CD rates have been on the way down for months, but they remain elevated. Today’s top CDs offer up to 5.4% annual percentage yield, or APY. That’s roughly three times the national average for some terms. And since your rate is locked in when you open the account, you’ll enjoy the same high APY even if rates continue dropping -- which experts expect they will.
However, CDs aren’t all created equal. APYs vary wildly depending on the bank and term you choose. So, to get the most for your money, it’s essential to know where you can get the best rates available today.
Read on to find out.
Key takeaways
- You can earn up to 5.4% with today’s best CDs.
- Experts expect the rate drops we’ve seen over the past several months will continue.
- By opening a CD today, you can lock in a still-high APY and protect your earnings from future rate drops.
Experts recommend comparing rates before opening a CD account to get the best APY possible. Enter your information below to get CNET’s partners’ best rate for your area.
Today’s best CD rates
Here are some of the top CD rates available right now and how much you could earn by depositing $5,000 right now:
Term | Highest APY | Bank | Estimated earnings |
6 months | 5.30% | Barclays; CommunityWide Federal Credit Union | $130.79 |
1 year | 5.40% | CFG Bank | $270.00 |
3 years | 4.66% | First Internet Bank of Indiana | $732.08 |
5 years | 4.55% | First Internet Bank of Indiana; First National Bank of America | $1,245.83 |
Why CD rates are trending downward
Savers have enjoyed high CD rates since early 2022 when the Fed began raising the federal funds rate to fight rampant inflation. From March 2022 to June 2023, the Fed regularly increased this rate, which affects how much it costs banks to borrow money from -- and lend money to -- each other. As a result, when the federal funds rate goes up, banks usually raise their rates on consumer products like savings accounts and CDs to attract new customers and boost their cash flow. At one point, APYs on the best CDs topped 5.6%.
Since July 2023, the Fed has opted to pause rate hikes while it monitors signs that inflation has started to cool. In response, CD rates stopped climbing and, by the fourth quarter of 2023, began moving downward. While today’s best CD rates at still well above 5%, we continue to see banks cutting APYs across terms.
Here’s where rates are compared to last week:
Term | CNET average APY | Weekly change* | Average FDIC rate |
6 months | 4.87% | -0.20% | 1.52% |
1 year | 4.99% | -0.20% | 1.81% |
3 years | 4.08% | No change | 1.38% |
5 years | 3.95% | No change | 1.38% |
*Weekly percentage increase/decrease from March 18, 2024, to March 25, 2024.
The latest Consumer Price Index Report showed the price of goods rose 3.2% in February -- which means we have a way to go before hitting the Fed’s target rate of 2%. The Fed’s decision to continue holding interest rates steady last week reflects this. As to when the Fed will start cutting rates, as experts have predicted it will later this year, the answer is: We’ll see.
“In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the Fed stated in its March 20 press release. “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
“The Fed has done the heavy lifting over the past 24 months, and I do not feel that they are willing to unravel that too quickly,” said Daugs. He cites high energy and housing costs and a labor market that may not be as solid as the Fed believes.
“The Fed has a ‘goldilocks’ balancing act ahead of them here,” Daugs said. “They cannot cut too soon and cannot wait too long; it needs to be ‘just right.’ To sum it up, my expectation is two rate cuts (25 basis points each in June and July) for 2024.”
That means you still have time to lock in a great APY and safeguard your earnings against rate cuts when they do occur.
Why you shouldn’t wait to open a CD
With rates as high as they’re expected to go, now’s the time to open a CD and lock in a great APY. Your rate is fixed when you open a CD, so your earnings will stay the same over the entire term. But that’s not the only reason to open an account today. CDs offer attractive benefits in any rate environment.
CDs are protected by federal deposit insurance if they’re held at banks covered by the Federal Deposit Insurance Corporation or credit unions insured by the National Credit Union Administration. That means your money is safe up to $250,000 per person, per institution if the bank fails.
Plus, unlike investments such as stocks, CDs are low-risk. You won’t lose your principal deposit unless you run into early withdrawal penalties, which you can easily avoid by choosing the right term.
Factors to consider when comparing CD accounts
In addition to a competitive APY, here’s what you should consider when comparing CD accounts:
- How soon you’ll need your money: Early withdrawal penalties can eat away at your interest earnings. So, be sure to choose a term that fits your savings timeline. You should be comfortable leaving your money untouched for the entire term.
- Minimum deposit requirement: Some CDs require a certain amount to open an account -- typically, $500 to $1,000. Others do not. How much money you have to set aside can help you narrow down the right account for you.
- Fees: Fees can eat into your earnings. Many online banks don’t charge maintenance fees because they have lower overhead costs than banks with physical branches. Still, read the fine print for any account you’re evaluating.
- Federal deposit insurance: Make sure any institution you’re considering is an FDIC or NCUA member so your money is protected if the bank fails.
- Customer ratings and reviews: Check out sites like Trustpilot to see what customers are saying about any bank you’re considering. You want to know that the bank is responsive, professional and easy to work with.
Methodology
CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We evaluate CDs based on APYs, product offerings, accessibility and customer service.
The current banks included in CNET’s weekly CD averages are: Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MYSB Direct, Quontic, Rising Bank, Synchrony, EverBank, Popular Bank, First Internet Bank of Indiana, America First Federal Credit Union, CommunityWide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America, Connexus Credit Union.