Certificate of deposit rates remain high after 11 rate hikes and eight consecutive rate pauses by the Federal Reserve, making now a great time to lock in a competitive annual percentage yield, or APY.
But after months of holding rates relatively stable, some banks have started to quietly drop APYs across CD terms in anticipation of rate cuts. And with many experts forecasting rate cuts as soon as September, this downward trend is likely to continue.
So, if you have money earmarked for a particular savings goal, putting those funds in a CD will protect your earnings from rate cuts when they do happen. And if a six-month CD works well with your current savings goals, Bask Bank and CommunityWide Federal Credit Union have the highest CD rates right now. Here’s what you should know about them -- and some other great CDs to consider.
What’s the highest CD rate right now?
CommunityWide Federal Union and Bask Bank’s six-month CD currently have the highest rate available, at 5.30% APY. You need to deposit at least $1,000 to get started with either account, but we like that neither bank charges any monthly fees. Both institutions consistently make our list of the best online banks and best online credit unions. But keep in mind that APYs represent the yield you’ll earn for a year, so CD terms shorter than 12 months typically have lower returns.
If you don’t have $1,000 to put away, CFG Bank offers a competitive 5.00% APY on its one-year CD and MYSB Direct offers 4.45% APY on its three-year CD. Both require a $500 initial deposit. The five-year CD from BMO Alto doesn’t have a minimum deposit requirement, so you can earn its 4.45% APY on any amount.
Most CDs charge an early withdrawal penalty if you take out funds before the CD term ends. This fee is typically based on a percentage of the interest you’ve accrued. Some of the banks we track at CNET charge anywhere from three to six months of interest.
How much you could earn with today’s top CDs if you deposit $1,000
Here’s how much you’ll earn with today’s top CD rates, assuming you deposit $1,000. Depending on your CD’s initial deposit requirement, you can start with a lower (or higher) initial deposit. But keep in mind that most CDs require a one-time deposit, meaning you won’t be able to make additional contributions later on. If you need the flexibility to deposit and withdraw money regularly, you might consider a high-yield savings account.
Right now, short-term CDs have higher APYs than most longterm CDs, meaning you can earn a decent return for locking up your money for a short time (one year or less). But the right CD term for you depends on your financial situation and savings goals.
| Term | Highest APY | Bank | Interest earned | Balance at maturity |
| 6 months | 5.30% | Bask Bank, CommunityWideFederal Credit Union | $26.16 | $1,026.16 |
| 1 year | 5.00% | CFG Bank | $50.00 | $1,050.00 |
| 3 years | 4.45% | MYSB Direct | $139.53 | $1,139.53 |
| 5 years | 4.45% | BMO Alto | $243.20 | $1,243.20 |
What to consider when choosing a CD
Before you commit to a CD, you should consider more than just the APY. While choosing a CD with a competitive rate is important, there are other factors you should consider when comparing CD accounts:
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- When you’ll need your money: For a CD to work well with your savings goals, you need to think about how long you can comfortably leave your money in the account. If you need to withdraw money before the term ends, you’ll typically pay an early withdrawal penalty that can equal a few weeks or months of interest. This penalty can eat away at your interest earnings, so make sure you pick a CD term that fits your savings timeline.
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- Minimum deposit requirements: Some CDs require a minimum deposit that can range from $500 to over $10,000. However, not all banks require a minimum deposit. How much money you’re prepared to set aside can help you choose which CD is best for you.
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- Fees: Most online banks don’t charge monthly maintenance fees because they have fewer overhead costs than brick-and-mortar banks. However, make sure you always read the fine print before committing to a CD. You don’t want to be locked in and then hit with a surprise fee.
- Federal deposit insurance: Look for CDs at banks insured by the Federal Deposit Insurance Corporation and credit unions insured by the National Credit Union Administration. CDs at these institutions are protected for up to $250,000 per person, per account.
- Customer ratings: It’s important to read online customer service reviews and customer satisfaction ratings to help you get a sense of what it will be like to work with a bank or credit union.
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