Yields on certificates of deposit (CDs) remain high, following 11 rate hikes by the Federal Reserve since the spring of 2022.
Two banks are currently paying the highest CD rate of 5.75 percent APY: Forbright Bank offers a nine-month CD, and Limelight Bank offers a one-year CD, both of which earn that top rate. Both of these CDs require a minimum deposit of $1,000.
The guide below lists average rates and competitive ones for various terms, as well as how to find a CD with the best rate.
The top CDs today earn a 5.75 percent APY on nine-month and one-year terms.
Competitive CDs today pay rates several times higher than national averages. They're also exponentially higher than the rock-bottom rates offered by many big banks.
Various CDs with terms of one to three years offer APYs over 5 percent.
Today’s CD rates by term
Institution offering top APY
National average APY
How to find the best CD rates
You’ll often find the best CD rates from online-only banks, such as Synchrony Bank, which don’t have the overhead costs of running branches — and which also may offer competitive rates to draw customers away from traditional brick-and-mortar banks. Credit unions, such as Alliant Credit Union, also commonly offer high rates because their profits go back to members. Yields can vary significantly among banks, so it pays to shop around for the best CD rates.
What to look for in a CD
In addition to a CD’s APY, look for a CD that has a minimum deposit requirement with which you’re comfortable. Depending on the bank, you may be required to deposit between $0 and $10,000 or more. Another factor to consider is the amount you’d be charged for an early withdrawal. While you should only commit funds to a CD that you can afford to part with until the CD matures, it’s still helpful to be familiar with the terms of its early withdrawal penalty.
CDs vs. savings accounts
It’s not hard to find high yields these days on both CDs and savings accounts. A CD can be a good spot for funds you’re able to part with for the full length of the term. Otherwise, the bank will likely charge you an early withdrawal penalty. For this reason, funds you may need for emergencies or living expenses in the meantime should be held in a liquid savings account.
FAQs about CDs
How do CDs work?
A CD is a deposit account that earns a fixed rate of return in exchange for locking in your funds for the entire term. CD terms often range from three months to five years, although it’s possible to find ones with terms shorter or longer than that. A CD can be a good place to stash money for savings goals, such as a down payment on a house or a new car. When choosing the best CD term, consider when you’ll need access to the money.
Who should get a CD?
Because a CD typically comes with an early withdrawal penalty, it’s best to only put money into a CD that you won’t need in the meantime for living expenses or emergencies. Money you may need sooner is best kept in a liquid account, such as a high-yield savings account, which provides access to your funds anytime.
Why are CDs from credit unions called “share certificates”?
Both CDs and share certificates are deposit accounts where your money typically grows at a fixed rate for a set amount of time. The main difference between the two is in the name: CDs are offered from banks, whereas share certificates are offered from credit unions. What’s more, CD earnings are referred to as interest, while share certificate earnings are called dividends.
CDs and share certificates are insured through banks and credit unions, respectively, that are federally insured. For example, banks are insured by the Federal Deposit Insurance Corp. (FDIC), whereas credit unions are insured through the National Credit Union Administration (NCUA). Under such federally insured banks and credit unions, CDs and share certificates are each insured for up to $250,000 per depositor, per insured bank, for each account ownership category.
Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.
In June 2023, Bankrate updated its methodology that determines the national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.