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 approximately 4.44% APY in September 2026 through FDIC-insured 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 Washington Residents (September 2026)
| Institution | Type | 12-Month APY | Min. Deposit |
|---|---|---|---|
| Online banks (top-rate) | Online | 4.30–4.44% | $0–$10,000 |
| BECU | WA credit union | 3.75–4.25% | $500 |
| WaFd Bank (Washington Federal) | WA regional bank | 3.25–3.75% | $1,000 |
| Sound Credit Union | WA credit union | 3.25–3.75% | $500 |
| Traditional big banks | National bank | 0.01–1.00% | $1,000+ |
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 (top rate) | Gross Interest | After-Tax (22% federal bracket) |
|---|---|---|---|
| 6 months | 4.25% | ~$210 | ~$164 |
| 12 months | 4.35% | ~$435 | ~$339 |
| 2 years | 4.35% | ~$889 | ~$693 |
| 5 years | 4.40% | ~$2,402 | ~$1,874 |
Figures use the APY 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: as of September 2026 the 1-year Treasury yields approximately 4.37% (per the Federal Reserve’s H.15 release), comparable to top 1-year CD rates.
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