Current CD Rates in Texas: Where to Find the Best Returns

Certificates of Deposit (CDs) continue to be one of the most reliable savings vehicles for Texans looking to grow their money with minimal risk in 2025. These time-bound deposit accounts offer fixed interest rates significantly higher than traditional savings accounts, with current CD rates in Texas hovering around 4% APY for many terms.

With today’s elevated interest rate environment, Texas savers have a unique opportunity to lock in attractive returns that provide predictable growth and peace of mind. CDs serve as the cornerstone of many conservative financial strategies, offering FDIC protection up to $250,000 while encouraging disciplined saving habits. Here are three key reasons why CDs continue to stand out for Texans:

• Safety and stability: CDs provide guaranteed returns with no risk of market volatility, making them ideal for emergency funds or short-term financial goals.
• Regional variations: Texas’s robust economy often influences local financial institutions to offer competitive rates to attract depositors.
• Comparison shopping: Rates can vary significantly between national banks, local institutions, and credit unions across the state, making comparison shopping essential for maximizing your returns.

What to Look for in CD Rates

When comparing CD options, it’s important to look beyond just the advertised interest rate. Several key factors determine which CD best fits your financial goals and risk tolerance. Here’s what to keep in mind when evaluating CD rates in Texas:

1. Interest rate: Texas CD rates currently range from 3.50% to as high as 5.20% APY.  While rates vary by institution and term length, many smaller regional banks and credit unions often provide more competitive rates than large national banks. For example, Bank of South Texas offers attractive rates such as 4.13% APY on a 6-month CD and 3.75% APY on a 12-month CD, making them a strong contender for savers seeking stability and growth.
2. Term length: Short-term CDs (3-12 months) currently offer some of the highest rates, with many Texas institutions providing 4%+ on 6-month terms. Longer terms traditionally yield higher rates but consider whether locking funds away for 3-5 years aligns with your financial timeline.
3. Choosing Between Short-Term and Long-Term CDs
   When deciding on a CD term, consider both your financial goals and the current interest rate environment. Short-term CDs (3–12 months) typically offer higher flexibility and are ideal if you anticipate needing access to your funds soon or expect rates to rise. Long-term CDs (24 months or more), on the other hand, provide stability and protect you from potential rate drops, making them suitable for those who can commit funds for an extended period. A CD ladder strategy, splitting your investment across multiple terms, can help balance liquidity with long-term earning potential.
4. Minimum deposit requirements: Entry points for CDs in Texas vary widely, ranging from very low minimums to amounts exceeding $10,000 at certain institutions. Bank of South Texas maintains an accessible requirement of $1,000 to open a CD, making it a practical choice for many savers.
5. Early withdrawal penalties: Most Texas banks charge penalties based on CD term length. Typical penalties range from 1-3 months of interest, though some are steeper. Bank of South Texas charges 90 days interest for CDs up to 1 year and 183 days for longer terms.
6. FDIC insurance: Federal deposit insurance protects your principal and interest up to $250,000 per depositor, per bank This protection remains the same regardless of whether you choose a national or local Texas bank.

Spotlight: Bank of South Texas and Their CD Offerings

With branches in McAllen, Pharr, Kingsville, Hebbronville, Mission, and Edinburg, Bank of South Texas has established itself as a trusted financial institution serving the Rio Grande Valley region. Their commitment to “Genuine Hometown Banking” sets them apart in the competitive Texas market.

Currently, Bank of South Texas offers competitive CD rates that compare favorably with other local institutions:

• 6-Month CD: 4.05% interest rate (4.13% APY)
• 12-Month CD: 3.70% interest rate (3.75% APY)

These rates make Bank of South Texas a solid contender when shopping for CDs in the region.

What sets Bank of South Texas apart is their customer-friendly approach to CD accounts. With a reasonable $1,000 minimum deposit requirement and straightforward early withdrawal penalties (90 days interest for CDs up to 1 year), they offer accessibility alongside competitive returns.

As a community-focused institution, Bank of South Texas provides personalized service that national banks often can’t match, making them worth considering for Texans who value local banking relationships and competitive CD rates.

How to Find the Best CD Returns in Texas Today

• Compare rates across multiple institutions: Check both national banks and local Texas credit unions, as smaller institutions often offer more competitive rates to attract deposits. Online comparison tools can help you quickly survey the Texas CD landscape.
• Look beyond advertised rates: Consider minimum deposit requirements, which can range from $500 to $10,000+ in Texas. Also review early withdrawal penalties, which typically range from 90 days to 6 months of interest.
• Monitor economic indicators: Track Federal Reserve announcements, as they directly impact CD rates. Subscribe to financial newsletters or set up Google alerts for “Texas CD rates” to stay informed of rate changes.
• Consider timing strategically: With the Fed expected to continue rate cuts through 2025, locking in longer-term CDs now may secure higher rates before they decline further.
• Implement a CD ladder: Divide your investment across multiple CDs with staggered maturity dates (3 months, 6 months, 1 year, etc.) to balance higher long-term rates with regular access to funds.
• Balance your financial priorities: The highest rate isn’t always the best choice. Consider your liquidity needs, timeline for accessing funds, and overall financial goals when selecting a CD.

If you are looking to secure your savings with a high-yield, low-risk investment Bank of South Texas offers competitive Certificate of Deposit (CD) rates that outshine traditional savings accounts. With a range of terms and attractive fixed interest rates, our CDs provide a reliable way to grow your savings without market volatility.

Whether you’re saving for a big purchase or planning for the future, our CDs offer guaranteed returns and are FDIC-insured up to $250,000. Don’t miss the opportunity to maximize your earnings with our flexible CD optday to learn about the best CD rates in Texas.