CDs
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Sheiresa McRae Ngo
Written by
Marc Wojno
Edited by
Jul 11, 2024 / 5 min read
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Key takeaways
- The highest CD rate across terms is 5.35% APY, offered on a 6-month CD.
- Some CDs out-earn high-yield savings accounts, although most CDs charge a fee for early withdrawals.
- Highest CD rates on most terms are at least triple the national averages.
A certificate of deposit (CD) can be a useful tool for earning interest on your funds as you save for your financial goals. Things to consider before opening a CD include the annual percentage yield (APY), how much money you wish to deposit, and whether you’re able to lock in the funds for the duration of the CD’s term.
Changes have been taking place across the CD landscape. Many banks are lowering rates in preparation for a possible Federal Reserve rate cut. Popular Direct recently lowered its 3-month CD rate from 5.30 percent APY to 5.25 percent APY. CIBC Bank also adjusted rates, lowering its one-year CD from 5.36 percent APY to 5.21 percent APY.
Right now, the highest APY across CD terms is 5.35 percent, which is offered on a 6-month term from Bask Bank. A minimum deposit of $1,000 is required. Many shorter terms are earning higher yields than longer ones in the current rate environment.
Bankrate monitors the top and average rates every weekday, and you’ll find today’s top CD rates in the table below.
Today's best CD rates by term
| CD term | Institution offering top APY | Highest APY | National average APY | Estimated earnings on $5,000 with top APY |
|---|---|---|---|---|
| 3-month | America First Credit Union | 5.25% | 1.22% | $64 |
| 6-month | Bask Bank | 5.35% | 1.71% | $132 |
| 9-month | Forbright Bank | 5.30% | N/A | $197 |
| 1-year | Bask Bank | 5.30% | 1.79% | $265 |
| 18-month | Bask Bank | 5.00% | 1.91% | $380 |
| 2-year | First Internet Bank of Indiana | 4.76% | 1.52% | $487 |
| 3-year | First Internet Bank of Indiana | 4.61% | 1.41% | $724 |
| 4-year | First Internet Bank of Indiana | 4.45% | 1.49% | $951 |
| 5-year | First Internet Bank of Indiana | 4.50% | 1.40% | $1,231 |
Note: Annual percentage yields (APYs) shown are as of July 11, 2024. APYs for some products may vary by region.
N/A: Not available; Bankrate doesn’t track national averages for the 9-month CD term due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.
How to make the most of today’s CD rates
Not all CDs are created equal, so it’s worth your time to shop around for one that pays the highest rate. CD yields increased steadily from June 2021 until late 2023, when many started to level off. However, higher-than-average rates can often be found at online-only banks. Such banks commonly offer high APYs to draw customers from brick-and-mortar banks, many of which pay paltry yields.
What the current rate environment means for CDs
In 2022 and 2023, the Federal Reserve raised its benchmark interest rate a total of 11 times, bringing its current target range to a 23-year high of 5.25-5.50 percent. However, the Fed has left rates unchanged for seven straight meetings, due to inflation not slowing as quickly as it has in the past.
Yields on competitive savings accounts and CDs tend to move in lockstep with the Fed’s interest rate moves. As such, many banks increase their yields when the Fed raises rates, and they lower yields when the federal funds rate drops. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have since been decreasing gradually.
Is it still a good time to open a CD?
“Even though CD yields have pulled back a bit, you’re still able to lock in yields that are well in excess of inflation and do so for multiple years,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The declines will likely accelerate as we get closer to the Fed beginning to cut interest rates, so there is no sense in waiting.”
CD FAQs
Research methodology
Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.
In June 2023, Bankrate updated its methodology that determines the national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.
