Washington State residents benefit from no state income tax on CD interest — one of only nine US states with this advantage. CD interest is taxed at the federal level only. The best CD rates available to Washington residents reach that differ by bank and term at FDIC-insured online banks.
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 Washington 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.
Washington State Tax on CD Interest
Washington has no state personal income tax. CD interest is subject to federal income tax only.
Washington’s capital gains tax (enacted 2023, applies to long-term gains above an inflation-adjusted annual threshold — confirm the current threshold at dor.wa.gov) does not apply to CD interest — CD interest is ordinary income, not a capital gain. Washington residents in all income brackets pay the same federal-only tax treatment on CD earnings as residents of Texas and Florida.
What $10,000 Earns at Top WA Rates
| Term | APY (Popular Direct) | Gross Interest | After-Tax (22% federal bracket) |
|---|---|---|---|
| 6 months | 4.35% | ~$215 | ~$168 |
| 12 months | 4.50% | ~$450 | ~$351 |
| 2 years | 4.70% | ~$962 | ~$750 |
| 5 years | 5.00% | ~$2,763 | ~$2,155 |
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.
BECU — Washington’s Largest Credit Union
BECU is the standout local option for Washington CD savers:
- Membership: Open to residents of King, Pierce, Snohomish, and other WA counties; also open through employer and association affiliations
- Products: Share certificates (CDs) across multiple terms
- Insurance: NCUA-insured (credit union equivalent of FDIC)
Confirm BECU’s current certificate rates directly, since they move with the broader rate environment and may run somewhat below top online-bank rates.
Washington State Credit Unions Worth Checking
- BECU — Largest in WA; open to most King/Pierce/Snohomish residents
- Sound Credit Union — Tacoma-based; open to Pierce County and surrounding areas
- Salal Credit Union — Seattle-based; open to Seattle-area residents through various eligibility paths
- Washington State Employees Credit Union (WSECU) — Open to WA state government employees and family members
T-Bills vs. CDs for Washington Residents
Unlike California or New York residents, Washington residents get no additional state tax benefit from Treasuries — both CDs and Treasuries are taxed at the federal level only. Choose between them based on gross yield and convenience: compare the current 1-year Treasury yield with the CD rate you are offered.
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