Certificates of deposit are a safe place to keep your savings and earn guaranteed interest. In exchange for agreeing to keep your money in the account for a set period of time — known as the term — you can lock in the annual percentage yield, or APY, at the current rate. That means your income will stay the same even if overall rates go down.
“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.
Currently, top CDs offer APYs as high as 5.5%, but these high rates won’t last forever. Rates have fallen in the past few months, and experts expect them to continue falling in the coming months. So, if you’ve been thinking about opening a CD account, now is the time to act.
Read on to see the best CD rates today and where you can get them.
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:
|BMO Alto; CommunityWide Federal Credit Union
|Bread Storage; CommunityWide Federal Credit Union
|First Internet Bank in Indiana
Where is the CD rate headed?
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 inflation, and CD rates rose in response. But as inflation began to cool, the Fed chose to hold off on rate hikes at its last three meetings. As a result, CD rates have leveled off at the end of 2023, and many banks have cut rates on CD terms in recent months.
Here’s where APYs stand compared to last week:
|CNET average APY
|Average FDIC rate
*Weekly percentage increase/decrease from Jan. 22, 2024, to Jan. 29, 2024.
The Fed meets again this week, and experts predict it will announce another stop.
“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.
Why you should open a CD now
A fixed APY isn’t the only perk 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. That means your money is safe up to $250,000 per person, per institution if the bank fails. This makes them a low-risk way to grow your savings.
Additionally, most banks charge an early withdrawal penalty if you withdraw money before the CD matures. This can eat into your income and discourage you from tapping your funds before you need them.
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.
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, Connexus Credit Union.