Certificates of deposit are a safe, easy way to set aside money for a goal with a specific timeline, like a vacation or a wedding. In exchange for agreeing to keep your money in the account until the term ends, you can lock in your annual percentage yield (APY) for that entire term. And with terms ranging from a few months to several years, it’s easy to find a CD that fits your needs.
“CDs are always worth opening depending upon your goals, timeframe and expectation for the term you’re locking up your money for,” said Dana Menard, CFP, founder and lead financial planner at Twin Cities Wealth Strategies.
In today’s rate environment, the ability to secure a fixed APY is particularly attractive. Today’s best CDs offer APYs as high as 5.5%, but experts expect rates will go down in the coming months. So, by opening a CD now, you can protect your earnings against future rate drops and get more for your money than you might with a savings account, which has a variable rate.
Read on to see today’s best CD rates available right now and where you can find them.
Key takeaways
- You can earn up to 5.5% APY with today’s top CDs.
- Experts expect rates will fall in the coming months.
- Opening a CD today lets you lock in a still-high rate for the entire term.
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 |
How the Fed impacts 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 three 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 | 4.93% | +0.61% | 1.51% |
| 1 year | 5.09% | -0.78% | 1.86% |
| 3 years | 4.20% | -0.47% | 1.40% |
| 5 years | 4.00% | -0.25% | 1.41% |
*Weekly percentage increase/decrease from Jan. 22, 2024, to Jan. 29, 2024.
The Fed is meeting again this week, and experts predict it will announce another pause.
“The Fed is expected to maintain its current interest rate stance at the Jan. 30-31 meeting,” said William Bevins, CFP, CFTA. “Any subtle shifts in the Fed’s communication could impact CD rates in the short term. The consensus remains that rates are on hold for a few more months.”
That said, 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 you shouldn’t wait to open a CD
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.
How to compare CD accounts
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.
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