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Best CD Rates Today – Now’s the Time to Snag APYs up to 5.35%, May 20, 2024

Top CDs currently earn more than three times the national average for some terms.

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Key takeaways

  • You can earn up to 5.35% APY with a high-yield CD.
  • Rates have been going down for months, and many experts expect this trend to continue.
  • By opening a CD now, you can lock in today’s best APYs and protect your earnings from potential rate drops.

A certificate of deposit can be an easy way to earn interest on your money and protect your purchasing power from inflation. When you open a CD, your rate is fixed for the entire term, or lifetime, of the CD. That means your earnings will stay the same regardless of overall rate trends.

hand holding money fanned out
Zooey Liao/CNET

Today’s top CDs boast annual percentage yields, or APYs, as high as 5.35%. But APYs have been gradually falling since the end of 2023, and many experts expect them to continue dropping in the coming months. So, if you’ve been considering opening a CD, now’s the time to lock in a great rate while you still can.

“If you can commit your funds to the maturity of the CD and desire stability of principal, then investing in a CD is a great option in this environment,” said Faron Daugs, CFP, founder and CEO at Harrison Wallace Financial Group.

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:

TermHighest APYBankEstimated earnings
6 months5.35%Rising Bank$132.01
1 year5.35%NexBank$267.50
3 years4.75%MYSB Direct$746.88
5 years4.80%BMO Alto$1,320.86
APYs as of May 20, 2024, based on the banks we track at CNET. Earnings are based on APYs and assume interest is compounded annually.

Have we reached the peak for CD rates?

Before the Federal Open Market Committee meeting earlier this month, experts anticipated three rate cuts later this year. But with inflation remaining stubbornly high, these predictions seem less likely.

The latest Consumer Price Index report shows inflation rose 3.4% year or over year. That’s down slightly from 3.5% in March but still far from the Fed’s 2% target rate. Some experts now believe rate hikes are more likely than rate cuts in the coming months. Others believe rate cuts are still possible in 2024, but we may see only two instead of three.

“I expect the Fed to follow what they’ve been saying by cutting rates a few times before the end of the year,” said Dana Menard, CFP, founder and lead financial planner at Twin Cities Wealth Strategies. “It will likely depend on the status of inflation over the next few months as well as other economic factors that may slow down or expedite the Fed’s schedule for lowering rates.”

But while the future of CD rates is up for debate, one thing is certain: Locking in today’s high APYs can protect your earnings from rate cuts when they do happen.

How Fed decisions impact CD rates

The Fed doesn’t directly set CD rates, but its decisions have ripple effects. The federal funds rate determines how much it costs banks to borrow and lend money to each other. So, when the Fed raises this rate, banks usually follow suit, raising APYs on consumer products like savings accounts and CDs to attract new customers and pad their cash reserves.

Starting in March 2022, the Fed steadily raised the federal funds rate to combat record-high inflation, and CD rates skyrocketed. Here’s how average CD rates moved from 2010 to 2023, according to CNET sister site Bankrate:

As inflation began to show signs of cooling, the central bank paused rates at its last six meetings. Experts predicted rate cuts in mid-to-late 2024, and CD rates began dropping at the end of 2023. The past few weeks have seen a mix of rate cuts and rate hikes as banks re-evaluate their strategies for different CD terms. These fluctuations have been minor, but they reflect the uncertainty over where inflation will go next and what the Fed’s next decision will be.

Here’s where CD rates stand compared to last week:

TermCNET average APYWeekly change*Average FDIC rate
6 months4.76%-0.21%1.57%
1 year5.00%No change1.81%
3 years4.13%+0.24%1.41%
5 years3.95%No change1.39%
APYs as of May 20, 2024. Based on the banks we track at CNET.
*Weekly percentage increase/decrease from May 13, 2024, to May 20, 2024.

Benefits of opening a CD today

With rates still attractive, now’s the time to open a CD and lock in a high APY. But a fixed rate isn’t the only perk you’ll enjoy by opening a CD today.

CDs are insured up to $250,000 per person, per bank, as long as the bank is insured by the Federal Deposit Insurance Corporation. Credit unions offer the same protection through the National Credit Union Administration. That means your money is safe up to the deposit limits if the bank fails.

Plus, unlike investments such as stocks, CDs are low-risk. You won’t lose your principal deposit or the interest you’ve earned unless you run into early withdrawal penalties -- which you can easily avoid by choosing the right term for your needs.

Factors to weigh when choosing a CD account

A competitive APY is important, but there are other things you should consider when comparing CD accounts:

  • When you’ll need your money: Early withdrawal penalties can reduce your interest earnings. So, be sure to choose a term that fits your savings timeline. You should be comfortable leaving your money in the account for the entire term. Alternatively, you can select a no-penalty CD, although the APY may not be as high as you’d get with a traditional CD of the same term.
  • Minimum deposit requirement: Some CDs require a minimum 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 your options.
  • Fees: Maintenance and other fees can eat into your earnings. Many online banks don’t charge 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: Visit sites like Trustpilot to see what customers are saying about any bank you’re considering. You want a bank that’s 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.

Kelly is an editor for CNET Money focusing on banking. She has over 10 years of experience in personal finance and previously wrote for CBS MoneyWatch covering banking, investing, insurance and home equity products. She is passionate about arming consumers with the tools they need to take control of their financial lives. In her free time, she enjoys binging podcasts, scouring thrift stores for unique home décor and spoiling the heck out of her dogs.
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