If you want to earn a guaranteed return on your savings no matter what happens in the economy, a certificate of deposit can be a great option. CDs lock in your rate when you open the account, and some of the best CDs right now boast annual percentage yields of 5.5% or above. That’s about three times higher than the FDIC’s top national averages.
But high rates won’t last forever – some are already on the way down. And experts expect this trend to continue in the coming months.
So, if you’ve been considering opening a CD, you may want to act now before your earning potential 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’s a look at some of the best CD rates available right now and how much you could earn if you deposited $5,000 today.
|Term||Highest APY*||Bank||Estimated earnings|
|6 months||5.55%||Bask Bank||$136.88|
|1 year||5.65%||BMO Alto; Forbright; LendingClub||$290.00|
|3 years||5.10%||BMO Alto||$804.68|
|5 years||5.25%||BMO Alto||$1,457.74|
How long will CD rates stay high?
The federal funds rate, which determines how much banks charge to lend and borrow money, influences CD and savings account rates. When the Federal Reserve periodically adjusts this rate to stimulate the economy, banks tend to adjust their rates accordingly.
The Fed has regularly raised rates since March 2022 to combat persistently high inflation, and CD rates have steadily risen as a result. And while the central bank has chosen to pause rate hikes during its last two meetings, CD rates remain high.
Here’s how rates for the top CDs we track at CNET currently compare to average national rates:
|Term||CNET Average APY*||Average FDIC rate|
That said, many experts expect CD rates will begin falling mid-2024 -- and potentially sooner depending on the Fed’s next move. That makes now a great time to open a CD and lock in an APY while rates are still elevated. Just last week, for example, Rising Bank lowered its one-year CD by 0.10%, and CFG Bank dropped the rates on its one-, three- and five-year CDs by 0.15% each.
Promotional CD rates could boost your earnings
While we track top banks to compile our CNET average, there are some banks offering even higher rates for less common CD terms. But they may also come with stricter requirements.
For example, CNET expert review board member Bernadette Joy recently locked in a 6.15% APY on an 11-month CD from Truliant Federal Credit Union. However, it required a $5,000 minimum deposit, which might be out of reach for some savers. Many of the CDs on our list here require a minimum deposit of $1,000 or less.
You can earn even more with a special 12-month share certificate -- a savings option similar to a CD that’s offered by credit unions -- from Bayer Heritage Federal Credit Union. Open this certificate by Nov. 30, 2023, and you’ll earn 6.183%. However, you must be a member of the credit union to qualify, and membership is limited to specific areas in Ohio, South Carolina, Texas and West Virginia.
If you do your homework, you may be able to find a CD you’re eligible for with a 6% APY or higher. But it’s essential to read the fine print for any CD you’re considering to make sure the rate is worth any potential trade-offs. If the term doesn’t fit your savings timeline, for instance, you may find yourself needing to take out funds before the term is up, incurring an early withdrawal penalty that can eat into your earnings.
How to choose the right CD for you
When weighing your CD options, APYs are only one factor you should consider. You should also bear in mind:
- When you’ll need the funds: Most banks charge an early withdrawal penalty if you pull out your money before the CD term is up. This can chip away at your interest earnings. So, be sure to choose a term that fits your savings needs.
- Minimum deposit: Some CDs require a certain amount to open an account – typically, $500 to $1,000 -- while others have no minimum deposit requirement. Depending on how much money you have to put into a CD, this can influence which account is best for you.
- Monthly fees: Many online banks don’t charge maintenance fees. They have lower overhead costs than banks with physical branches, and they’re able to pass these savings down to consumers in the form of higher rates and fewer fees. Still, be sure to read the fine print for any account you’re considering as fees can erode your balance.
- Federal deposit insurance: Accounts with FDIC-insured banks or NCUA-insured credit unions are protected up to $250,000 per person, per institution if the bank fails. Be sure the institution you’re considering is an FDIC or NCUA member to ensure your money is safe.
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.