New Jersey residents face one of the higher state income tax burdens in the US on CD interest — roughly 1.4% to 10.75%, depending on bracket. The best CD rates available to NJ residents reach approximately 4.44% APY through FDIC-insured online banks, but the state’s high tax rates mean that Treasury bills (exempt from NJ state income tax) are worth comparing carefully.
Rates shown are as of September 2026 and change frequently. Verify current rates directly with the institution before opening.
Best CD Rates Available to New Jersey Residents (September 2026)
| Institution | Type | 12-Month APY | Min. Deposit |
|---|---|---|---|
| Online banks (top-rate) | Online | 4.30–4.44% | $0–$10,000 |
| Columbia Bank | NJ community bank | 3.25–3.75% | $1,000 |
| Provident Bank | NJ community bank | 3.25–3.75% | $1,000 |
| Garden State Federal Credit Union | NJ credit union | 3.25–3.75% | $500 |
| Traditional big banks | National bank | 0.01–1.00% | $1,000+ |
New Jersey State Income Tax on CD Interest
New Jersey uses a progressive income tax structure ranging from roughly 1.4% at the lowest bracket to 10.75% at the highest. Confirm the current-year bracket thresholds at nj.gov/treasury/taxation, since exact dollar cutoffs are subject to periodic adjustment.
Illustrative after-tax yield on a 4.35% CD for a typical NJ resident in the ~6.37% bracket (22% federal + 6.37% NJ):
- Total marginal rate: ~28.37%
- After-tax yield: ~3.12%
T-Bills vs. CDs for New Jersey Residents
Treasury bill interest is exempt from New Jersey state income tax.
| 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 |
| NJ state taxable (~6.37%, illustrative) | Yes | No |
| After-tax yield (22% federal + 6.37% NJ) | ~3.12% | ~3.41% (federal-only) |
At a ~6.37% state tax bracket, the Treasury’s after-tax yield is meaningfully higher than the CD’s. For NJ residents in higher brackets, the Treasury advantage widens further.
What $10,000 Earns at Top Available NJ Rates
| Term | APY (top rate) | Gross Interest | After-Tax (22% federal + 6.37% NJ, illustrative) |
|---|---|---|---|
| 6 months | 4.25% | ~$210 | ~$151 |
| 12 months | 4.35% | ~$435 | ~$312 |
| 2 years | 4.35% | ~$889 | ~$637 |
Figures use the APY compounding convention: A = P(1+APY)^years.
Notable New Jersey Options
- Columbia Bank — Fair Lawn-based NJ community bank; competitive CD rates for NJ/northern NJ area customers
- Provident Bank — Jersey City-based; branch network across NJ with relationship pricing
- Lakeland Bank — Oak Ridge-based; northern NJ community bank
For most NJ residents, online banks and Treasuries (especially for higher-income earners) provide better returns than NJ community bank CDs.
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