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Best CD Rates Today, May 31, 2024: Now’s the Time to Take Advantage of High APYs

Don't sleep on APYs up to 5.35%. They won't be around forever.

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Key takeaways

  • Today’s best CDs offer APYs as high as 5.35%.
  • Experts believe the Federal Reserve will cut rates later this year.
  • Your CD rate is fixed when you open the account, so the sooner you open a CD, the higher your earning potential could be.

The clock may be ticking on high rates on certificates of deposit. Top CDs currently offer annual percentage yields, or APYs, up to 5.35% -- more than three times the national average for certain terms.

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But APYs have been gradually falling for months, despite six consecutive rate pauses by the Federal Reserve. And with experts predicting the Fed will cut rates later this year, further drops seem likely. Your APY is set when you open a CD, so your returns stay the same even if overall rates drop. By opening an account now, you can lock in today’s great APYs and protect your earning potential.

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 years4.70%MYSB Direct$738.65
5 years4.80%BMO Alto$1,320.86
APYs as of May 31, 2024, based on the banks we track at CNET. Earnings are based on APYs and assume interest is compounded annually.

Where will CD rates go next?

Earlier this year, experts predicted three rate cuts by the end of 2024. But with inflation remaining stubbornly high, the Fed opted to pause rates for the sixth time in a row at its last Federal Open Market Committee meeting. As a result, some experts now believe rate hikes are more likely than rate cuts in the coming months. Those who believe rate cuts are still possible this year say 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, founder of 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 interest 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 the Fed’s decisions affect CD rates

The Fed doesn’t directly set CD interest 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 remain competitive and boost their cash flow.

In March 2022, the Fed began steadily raising the federal funds rate to fight 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. With experts predicting rate cuts for mid-to-late 2024, CD rates leveled off and began gradually 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%No change1.79%
1 year4.99%No change1.80%
3 years4.12%-0.24%1.42%
5 years3.95%No change1.40%
APYs as of May 31, 2024. Based on the banks we track at CNET.
*Weekly percentage increase/decrease from May 20, 2024, to May 28, 2024.

Top reasons to open 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.

How to choose the best 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. “Different CDs have different maturity dates, so you’ll want to make sure the CD matures before you’ll need the money,” said Keith Spencer, CFP, founder and financial planner at Spencer Financial Planning, LLC. “For example, if you’re planning on purchasing a car a year from now and would like to put the money in a CD in the meantime, you’ll want to choose a CD with a maturity date of one year or less.” 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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