Massachusetts residents pay a flat 5% state income tax on CD interest in 2026 (rising to 9% on income above the $1,107,750 surtax threshold for 2026, per Mass.gov). The best CD rates available to MA residents reach that differ by bank and term at FDIC-insured online banks. Massachusetts-based DCU is also a nationally available credit union.
Bank rates below were read from each bank’s own page, with the date shown under the table. Verify current rates directly with the institution before opening.
Best CD Rates Available to Massachusetts Residents (Online Banks, October 2026)
| Institution | Type | 12-Month APY | Min. Deposit |
|---|---|---|---|
| Popular Direct | Online | 4.50% | $10,000 |
| Marcus by Goldman Sachs | Online | 4.40% | $500 |
| EverBank | Online | 3.50% | $1,000 |
Rates read from each bank’s own page: Popular Direct October 5, 2026, Marcus October 15, 2026, EverBank October 9, 2026. These online banks accept customers in any state. We did not check rates at local credit unions and community banks, so they are not listed with rates here; ask them directly.
Massachusetts State Income Tax on CD Interest
Massachusetts has a flat 5% income tax on most income including CD interest. The 4% Surtax on Taxable Income (approved by voters in 2022, often called the “Millionaire’s Tax”) applies to taxable income above an inflation-adjusted threshold — $1,107,750 for tax year 2026, per the Massachusetts Department of Revenue — creating a combined 9% state rate on income above that threshold.
After-tax yield on a hypothetical 4.50% CD for a typical MA resident (22% federal + 5% MA):
- Total marginal rate: ~27%
- After-tax yield: ~3.29%
T-Bills vs. CDs for Massachusetts Residents
Treasury bill interest is exempt from Massachusetts state income tax.
| 12-Month CD (hypothetical) | 1-Year Treasury | |
|---|---|---|
| Gross yield (hypothetical, same for both) | 4.50% | 4.50% |
| Federal taxable | Yes | Yes |
| MA state taxable (5%) | Yes | No |
| After-tax yield (22% federal + 5% MA) | ~3.29% | ~3.51% (federal-only) |
The Treasury’s state tax exemption gives it a modest after-tax edge for most MA residents at these rate levels. For those above the $1,107,750 surtax threshold paying the 9% state rate, Treasuries are more clearly superior.
What $10,000 Earns at Top Available MA Rates
| Term | APY (Popular Direct) | Gross Interest | After-Tax (22% federal + 5% MA) |
|---|---|---|---|
| 6 months | 4.35% | ~$215 | ~$157 |
| 12 months | 4.50% | ~$450 | ~$328 |
| 2 years | 4.70% | ~$962 | ~$702 |
Figures use Popular Direct’s APYs as of October 5, 2026 (it requires $10,000 to open a CD) and the compounding convention A = P(1+APY)^years.
DCU — A Massachusetts-Based National Credit Union
DCU (Digital Federal Credit Union) is headquartered in Marlborough, MA and is worth highlighting as a credit union option for CD savers nationwide:
- Open to all US residents through a small donation to a partner organization — confirm the current process directly with DCU
- Insurance: NCUA-insured
- Access: Entirely online; no branch requirement
Other Notable Massachusetts Institutions
- Metro Credit Union — Chelsea-based; open to residents of greater Boston area
- Eastern Bank — Boston-based mutual savings bank turned public company; relationship pricing available
- Rockland Trust — Southeastern MA community bank
- Needham Bank — Needham-based mutual savings bank; competitive CDs for relationship customers
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