Certificates of deposit are a low-risk place to store savings you’ve earmarked for a future expense, like a vacation or a new car. You agree not to touch your funds for the CD’s term, and in exchange, the bank locks in your annual percentage yield (APY) for that entire term. And with terms ranging from a few months to several years, chances are there’s a CD out there that fits your timeline.
Locking in an APY is particularly smart in today’s rate environment. Top CDs currently boast APYs up to 5.5%, but experts predict rates will drop in the coming months. So, by opening a CD account now, you can shield your earnings from future rate drops.
Read on to see what today’s top CD rates are and where you can get them.
Key takeaways
- Today’s best CDs offer APYs as high as 5.5% APY.
- Experts predict CD rates will fall in 2024.
- Opening a CD today guarantees you a fixed APY despite 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 | 5.50% | BMO Alto; CommunityWide Federal Credit Union | $135.66 |
| 1 year | 5.50% | Bread Savings; CommunityWide Federal Credit Union | $275.00 |
| 3 years | 4.75% | First Internet Bank of Indiana | $746.88 |
| 5 years | 4.60% | BMO Alto | $1,260.78 |
What the Fed’s decision means for CD rates
CD rates are affected by the federal funds rate, which determines how much it costs banks to borrow and lend money to each other. When the Federal Reserve raises this rate, banks tend to do the same, raising interest rates on consumer products like credit cards, savings accounts and CDs to attract new customers, remain competitive and boost their cash flow.
Starting in March 2022, the Fed regularly increased the federal funds rate to combat inflation, and CD rates soared in response. But with inflation starting to cool, the Fed chose to pause rate hikes at its last four meetings. As a result, CD rates leveled off at the end of 2023, and many banks have been cutting rates across CD terms over the past few months.
Here’s where APYs stand compared to last week:
| Term | CNET average APY | Weekly change* | Average FDIC rate |
| 6 months | 4.92% | +0.61% | 1.51% |
| 1 year | 5.08% | -0.78% | 1.86% |
| 3 years | 4.19% | -0.47% | 1.40% |
| 5 years | 3.98% | -0.25% | 1.41% |
*Weekly percentage increase/decrease from Jan. 22, 2024, to Jan. 29, 2024
The Fed announced it would hold rates steady at its meeting this week, indicating it will continue this path as it attempts to bring inflation back down to its target of 2%. But the promise of future cuts can affect CD rates now.
“Any subtle shifts in the Fed’s communication could impact CD rates in the short term,” said William Bevins, CFP, CFTA. “The consensus remains that rates are on hold for a few more months.”
The Fed will likely begin cutting rates later this year, which means CD rates will continue to decrease. So, by locking in an APY now, you can protect your earnings from future rate drops.
Why CDs are a dependable investment
A fixed APY isn’t the only perk of opening a CD today.
CDs held at banks covered by the Federal Deposit Insurance Corporation or credit unions insured by the National Credit Union Administration are protected by federal deposit insurance. That means your money is safe up to $250,000 per person, per institution if the bank fails. This makes them a low-risk way to grow your savings.
Plus, most banks charge an early withdrawal penalty if you take out money before the CD matures. This can eat away at your earnings and discourage you from tapping into your funds before you need them.
Which CD is right for you?
In addition to a competitive APY, here’s what you should look for when comparing CD accounts:
- How soon you’ll need the funds: Early withdrawal penalties can chip away at your interest earnings. So be sure to choose a term that fits your savings timeline.
- Minimum deposit requirement: Some CDs require a certain amount to open an account -- typically, $500 to $1,000. Others have no minimum deposit requirement. How much money you have to put away can help you narrow down your account options.
- Fees: Fees can erode your balance. Many online banks don’t charge maintenance fees. They have lower overhead costs than banks with physical branches, and they pass these savings down to consumers through higher rates and fewer fees. Still, be sure to read the fine print for any account you’re considering.
- Federal deposit insurance: Confirm that any institution you’re considering is an FDIC or NCUA member to ensure your money is protected in the event of a bank failure.Customer ratings and reviews: Read what customers say about the bank you’re considering on sites like Trustpilot to make sure the bank is responsive, professional and easy
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.
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