What are the best CD rates in California right now?

As of May 2026, the best CD rates available to California residents reach approximately 4.50%–4.75% APY at online banks such as Ally, Marcus by Goldman Sachs, and Discover Bank. These are FDIC-insured online banks accessible from any California ZIP code. Local California credit unions — including Golden 1 Credit Union and SchoolsFirst Federal Credit Union — also offer competitive rates, often in the 4.00%–4.50% APY range for 12-month CDs.

Is CD interest taxable in California?

Yes. California taxes CD interest as ordinary income at the state level. California has one of the highest state income tax rates in the country — a progressive rate from 1% to 13.3% (for income over $1 million). For most California residents in middle income brackets, the effective state tax rate on CD interest is 6%–9.3%. This does not reduce the attractiveness of CDs, but it does mean that Treasury bills — which are exempt from state income tax — are worth comparing for California savers, especially those in higher brackets.

Are there California-specific banks with good CD rates?

Yes. California has several large credit unions with competitive CD rates. Golden 1 Credit Union (Sacramento-based, one of the largest credit unions in the US) and SchoolsFirst Federal Credit Union (Tustin-based, open to education employees) regularly offer competitive share certificate (CD equivalent) rates. Online banks headquartered elsewhere are equally available to California residents and often match or exceed local credit union rates.

Do California CD rates differ from national rates?

No. FDIC-insured online banks and credit unions offer the same rates to California residents as to customers in any other state. 'California CD rates' refers to the rates available to California residents — which is the same pool of online bank and credit union products as anywhere in the US, plus California's local banks and credit unions as an additional option.

Should California residents consider Treasury bills instead of CDs?

California residents in the 9.3%+ state income tax bracket should seriously compare Treasury bills to CDs. T-bill interest is exempt from California state income tax (though still subject to federal tax). With California's top state income tax rate at 13.3%, a T-bill at 4.40% APY may produce a higher after-tax yield than a CD at 4.60% APY for high-income residents. Use an after-tax yield calculator comparing both before deciding.

California CD Rates 2026 — Best CDs Available to CA Residents

California residents can access CD rates up to 4.75% APY in May 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 May 2026 and change frequently. Verify current rates directly with the institution before opening.

Best CD Rates Available to California Residents (May 2026)

Institution	Type	12-Month APY	Min. Deposit
Online banks (Ally, Marcus, Discover, CIT)	Online	4.50–4.75%	$0–$2,500
Golden 1 Credit Union	CA credit union	4.00–4.50%	$500
SchoolsFirst FCU	CA credit union	4.00–4.50%	$500
California Credit Union	CA credit union	3.75–4.25%	$500
Navy Federal Credit Union	National credit union	4.00–4.50%	$1,000
Traditional big banks (Chase, BofA, Wells Fargo)	National bank	0.01–1.00%	$1,000

Online banks consistently offer 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.

California State Income Tax on CD Interest

CD interest is taxed as ordinary income in California. California’s progressive state income tax rates in 2026:

California Taxable Income (Single)	State Rate
$0–$10,756	1%
$10,757–$25,499	2%
$25,500–$40,245	4%
$40,246–$55,866	6%
$55,867–$70,606	8%
$70,607–$360,659	9.3%
$360,660–$432,787	10.3%
$432,788–$721,314	11.3%
Over $721,315	12.3% (+ 1% Mental Health surcharge for income over $1M)

For most California savers, CD interest is taxed at the 9.3% state rate on top of federal income tax. This means a CD at 4.65% APY has an after-tax yield of approximately:

Federal tax only (22% bracket): ~3.63% after-tax
Federal + California state tax (9.3%): ~3.14% after-tax

Treasury Bills as a California Alternative

California’s high state income tax makes Treasury bills particularly attractive as a CD alternative:

	12-Month CD	12-Month Treasury Bill
Gross yield	4.65%	4.35%
Federal taxable	Yes	Yes
California state taxable	Yes	No
After-tax yield (22% federal + 9.3% CA state)	~3.14%	~3.40%

In this example, the T-bill’s lower gross yield produces a 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 T-bills.

What $10,000 Earns at the Best Available CA Rate

Term	APY	Interest Earned
6 months	4.40%	~$219
12 months	4.65%	~$465
2 years	4.10%	~$838
5 years	3.65%	~$1,970

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.

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy