CDs
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Sheiresa McRae Ngo
Written by
Marc Wojno
Edited by
Jul 01, 2024 / 5 min read
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Key takeaways
- Today's top CD rate across terms is 5.36% APY, offered on a one-year term.
- You'll find APYs of 5% or better on many CD terms.
- Competitive CDs are earning at least three times the national average rates for most terms.
A certificate of deposit (CD) can be a useful tool for meeting your savings goals. Whether you’re saving to buy a house, a new car or your dream vacation, a CD allows you to calculate up front exactly how much interest you’ll have earned when the term is up. This is possible due to a CD’s fixed annual percentage yield (APY).
As of late, the highest APY across CD terms is 5.36 percent, which is offered on a one-year CD from CIBC Bank, requiring a $1,000 minimum deposit. You’ll find that many shorter terms are earning higher yields than longer ones in the current rate environment.
Bankrate’s table below shows the highest yields offered on widely available CDs by term. It also lists national average CD rates and how much you’d earn for each term with a $5,000 investment.
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 | America First Credit Union | 5.25% | 1.26% | $64 |
| 6-month | Bask Bank | 5.35% | 1.74% | $132 |
| 9-month | Forbright Bank | 5.30% | N/A | $197 |
| 1-year | CIBC Bank USA | 5.36% | 1.81% | $268 |
| 18-month | Bask Bank | 5.00% | 1.91% | $380 |
| 2-year | First Internet Bank of Indiana | 4.76% | 1.54% | $487 |
| 3-year | First Internet Bank of Indiana | 4.61% | 1.42% | $724 |
| 4-year | First Internet Bank of Indiana | 4.45% | 1.49% | $951 |
| 5-year | First Internet Bank of Indiana | 4.50% | 1.43% | $1,231 |
Note: Annual percentage yields (APYs) shown are as of July 1, 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.
What is a no-penalty CD?
Like standard CDs, no-penalty CDs typically earn a fixed APY over a set period of time — although unlike regular CDs, no-penalty CDs don’t charge an early withdrawal penalty if you take out the funds before the term ends. The trade-off for this perk is that you’ll often earn a lower APY than you would with a CD that has an early withdrawal penalty.
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 seven straight meetings, due to inflation not slowing as quickly as it has in the past.
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 they 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.
