22% federal + 9.3% CA state) | ~2.99% | ~3.41% (federal-only) |
In this example, the Treasury’s similar gross yield combined with its state tax exemption produces a meaningfully higher after-tax yield for a California resident in the 9.3% state bracket. California residents in the 9.3%+ bracket should compare after-tax yields before choosing between CDs and Treasuries — and recompute using the live 1-year Treasury yield, since it moves daily.
What $10,000 Earns at the Best Available CA Rate
| Term | APY (top rate) | Interest Earned |
|---|---|---|
| 6 months | 4.25% | ~$210 |
| 12 months | 4.35% | ~$435 |
| 2 years | 4.35% | ~$889 |
| 5 years | 4.40% | ~$2,402 |
Figures use the APY compounding convention: A = P(1+APY)^years.
Notable California Credit Unions for CDs
- Golden 1 Credit Union — Open to all California residents; one of the largest credit unions in the US. Offers share certificates (CDs) at competitive rates.
- SchoolsFirst Federal Credit Union — Open to current and former school employees in California. Consistently competitive certificate rates.
- California Credit Union — Open to education community and affiliated groups in Southern California.
- Patelco Credit Union — Open to Bay Area residents and certain employers. Competitive certificate rates.
Membership requirements vary. Most California credit unions are open to all state residents or have broad field-of-membership rules.
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