Synchrony Bank Certificate of Deposit (16 Month CD)

Synchrony Bank is an online-only bank with no branches, and its CD lineup is unusually wide: roughly a dozen terms from 3 months to 5 years, plus a Bump-Up CD, a No-Penalty CD and IRA versions. The feature that separates it from most competitors is that there is no minimum deposit and no minimum balance on any term. You can open one with $100 and still earn the posted rate, where Bread wants $1,500 and Sallie Mae wants $2,500. Synchrony's featured term is the 16 month CD at 4.30% APY. It sits near the top of the entire curve while asking for a little over a year of your money. The absolute highest rate is the 5 year at 4.35% APY, but that extra 5 basis points costs you 44 more months of commitment, which is a poor trade unless you specifically want to lock in today's rates for a long time. The rest of the range: 6 months and 1 year at 4.10%, 14 months at 4.15%, 18 months and 2 years at 4.25%, 3 years at 4.30%, 4 years at 4.00%. Watch the outliers at the bottom of the menu, because they are traps. The 3 month CD pays 0.25% APY and the 11 month No-Penalty CD also pays 0.25% APY. Those are not competitive with anything, including Synchrony's own High Yield Savings account at 3.30% APY. The 24 month Bump-Up CD pays 3.00% APY, so the option to request one rate increase during the term costs you about 125 basis points up front versus the plain 2 year CD. Do not buy the flexibility products here without comparing them to the plain CD first. The early withdrawal penalty is tiered by term: 90 days of simple interest at the current rate on terms of 12 months or less, 180 days on terms longer than 12 months but under 48 months, and 365 days on terms of 48 months or more. The 16 month CD therefore carries a 180 day penalty. You cannot add money after the CD is funded, though you can add funds during the 10 day grace period after maturity, and you can withdraw earned interest at any time without penalty and route it to a Synchrony savings account or an outside bank. This suits savers who want a top-of-market rate without a large deposit, and people building a CD ladder who value the unusual number of term choices. Skip it if you want branch access, since Synchrony has none, and skip the 3 month, No-Penalty and Bump-Up versions entirely at current pricing. If you might need the money back inside 16 months, a plain high-yield savings account will cost you less than a 180 day interest penalty.