State Farm CD Rates: January 2025

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December 30, 2024
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State Farm offers better insurance policies than banking services, given the low rates on its deposit accounts

Fact checked by Michael Rosenston

State Farm may be a convenient place to do your banking and there are a few types of CDs. State Farm CD rates of about 0.05% tend to be very low overall outside of a few special terms with rates up to 4.75%, especially compared to the best CD rates available.

Important

State Farm’s CD rates may vary by location, and the rates listed below may not be available in all ZIP codes. The APYs listed below use Hennepin County, Minneapolis (home of U.S. Bank’s headquarters).

Step-Up CD accounts offer rates of 0.05% for first 7 months; 0.25% for next 7 months; 0.45% for next 7 months; and 0.65% for next 7 months. The blended APY is 0.35% and the total term is 28 months.

Its Trade-Up CD is available for terms of 30 months with an APY of 0.10% or for 60 months with an APY of 0.40%. Both Trade-Up CDs require a deposit of between $1,000 to $250,000.

Compare State Farm CD Rates

For the most part, State Farm CD rates are about as exciting as reading the full text of your insurance policies. If you’re interested in options that can get you to your savings goals faster and with less fuss, consider these CDs available from other banks.

State Farm CDs: Key Features

State Farm offers four different types of CDs. That’s a good range of choices, however State Farm’s CD rates for most CDs and terms are unfortunately very low.

State Farm has a relatively standard set of CDs. It offers jumbo CDs as well that are identical in regards to interest rates and term lengths (aside from offering three additional short-term options, ranging from “0” months to 2 months), although they require a much larger deposit size: $250,000 minimum. It’s not recommended to keep this much with any one bank, however, since funds above that amount aren’t protected by FDIC insurance.

State Farm also imposes some pretty harsh early withdrawal penalties, which are the same across all of its CD types. If you withdraw any money early, you’ll need to take out $500 at a minimum, which serves to increase your penalty amount if you don’t need that much. You’ll pay a two-factor penalty: a $25 base penalty fee, plus a portion of the amount you withdraw or the amount of interest you would have earned (depending on your term length), whichever is more.

As long as you don’t mind a wonky term length, you actually do have the potential to earn decent rates with State Farm’s Special CDs. The downside is that you’ll need at least twice as much—$1,000 minimum—to open anything other than a Standard CD, including this Special CD. In addition, it still retains the substantial early withdrawal penalty, so it’s not a good choice if you may need to tap into your savings at some point during your term.

State Farm Step-Up CD has a minimum deposit requirement of $1,000 and a term of 28 months. Its Trade-Up CD has a minimum deposit requirement of $1,000 and terms of 30 or 60 months.

State Farm’s Trade-Up CD offers a different way to increase your rates: You get to choose when. If the rates on the nearest standard CDs are higher than what you’re currently earning, you get a one-time-only opportunity to call up the bank and request your rate to be changed to the higher amount. This rate change can take up to 10 days to process, and it’s unclear whether State Farm honors your request for the stated rate if it should change during that processing period.

It sounds good in theory, but it’s unclear whether this potential scenario will ever happen. State Farm CD rates are already among some of the lowest. If earning higher rates is a priority to you, then you’d be much better off choosing another bank.

Pros and Cons of State Farm CDs

Pros

Specialty rates
Variety of CD types

Cons

Non-competitive rates
Minimum withdrawal rules

Pros Explained

Specialty rates: Special CD account rates range up to 4.75%, which is competitive compared to the rates of many other CDs.
Variety of CD types: State Farm offers several types of CDs to meet a variety of needs.

Cons Explained

Non-competitive rates: Generally, State Farm does not offer competitive rates. Many of its CDs have rates of 0.05%.
Early withdrawal rules: If you withdraw any money early, you’ll need to take out $500 at a minimum, which serves to increase your penalty amount if you don’t need that much.

About State Farm

State Farm is more well-known as an insurance company than as a bank. It is the largest issuer of private car insurance in the country, after all. It’s also been quietly running a banking division in the background, which it handed off to U.S. Bank to manage in 2020.

Today, it offers a full suite of account types, such as checking, savings, CDs, and even IRA CDs. Customers of State Farm Bank do get a few perks beyond regular U.S. Bank customers, such as being able to open CD accounts with a local State Farm agent and receiving preferred tier status with the bank.

However, like most large nationwide banks, U.S. Bank tends to charge a lot of fees and offers little interest in return. The main benefit of choosing a financial institution like U.S. Bank is the ability to walk into a branch; but since you’ll be mostly managing your account online through State Farm, there’s not much of a benefit there. You’d likely be much better served elsewhere with another online bank offering high-yield CDs.

Alternatives to State Farm CDs

High-yield savings accounts: If you’re willing to open an online savings account elsewhere, you may be able to earn higher rates. See the best high-yield savings account rates to compare how much you could earn.
High-yield checking accounts: You may find relatively high rates with some checking accounts. Be aware of their requirements and limits. The best high-interest checking accounts give you easy access to your money.
Certificates of deposit (CDs): You can also choose from a range of CDs from other financial institutions.
Money market account: Money market account can also provide a return on your savings. Check the best money market account rates to see how it compares.
Treasury securities: These government-backed bills, notes, and bonds sometimes offer even higher rates than CDs and may be more liquid.

Frequently Asked Questions (FAQs)

Does State Farm Increase Its CD Rates?

State Farm doesn’t provide a history of any across-the-board CD rate increases. It may increase or decrease its rates for any CD at any time. However, it does offer one type of CD—a Step-Up CD—that offers four rate increases during its 28-month term length.

As of this writing, each rate increase is staggered every seven months. However, since the rates offered on this account are very low to begin with, the blended rate is still much lower than you could get with the top CDs available today.

What Bank Is Associated With State Farm CD Accounts?

State Farm partners with U.S. Bank to offer its deposit account products, including CD accounts. This arrangement works similarly to many popular neobanks and fintech apps, which aren’t actually banks themselves. Instead, they offer a snappy interface and partner with real banks, where your money is actually stored and protected.

Are State Farm CD Accounts FDIC-Insured?

Yes, State Farm offers FDIC insurance on all of its deposit accounts through its partner bank, U.S. Bank. Your money is protected up to a limit of $250,000—a good number to keep in mind should your balance ever grow this large. If it does, it’s wise to split your savings up among different banks to ensure your money is fully protected.

Can Anyone Open a State Farm CD Account?

Only current customers of State Farm can open a CD account. However, since State Farm isn’t actually a bank and only offers banking services through its partner U.S. Bank, you may be eligible to open the same accounts directly through U.S. Bank instead.

Do State Farm CD Accounts Have Fees?

Yes, State Farm does charge a fairly hefty CD early withdrawal penalty if you withdraw your money before the term length ends. If you do this, State Farm requires you to withdraw at least $500 from your CD, potentially increasing your penalty amount. You’ll pay a $25 base fee, plus either a percentage of the amount you withdraw or a percentage of the interest you would have earned, whichever results in a higher total fee.