January 12, 2024—Earn 5% Or More – Forbes Advisor

January 12, 2024—Earn 5% Or More – Forbes Advisor

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  • The highest CD rate today is 5.87% APY for a 12-month CD.
  • CD rates from online banks are often twice as high as the national average rate.
  • CD ladders allow you to take advantage of high rates without locking up all your money for a long time.

Currently, the best interest rates on CDs—certificates of deposit—pay up to 5.87%, based on the length of the term of the certificate. Here’s an overview of how CD rates have changed, followed by a guide to today’s top CD rates for different terms.

Related: Compare the Best CD Rates

Highest CD Rates Today

A CD is similar to a savings account, but the interest rate is fixed—not variable. Another big difference is that you usually only earn interest on a CD account if you don’t withdraw the funds during the term. That term can range from a few weeks to several years, depending on the CD you choose.

If you withdraw money from your CD before it “mature” (reaches the end of its term), you will likely be hit with significant penalties in the form of reduced interest. For example, you could lose six months worth of interest if you withdraw money from a one-year CD before the end of 12 months.

If you’re interested in accumulating the highest amount of interest possible, consider long-term CDs, which historically have the highest APY. But again, long-term CDs are only an option if you’re willing to stash away some money that you won’t touch for years.

Generally, CDs with longer terms carry more severe withdrawal penalties than short-term CDs. For example, it’s common to lose a full year’s worth of interest if you transfer funds from a five-year CD account before the term ends. Therefore, it is important to familiarize yourself with the CD issuer’s penalties before you open your account.

3-Month CD Rates Today

For short-term savings goals, three-month CDs may make sense. The current average rate on a three-month CD sits at 1.22%, but the highest rate is 5.83%. Last week, three-month CDs gained 1.22% on average.

6-Month CD Rates Today

If you want a CD with a shorter term than one year, the best current rate on a six-month CD is 5.84%. That compares to 5.84% a week ago. The current average APY for a six-month CD is 1.68%, compared to 1.66% last week at this time.

The APY gives a more accurate view of the annual interest you’ll earn on a CD because it factors in compound interest. That is the interest you earn not only on your deposit (or principal) but also on the account interest.

Current 1-Year CD Rates

The highest interest rate currently offered on a one-year CD—one of the most popular CD terms—is 5.87%. If you find a 12-month CD with a rate in that neighborhood, you’ve found a good deal. A week ago, the best rate was the same.

The average APY, or annual percentage yield, on a one-year CD is now 1.88%, up from 1.87% a week ago.

Today’s 2-Year CD Rates

If you can hold for two years, a 24-month CD is now being offered at interest rates as high as 5.35%. The highest rate last week at this time was the same 5.35%. Two-year CDs now have an average APY of 1.66%. That’s the same as last week this time.

Today’s 3-Year CD Rates

CDs with longer terms tend to have some of the most attractive interest rates and APYs—if you’re willing to keep your money for several years.

Over the past week, the highest rate on a three-year CD was 5.50%, so you’ll want to shop around for that rate or something close to it.

Current 5-Year CD Rates

On a five-year CD, the top rate today is 5.20%. APYs averaged 1.58%, the same as this time last week.

The longer the term, the heavier the early withdrawal penalty. It’s not unusual to lose a full year’s worth of interest or more if you open a five-year CD too soon. Make sure you understand the penalty before you make your investment.

Jumbo CD Rates Today

The best jumbo CD rate today is 5.87% for a 12-month term. The average APY for this CD category is currently 1.65%, compared to 1.63% last week.

Most jumbo CDs require a minimum deposit of $100,000—and some require as much as $250,000. However, there is no universally agreed upon definition of what qualifies as a “jumbo” CD. Some banks and credit unions slap a “jumbo” label on CDs you can open with $50,000, $25,000 or less.

Other Maximum CD Rates By Term

Related: CD Interest Rate Prediction: How Much Can They Earn?

How CDs Work

To open a CD, you start by creating an account at a bank and making a one-time, initial payment, known as principal. Many banks require you to deposit a minimum amount of money—which can be anywhere from hundreds to thousands of dollars—to open a CD. At credit unions, CDs are often called share certificates.

Once you have deposited your principal, the timer on your investment will start, and you will start earning interest. The bank or credit union will give you monthly or quarterly statements that show how much interest you have accrued.

Resist the urge to access your CD before the end of the term because early withdrawal penalties can quickly eat away at your interest. In some cases, you may face stiff early withdrawal penalties that eat into your principal.

Are CDs good?

CDs typically pay higher interest than other savings vehicles, even the best high-yield savings accounts and money market accounts. And while they may not offer the kind of impressive returns possible with stocks, CDs beat out more attention-grabbing investments in one respect: They’re one of the safest places to put your money.

Investors lost millions in the 2022 crypto crash, and putting your money in the stock market, real estate or gold and other commodities can also be risky. But when you buy a certificate of deposit or credit union share certificate from a federally insured financial institution, you can sleep easy with the knowledge that your investment is protected.

The FDIC gives you up to $250,000 in coverage if the bank that issued your CD fails. For share certificates purchased from federal credit unions and most state-chartered credit unions, NCUA insures your money up to the same limit.

“Traditional brick-and-mortar banks have higher operating costs than online-only banks. That’s why online banks are often able to offer more attractive APYs on CDs -they have lower overhead costs, so they can pay higher interest rates to customers.

Related: CD Interest Rate Prediction: How Much Can They Earn?


Curinos determines average prices for certificates of deposit (CDs) by focusing on specific CDs and excluding others. Certain types, such as promotional offers, relationship-based rates, private, youth, senior, student/minor, affinity, bump-up, no-penalty, callable, variable, step-up , auto transfer, club, gift, grandfathered, internet-only and IRA CDs are not considered in the calculation.

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