:max_bytes(150000):strip_icc()/1-17-b6a4fd415e774958b0c0728c678a2e3c.png "Leading Nationwide Offer Now 5.70% on 9 Months")
The best nationally available CD rate dropped today to 5.70% APY, offered by NASA Federal Credit Union on a 9-month term. Since the start of the year, the leading rate had been 5.75% for a term of 7 months. The rate leaders across all other CD terms held their ground, including runner-up rates of 5.66% APY from TotalDirectBank on a 3-month certificate and 5.65% from Hyperion Bank for a 15-month offer.
Key Takeaways
- The overall leading rate in our daily ranking of the best CDs dropped from 5.75% to 5.70% APY today, with seven more options paying at least 5.55% APY.
- Though today’s best CD rates are below October’s historic peak of 6.50%, current CD returns are still high.
- It’s expected that the Fed will begin lowering interest rates sometime in 2024, which could make it a smart time to lock in one of today’s elevated CD rates.
Below you’ll find featured rates available from our partners, followed by details from our complete ranking of the best CDs available nationwide.
CD Rates Are Below Their Peak but Remain High
Certificate of deposit (CD) rates have been grinding downward since climbing to a record peak of 6.50% in October. Since September, we had been tallying the number of nationwide CDs paying at least 5.75% APY, and on Nov. 3, the count surged to a historic peak of 18. But today, the very last of those offers disappeared from the market.
The softening of CD yields is not surprising given the Federal Reserve not only appears likely to be finished raising its benchmark interest rate but could even begin reducing rates sometime this year. Still, it’s important to remember that, while CDs may no longer be paying the peak rates we saw in the fall, the returns you can lock in for months or years down the road are still historically very high.
After the 5.70% leader, another seven offers pay 5.55% to 5.66% APY, on terms ranging from 3 months to 15 months. And in every term, you have multiple options for earning a return in the upper-4% to mid-5% range.
Long-term CDs are also a smart buy right now, as we face the prospect of declining interest rates in 2024 and beyond. The top-paying 2-year certificate offers 5.39% APY, while you can secure 5.23% for a 3-year term. The best rates for 4-year and 5-year CDs are below the 5% mark, but you can still lock in a long-lasting rate as high as 4.89% APY.
While the yields on these longer certificates are lower than certificates with shorter terms, securing one of these returns today means you’ll be able to enjoy it until 2026—or even as long as 2029—when rates on high-yield savings accounts and new CDs will have likely fallen.
You May (or May Not) Earn More With a Jumbo CD
For anyone with a jumbo-sized deposit, you can eke out a bit more with the leading rate on 3-year, 4-year, or 5-year jumbo CDs. But while the best jumbo CD rate is now 5.65% APY on 17 months, available from Hughes Federal Credit Union, you can earn that same rate with a standard 15-month CD.
In fact, jumbo CD rates do not always pay a higher return than standard certificates. Sometimes you can do just as well—or better—with a standard CD. That’s currently the case in five of the eight terms below, so it’s smart to shop both certificate types before making a final decision.
Where Are CD Rates Headed This Year?
The Federal Reserve opted to hold rates steady at a 22-year high last month, the third meeting in a row it’s done so. The Fed has been aggressively combating decades-high inflation since March 2022, raising the federal funds rate with fast and furious hikes that year and then more moderate increases in 2023.
This has created historically favorable conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
Though inflation has cooled significantly from its peak, Fed Chair Jerome Powell has made it clear that the rate-setting committee has not taken future rate hikes off the table—and won’t do so until they feel assured inflation is moving sustainably lower. Still, the Fed’s Dec. 13 dot plot showed a median prediction among committee members of three rate cuts in 2024, for a total reduction of 0.75%.
However, minutes released from the Fed’s Dec. 13 meeting revealed that there is much uncertainty among Fed members on the best timing for lowering rates. And that has been further complicated with two releases of new data. First, the most recent jobs report showed a hotter-than-expected labor market. Then, last week’s inflation report showed an unwelcome acceleration in December. Both of these developments could make it harder for the Fed to pull the trigger on a first rate cut.
The central bank’s decisions on the federal funds rates have significant implications for CD shoppers and other savers, as banks and credit unions base their deposit rate decisions on the Fed’s benchmark rate. As we always caution, trying to predict the Fed’s future moves is an uncertain exercise. But for now, it seems CD rates are likely to continue edging down from their record peaks.
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
How We Find the Best CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD’s minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
Investopedia / Alice Morgan