The Best CD Rates in New Mexico for 2025

New Mexico is home to numerous banks, giving residents some variety when it comes to choosing a CD account. Finding the right CD for your savings goals can be time-consuming, so we've researched the options for you. Read on to learn which banks offer the best CD rates in New Mexico. 

The Best CD Rates in New Mexico

BMO

BMO offers a range of CD options with terms from three to 60 months. In addition to standard CDs, you'll find several special CD options, with the highest APY reserved for the 13-month term. Whether you choose a standard or special CD, the minimum opening deposit is $1,000. 

WaFd Bank

WaFd Bank issues standard and special CDs, which offer more competitive rates. Standard CD terms range from 14 days to 60 months, while special CDs let you lock in a solid APY for 7, 13, 19, or 30 months. The minimum opening deposit is $1,000 for all WaFd Bank CDs, unless you're opening an account for a minor, in which case it's $500.

Bank of Albuquerque

Bank of Albuquerque offers the most variety among the banks on our list, with savers able to choose from no penalty, flex, promotional, standard, and IRA CDs. The highest APY is offered with the 10-month promo CD, though you can still get a great rate with some of the bank's other CD options. The minimum deposit to open an account is $1,000. 

Lock In The Highest CD Rates Before Interest Rates Crash Again

The Federal Reserve plans to continue dropping interest rates. To ensure that you continue to generate reliable returns for years to come, consider a CD now to lock in the highest available rates:

Methodology

To choose the best CD rates in New Mexico, the MyBankTracker team surveyed the certificate of deposit accounts offered by the top 50 retail banks by deposit market share in New Mexico (based on FDIC June 2024 data) with more than 10 locations in the state--includes coverage and availability in major cities including Albuquerque, Santa Fe, and Las Cruces. 

The top recommendations are the results of analyzing the CDs based on the following criteria:

• Annual percentage yield (APY) for each CD’s corresponding maturity term
• The number of CD maturity terms available from the bank with which their corresponding APYs are competitive
• Minimum opening deposit requirements

How Do CDs Work?

CDs or certificate of deposit accounts are time deposit accounts. In simple terms, that means you agree to leave your money in the account for a set time frame, called a CD term. In exchange, the bank or credit union agrees to pay you interest. 

You can find CDs offered at big banks, regional banks, community banks, online banks, and credit unions. CD rates are typically fixed, though some banks may offer bump-up or raise your rate CDs, which allow you to increase your rate once or twice during the CD term. 

Once the term ends, your CD matures. At that point, you can:

• Roll your savings over to a new CD
• Withdraw the interest and roll the rest into a new CD
• Withdraw the interest and your original deposit

Banks may renew your CD automatically if you don't give them different instructions. There may be a grace period in which you can add more money to your CD or withdraw it. 

What happens if you need to withdraw your CD before it matures? Your bank can apply an early withdrawal penalty. For example, you might forfeit some of the interest earned. Or you may pay a flat fee. 

No penalty CDs offer a workaround. These CDs allow early withdrawals without a penalty. However, they typically earn a lower APY than other CDs. 

How to Choose a CD

Choosing a CD in New Mexico (or any other state) means weighing several factors to find one that fits your needs. Here are some of the most important considerations when comparing CDs. 

Interest rate

CDs earn interest, which helps you grow your money, but some pay a higher rate than others. As you shop around for a CD, pay attention to:

• How rates compare at brick-and-mortar vs. online banks and credit unions
• Which banks offer promotional rate CDs that may pay more than standard CDs
• How rates correspond to different maturity terms

Longer-term CDs may pay better rates, but that isn't true at every bank. You may get a higher APY with a shorter-term, promotional CD or an IRA CD. 

Maturity term

Your maturity term makes a difference if you want to avoid an early withdrawal penalty. The term should reflect how soon you anticipate needing the money you're saving in a CD, but still guarantee that you earn a competitive rate. 

Here's how to compare CD terms:

• Short-term CDs (3-12 months) give you more flexibility, with a shorter time to maturity, but rates may be lower
• Mid-term CDs (1-3) years can pay higher rates but require a longer wait until maturity
• Long-term CDs (3+ years) tie your money up longer but may offer better interest rates

While you're comparing terms, review the bank's CD renewal policies and how long you'll have to make changes to your account at maturity. 

Minimum opening deposit

The amount of money you need to open a CD varies by bank, but $500 is a typical opening deposit. However, you may find that some banks expect you to have $1,000, $2,500, or more to get your CD account set up. 

Deposit requirements are particularly important if you plan to build a CD ladder. Laddering means you open multiple CDs with different maturity terms. The idea is that you'll enjoy some flexibility and potentially avoid early withdrawal penalties since the "rungs" of your ladder mature at different times. 

It's possible to find banks that offer CDs with no opening deposit requirement, which can allow for some flexibility. Of course, a larger deposit can help you generate more interest over time. 

Early withdrawal penalty

Early withdrawal penalties are common with CDs. They're the bank's way of ensuring that you keep your money in the account until maturity. 

Again, banks may charge:

• Flat fees
• Fees equivalent to some or all of the interest earned
• A combination of both

Even if you don't plan to make an early withdrawal, it's still wise to be aware of the penalty just in case you need to tap your savings sooner than you anticipated. 

Flexibility options

Some banks offer savings options beyond standard CDs. They can include:

• No penalty CDs that allow for early withdrawals with no fee
• Bump-up or raise your rate CDs that increase your rate during the term
• Add-on CDs, which allow you to deposit additional funds after account opening

If you're eyeing any of these CD options, compare the rates against the bank's other CD products to see which one offers the most growth potential. 

Make Sure to Compare with Online Banks

Online banks usually don't offer branch banking access, but they can pay higher CD rates than traditional banks. Plenty of online banks offer high-yield CDs in New Mexico and nationwide. 

Here are a few notable features of online banks:

• Online banks often pay higher rates to savers, thanks to their lower overhead costs.
• They may charge fewer fees and set the minimum opening deposit requirements for new accounts lower. 
• Online and mobile banking help you stay connected to your money on the go. 

If you're comparing CDs at online banks, pay attention to interest rates, opening deposit requirements, and early withdrawal penalties. 

FDIC Insurance

FDIC insurance offers protection against bank failures. While that's not a common occurrence, the FDIC is there to safeguard your money if needed. 

• Most banks, including online banks, are FDIC-insured.
• FDIC insurance protects depositors up to $250,000; that limit applies at each bank you have accounts with. 
• Credit unions aren't protected by the FDIC, but they are insured up to the same limit by the National Credit Union Administration (NCUA). 

The simplest way to check if a bank is FDIC-insured is to visit its website. Banks are required to display their FDIC member status. You can also look for the FDIC signage at bank branches.

FAQs

Do you have to pay taxes on CD interest?

CD interest counts as taxable income, according to the IRS. You'll get a form from your bank at the end of the year showing how much interest you earned, and you'll need to report those amounts on your tax return. Whether you pay income tax on CDs at the state level depends on whether your state has a personal income tax, which New Mexico does. 

Is a CD account better than a savings account?

A CD could be better than a savings account if you're able to earn a higher rate on your money. However, savings accounts can offer more flexibility since your money isn't locked in. Your bank could, however, still charge a penalty fee if you make too many withdrawals from your savings account in a single month. 

What's the difference between a CD and an IRA CD?

A CD is a time deposit savings account that lets you earn interest for a fixed period. An IRA CD works the same way, but it's subject to the same tax rules that apply to traditional and Roth individual retirement accounts. IRA CDs are a safe, secure way to set aside money for retirement.

Can you open a CD for kids?

Some banks allow you to open CD accounts on behalf of a minor. For example, you could open a CD for your child to save money for college or their first car. You, not your child, is the account owner. The bank may list your child as a co-owner, though you would still have control over the CD.