Annual percentage yields (APYs) on certificates of deposit (CDs) remain high, since the Federal Reserve has hiked rates 11 times starting in the spring of 2022.
Forbright Bank currently offers the highest-paying CD, which carries a term of nine months and earns a 5.75 percent APY. This CD requires a $1,000 minimum deposit.
Popular Direct offers a similar yield on its one-year CD, which earns an APY of 5.67 percent, although it requires a higher minimum deposit of $10,000.
The guide below lists average rates and competitive ones for various terms, as well as how to find a CD with the best rate.
Today's top CD earns an APY of 5.75 percent on a nine-month term.
Such competitive CDs earn rates several times greater than national averages.
Top CDs of many terms are earning APYs of more than 5 percent, while some national average rates are more than double what they were a year ago.
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.
Featured CD of the day
BrioDirect is currently offering a promotional CD to new customers that has a term of one year and a competitive 5.35 percent APY. A relatively manageable amount of $500 is required to open the CD, which is the same amount needed to open all BrioDirect CDs (which range in terms from 30 days to five years). BrioDirect also offers savings and money market accounts that earn competitive rates of return.
When is a one-year CD a good idea?
A one-year CD, such as the one from BrioDirect featured above, can be ideal when you’re saving for relatively short-term financial goals. Right now, for example, you could use a one-year CD to help you save for a vacation you’re planning for in late 2024 or sometime in 2025. Perhaps you’d like to save for a car in a year’s time. A one-year CD with an APY above 5 percent will help you get there. To avoid an early withdrawal penalty, however, only devote money to a CD that you can afford to lock up for the entire term.
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.