:max_bytes(150000):strip_icc()/2-1-9b5cbd2ce0b74d69bdec6fd1f82a37eb.png "Leading Rate Falls in 18-Month and 3-Year Terms")
Key Takeaways
- The top nationally available 18-month rate dropped today from 5.51% to 5.45% APY, available from XCEL Federal Credit Union.
- The leading 3-year rate also fell, from 5.23% to 5.10% APY. The new leader is Lafayette Federal Credit Union.
- The overall leading rate held its ground at 5.75%. That offer comes from Andrews Federal Credit Union on a 6-month term.
- Though APYs have edged down since October’s record peak of 6.50%, CD rates are still historically high—with 30 options paying at least 5.50%.
- The Fed has signaled it is done raising rates—and is likely to cut rates later this year. That makes it a smart time to snag a top-paying CD before rates decline further.
Below you’ll find featured rates available from our partners, followed by details from our complete ranking of the best CDs available nationwide.
The Best CD Rates Are Still Very High
Though certificate of deposit (CD) rates have come down a bit this winter—since climbing to a record 6.50% in late October—today’s top CD rates are still historically high. Unveiled Monday, the current national leader is 5.75%, available from Andrews Federal Credit Union for 6 months.
But leaders in two longer terms fell today. The top 18-month rate had been 5.51% but is now down to 5.45%, available from XCEL Federal Credit Union. Similarly, the 3-year rate dropped today from 5.23% to 5.10% APY. That offer comes from Lafayette Federal Credit Union.
You can still find a total of 30 certificates paying 5.50% or better in our daily ranking of the best nationwide CDs. And returns like these could be worth locking in now—before the Federal Reserve decides to lower the federal funds rate, which will put downward pressure on CD rates. While we don’t know exactly when the Fed will reduce its benchmark rate, the central bank’s Dec. 13 dot plot showed a median prediction among committee members of three rate cuts—totaling 0.75%—sometime during calendar year 2024.
Those looking for a longer term than you can get with the national leader may like the 2-year rate of 5.27% from Pelican State Credit Union. Want to extend your rate lock even further? In addition to the leading 3-year rate of 5.10% APY, the 4-year and 5-year terms offer returns as high as 4.82% and 4.89% APY, respectively.
While the yields on these longer certificates are lower than shorter-term CDs, securing an extended return means you’ll be able to enjoy it until 2026—or even as long as 2029—when it’s likely that rates on high-yield savings accounts and new CDs will have fallen.
Top Bank, Credit Union, and Jumbo CD Rates Today
While the best jumbo CD rate remains 5.65% APY on 17 months, available from Hughes Federal Credit Union, several terms took a hit on the jumbo side as well today. The leading jumbo rate declined in four terms: 6 months, 3 years, 4 years, and 5 years.
Beware that the best jumbo CD rates don’t always pay more than standard certificates. Often, you can do just as well—or better—with a standard CD. That’s the case right now in four of the eight terms below, so it’s always wise to shop both certificate types before making a final decision.
Where Are CD Rates Headed This Year?
The Federal Reserve yesterday announced it is holding rates steady, the fourth meeting in a row it’s done so. To combat decades-high inflation, the Fed aggressively hiked interest rates between March 2022 and July 2023, raising the federal funds rate to its highest level in 22 years.
This in turn created historically favorable conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account. Rates on CDs continued rising to a peak this fall, reaching their highest levels in two decades.
But with inflation cooling and the Fed in a holding pattern since July, many banks and credit unions have slightly lowered their CD rates. And that may continue after yesterday’s Fed announcement. That’s because the central bank’s statement abandoned previous language that future rate hikes were still possible. It now appears clear the Fed’s rate-hike campaign is finished.
This means we have entered a new phase, where the Fed committee is focused on deciding the right timing to pull the trigger on a first rate cut. But Fed Chair Jerome Powell stated yesterday that, though the economy has seen promising progress, inflation is still too high, and the committee therefore won’t discuss implementing a rate cut until it feels assured inflation’s downward trajectory is both sufficient and sustainable.
“Inflation has eased from its highs without a significant increase in unemployment. That is very good news,” said Powell. “But inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain.”
The Fed’s next rate announcement will be made on March 20. During his press conference yesterday, Chair Powell indicated he doesn’t believe a rate cut will come as soon as the first quarter, saying, “I don’t think it’s likely the committee will reach a level of confidence by the time of the March meeting.”
What this means for CD rates is that they are likely to soften further, since it appears confirmed the Fed will make no further increases. But the declines are likely to be gradual, at least until a Fed rate cut appears imminent. Once that seems to be on the horizon, banks and credit unions will likely begin lowering rates more substantially.
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