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Key takeaways
- Today's highest CD rate across terms is 5.25% APY, offered on a three-month term.
- You'll still find APYs of 5% or higher on various CD terms.
- The best rates on most terms are more than triple the national average yields, so it pays to shop around.
A certificate of deposit (CD) can be a useful tool for meeting your savings goals. Whether you’re saving to buy a house, a new car or your dream vacation, a CD allows you to calculate up front exactly how much interest you’ll have earned when the term is up. This is possible due to a CD’s fixed annual percentage yield (APY).
Right now, the leading APY across CD terms is 5.25 percent, and all top rates have held steady since Aug. 14. Prior to that, nine drops in leading rates occurred since the start of August. Top CD rates have been declining slightly as banks anticipate a possible Federal Reserve rate cut at the Fed's September meeting.
Bankrate’s table below shows the highest yields offered on widely available CDs, by term. It also lists national average CD rates and how much you’d earn for each term with a $5,000 investment.
Today's CD rates by term
| CD term | Institution offering top APY | Highest APY | National average APY | Estimated earnings on $5,000 with top APY |
|---|---|---|---|---|
| 3-month | America First Credit Union | 5.25% | 1.26% | $64 |
| 6-month | America First Credit Union | 5.15% | 1.78% | $127 |
| 9-month | Synchrony Bank | 5.15% | N/A | $192 |
| 1-year | First Internet Bank of Indiana | 5.15% | 1.80% | $258 |
| 18-month | LendingClub | 5.00% | 1.88% | $380 |
| 2-year | Bask Bank | 4.75% | 1.54% | $486 |
| 3-year | First Internet Bank of Indiana | 4.45% | 1.43% | $698 |
| 4-year | First Internet Bank of Indiana | 4.29% | 1.49% | $915 |
| 5-year | Schools First Federal Credit Union | 4.35% | 1.44% | $1,186 |
Note: Annual percentage yields (APYs) shown are as of August 22, 2024. APYs for some products may vary by region.
N/A: Not available; Bankrate doesn’t track national averages for the 9-month CD term due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.
What is a no-penalty CD?
Like standard CDs, no-penalty CDs typically earn a fixed APY over a set period of time — although unlike regular CDs, no-penalty CDs don’t charge an early withdrawal penalty if you take out the funds before the term ends. The trade-off for this perk is that you’ll often earn a lower APY than you would with a CD that has an early withdrawal penalty.
What the current rate environment means for CDs
Recent federal funds rate changes: To combat high inflation, the Federal Reserve raised its benchmark interest rate 11 times in 2022 and 2023, before leaving rates unchanged for eight straight meetings. Before the string of rate hikes began in March 2022, the target range was at 0-0.25 percent, and it currently stands at a 23-year high of 5.25-5.50 percent.
What this means for deposit accounts such as CDs: Yields on competitive savings accounts and CDs tend to move in lockstep with the Fed’s interest rate moves. As such, many banks increase their yields when the Fed raises rates, and they lower yields when the federal funds rate drops. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have since been decreasing gradually, as illustrated below.
How inflation factors in
The Fed has held its key benchmark rate steady since July 2023, due to inflation not slowing as quickly as it has in the past. Fed officials’ goal is to bring the annual inflation rate down to 2 percent. While the consumer price index (CPI), a measure of inflation, has decreased significantly from its decades-high annual rate of 9 percent in June 2022, it’s currently at 2.9 percent.
“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” Fed Chair Jerome Powell said in remarks following the Fed’s latest decision not to change rates on July 31.
The current rate of inflation is a significant factor that affects what the Fed decides to do with rates. An increase in the federal funds rate can be good for savers — translating to higher APYs on many CD and savings accounts — while it can be bad for borrowers as interest rates tend to increase on loans.
Is now still a good time to open a new CD?
As of late, top CD rates are declining due, in part, to strong signals from the Fed that it plans to cut interest rates in September, if not sooner, and fears arising from recent market downturns. It's best to take advantage of still-high CD rates now while you still can.
"Now is the time to lock in attractive returns on CDs as the Federal Reserve is poised to begin cutting interest rates,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The top-yielding CDs currently earn in excess of the inflation rate and savers have the ability to lock in that inflation-beating return for multiple years. If you have money you won’t need to touch for a period of time, now is a great time to consider a CD."
CD FAQs
Research methodology
Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.
In June 2023, Bankrate updated its methodology that determines the national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.
