CDs
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Karen Bennett Karen Bennett
Written by
Marc Wojno Marc Wojno
Edited by
Apr 18, 2024 / 5 min read
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Key takeaways
- The highest CD rate across terms is 5.36% APY on a one-year term.
- Some CDs out-earn high-yield savings accounts, although most CDs charge a fee for early withdrawals.
- The best rates are more than triple the national average yields, so it pays to shop around.
A certificate of deposit (CD) can be a useful tool for earning interest on your funds as you save for your financial goals. Things to consider before opening a CD include the annual percentage yield (APY), how much money you wish to deposit, and whether you’re able to lock in the funds for the duration of the CD’s term.
As of late, the highest APY across CD terms is 5.36 percent, and it’s offered on a one-year CD from CIBC Bank USA. A minimum deposit of $1,000 is required. The highest APY on a three-month CD has increased slightly from 5.25 percent to 5.30 percent. In all, many shorter terms are earning higher yields than longer ones in the current rate environment.
Bankrate monitors the top and average rates every weekday, and you’ll find today’s top CD rates in the table below.
Today's best CD rates by term
| CD term | Institution offering top APY | Highest APY | National average APY | Estimated earnings on $5,000 with top APY |
|---|---|---|---|---|
| 3-month | Popular Direct | 5.30% | 1.20% | $65 |
| 6-month | Popular Direct | 5.30% | 1.68% | $131 |
| 9-month | Forbright Bank | 5.30% | N/A | $197 |
| 1-year | CIBC Bank USA | 5.36% | 1.74% | $268 |
| 18-month | First Internet Bank of Indiana | 5.04% | 1.82% | $383 |
| 2-year | First Internet Bank of Indiana | 4.82% | 1.51% | $494 |
| 3-year | First Internet Bank of Indiana | 4.66% | 1.41% | $732 |
| 4-year | First Internet Bank of Indiana | 4.50% | 1.50% | $963 |
| 5-year | First Internet Bank of Indiana | 4.55% | 1.42% | $1,246 |
Note: Annual percentage yields (APYs) shown are as of April 18, 2024. APYs for some products may vary by region.
N/A: Not available; Bankrate doesn’t track national averages for the 9-month CD term due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.
How to make the most of today’s CD rates
When shopping for the right CD, pay attention to rates across all available terms. You’ll likely find one-year CDs in this rate environment that pay higher yields than longer terms of three, four and five years. A benefit of choosing a shorter-term CD is your funds will be freed up relatively soon for reinvestment if rates continue to rise. Consider a CD ladder if you prefer both locking in some funds for the long term as well as having access to some funds sooner.
What the current rate environment means for CDs
In 2022 and 2023, the Federal Reserve raised its benchmark interest rate a total of 11 times, bringing its current target range to a 23-year high of 5.25-5.50 percent. However, the Fed has left rates unchanged for five straight meetings due to inflation not slowing as quickly as hoped for.
Yields on competitive savings accounts and CDs tend to move in lockstep with the Fed’s interest rate moves. As such, many banks increase their yields when the Fed raises rates, and lower yields when the federal funds rate drops. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have since been decreasing gradually.
Is it still a good time to open a CD? “Even though CD yields have pulled back a bit, you’re still able to lock in yields that are well in excess of inflation and do so for multiple years,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The declines will likely accelerate as we get closer to the Fed beginning to cut interest rates, so there is no sense in waiting.”
CD FAQs
Research methodology
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.
