CD Rates Today, Jan.  29, 2024: Lock in 5.5% APY With These Top Savings Options

CD Rates Today, Jan. 29, 2024: Lock in 5.5% APY With These Top Savings Options

If you’re looking for a safe place to park your money and earn extra interest, a certificate of deposit is worth considering. CDs are a low-risk way to secure a fixed interest rate for a fixed period of time, making them ideal for savers with a specific goal in mind, such as financing. on a vacation or buying a new car.

Hand holding hundreds of dollars green background

Oleksandr Sharkov/Getty Images

“CDs are always worth opening depending on your goals, timeframe and expectations for the term you’re locking up your money,” says Dana Menard, founder of Twin Cities Wealth Strategies.

And now is a better time to open a CD. Top CDs offer annual percentage yields, or APYs, as high as 5.5%, but these rates don’t last forever. Opening a CD now ensures that you’ll continue to enjoy a high APY for the entire term of your CD, even if overall rates drop — which they expect to do in the coming months.

Read on to find out what the best CD rates are today and where you can get them.

Key takeaways

  • CD rates are now as high as 5.5% APY.
  • Rates are likely to increase – reductions are expected throughout 2024.
  • The Fed is expected to hold rates steady this month, so rates will remain high but may see a slight decrease.

Experts recommend comparing rates before opening a CD account to get the best possible APY. Enter your information below to get the best CNET partner rates for your area.

The best CD rates today

Here are some of the top CD rates available today and how much you can make by depositing $5,000 today:

TERMS Maximum APY bank Estimated income
6 months 5.50% BMO Alto; CommunityWide Federal Credit Union $135.66
1 year 5.50% Bread Storage; CommunityWide Federal Credit Union $275.00
3 years 4.75% First Internet Bank in Indiana $746.88
5 years 4.60% High BMO $1,260.78
APYs as of January 29, 2024, based on banks we track at CNET. Earnings are based on APYs and assume interest is compounded annually.

How this week’s Fed meeting will affect CD rates

CD rates are affected by the federal funds rate, which determines how much it costs banks to borrow and lend to each other. When the Federal Reserve raises this rate, banks tend to do the same, raising interest rates on consumer products such as credit cards, savings accounts and CDs to attract new customers, retain competition and improve their cash flow.

Beginning in March 2022, the Fed regularly raised the federal funds rate to combat rampant inflation, and CD rates rose in response. But since inflation has started to cool, the Fed has chosen to hold off on rate hikes for the last three meetings – and CD rates have leveled off, with many banks starting to cut interest rates. CD terms.

Here’s where APYs compared last week:

TERMS CNET average APY Weekly change* Average FDIC rate
6 months 4.94% 0.61% 1.51%
1 year 5.09% -0.78% 1.86%
3 years 4.21% -0.47% 1.40%
5 years 4.00% -0.25% 1.41%
APYs as of January 29, 2024. Based on banks we track at CNET.
*Weekly percentage increase/decrease from Jan. 22, 2024, to Jan. 29, 2024.

The Fed meets again this week, and experts predict it will opt for another pause.

“The Fed is expected to maintain its current interest rate stance in the January 30-31 meeting,” said William Bevins, a certified financial planner. “Any subtle change in Fed communication could affect 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 start cutting rates later this year, which means CD rates will continue to decline. So, by locking in an APY now, you can protect your income from rate drops in the future.

Benefits of opening a CD today

A fixed rate of return (especially if prices fall) is not the only benefit of opening a CD today.

CDs held by banks that are members of the Federal Deposit Insurance Corporation or credit unions insured by the National Credit Union Administration are protected by federal deposit insurance up to $250,000 per person, per institution in the event of bank failure. This makes them a low-risk way to grow your savings.

Additionally, most banks charge a fee if you withdraw money before the CD matures. This can eat into your income and give you pause if you’re thinking of tapping your funds before you need them. And you can set aside the money without worrying about spending it (plus you’ll earn interest).

How to choose the best CD for you

In addition to a competitive APY, here’s what you should look for when comparing CD accounts:

  • How quickly you need the funds: Early withdrawal penalties can wipe out 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. Some have no minimum deposit requirement. How much money you should deposit will help you narrow down your account options.
  • Fee: Charges can destroy your balance. Many online banks do not charge maintenance fees. They have lower overhead costs than banks with physical branches, and they pass these savings on to consumers through higher fees and lower fees. However, be sure to read the fine print for any account you are considering.
  • Federal deposit insurance: Confirm that any institution you are considering is a member of the FDIC or NCUA to ensure your money is protected in the event of a bank failure.
  • Customer ratings and reviews: Read what customers are saying about the bank you’re considering on sites like Trustpilot to make sure the bank is responsive, professional and easy to work with.

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CNET checked 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.

Current banks included in CNET’s weekly CD average 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 and Connexus Credit Union.

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