CD Rates Today, Jan. 25, 2024: Short-Term CDs Offer the Best Rates

CD rates may not be as high as they’ve been the past two years, but there’s still time to secure a great one. After peaking at the end of 2023, annual percentage yields (or APYs) have gradually fallen for CD in recent months, but they remain elevated.

Today’s best CDs offer up to 5.5% APY -- more than three times the national average for common CD terms. And with rates expected to fall later this year, that makes now a great time to open a CD and protect your earnings. Your rate is locked in when you open the account, so your earnings stay the same regardless of future rate drops.

Read on to see what today’s top CD rates are and where you can get them.

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 currently available and how much you could earn by depositing $5,000 right now:

Why short-term CDs currently offer the best 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, as well as savings accounts and CDs. But banks also raise savings rates 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 rampant inflation, and CD rates skyrocketed in response. But since inflation has begun cooling, the Fed chose to pause rate hikes at its last three meetings -- and CD rates leveled off. The last months of 2023 saw many banks begin lowering rates across CD terms.

Here’s where APYs are compared to last week:

Usually, long-term CDs offer the highest savings rates, since you’re agreeing to lock your money up for a longer period. But right now short-term CDs -- those with terms of up to one year -- are offering the best rates.

“I am finding that CD rates between nine and 12 months are offering the best rates, and I think that’s a great term for most people as it’s hard to plan much farther out than that,” said Bernadette Joy, a personal finance coach and CNET Financial Review Board member.

The Fed’s next meeting is Jan. 30-31, and experts expect the central bank will opt for another rate hike pause. So, there’s still time to lock in a high CD rate, but you shouldn’t wait too long. Experts expect the Fed will begin lowering rates in mid to late 2024. This is one reason why banks may still be offering higher rates for short-term CDs than long-term ones -- banks may be hesitant to lock customers into a high rate for a longer period, knowing rates are likely to drop in the coming months.

Reasons why you should open a CD today

A fixed rate of return (especially if rates are falling) isn’t the only perk of opening a CD now. 

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 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 a fee if you withdraw money before the CD matures. This can eat away at your earnings and give you pause if you’re thinking of tapping your funds before you need them. And you can set aside money without worrying about spending it (plus you’ll still earn interest).

Things to look for in a CD account

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 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.