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- PERSONAL FINANCE NEWS
- CD NEWS
Though the number of CDs paying at least 5.65% dropped by one today, the best CD rates in every term has held steady—as did the leading overall rate of 5.75% APY.
Currently wearing the national rate crown is INOVA Federal Credit Union, which is paying 5.75% APY on an 8-month certificate. After that, the next-best rate of 5.70% is offered by two credit unions—Air Force Federal Credit Union and NASA Federal Credit Union—with terms of 7 and 9 months, respectively. Five more CDs are paying 5.65% or 5.66% APY.
KEY TAKEAWAYS
- The overall leading rate in our daily ranking of the best CDs held firm today at 5.75%, which is available for an 8-month term.
- Seven more CDs are paying rates between 5.65% and 5.70% APY.
- Though today's best rates are below October's historic peak of 6.50%, current CD returns are still historically very high.
- The top rate on a jumbo CD dropped today from 5.77% to 5.65%, offered for 17 months.
- Interest rates will most likely decline in 2024, with CD rates expected to follow suit.
Below you'll find featured rates available from our partners, followed by details from our complete ranking of the best CDs available nationwide.
For the past several months, we've counted the number of CDs paying at least 5.75% APY. On Nov. 3, the number surged to a historic peak of 18. But as we kick off 2024, we're left with just one CD paying a rate that high. Fortunately, there are another seven CDs that offer at least 5.65%.
The most attractive rates continue to be available in terms of three to 18 months, but rates are still historically high in the longer terms as well. The top-paying 2-year certificate offers 5.39% APY, while you can secure 5.23% for a 3-year term. And in the 4-year and 5-year terms, you can lock in a long-lasting rate as high as 5.00% APY.
Though the yields on these longer certificates are lower than certificates with shorter terms, securing one of today's record rates for as long as possible could be a smart move, as the current expectation is that interest rates will be falling over the next 2 to 3 years.
FAST FACT
When asked in December if they were choosing more or less of certain investments during recent market events, 28% of Googlawi readers said they were leaning into CDs—just one percentage point behind the leading choice of money market funds. Additionally, 11% of readers said they would open a CD if they had an extra $10,000 to invest, in third place behind individual stocks and ETFs.
For anyone with a jumbo-sized deposit, two leading offers evaporated from the market today. Instead of earning 5.77% APY with a $50,000 deposit on 6 or 12 months, the best jumbo CD rate is now 5.65% APY on 17 months, available from Hughes Federal Credit Union. The minimum deposit for jumbo CDs at Hughes is $99,000.
Note that jumbo CDs don't always pay a higher return than standard certificates. Sometimes you can do just as well—or better—with a standard CD. That's currently the case in seven of the eight terms above, so it's smart to shop both certificate types before making a final decision.
Where Are CD Rates Headed Next Year?
The Federal Reserve opted to hold rates steady at a 22-year high last month, the third meeting in a row it's done so. The Fed has been aggressively combating decades-high inflation since March of last year, raising the federal funds rate with fast and furious hikes in 2022 and then more moderate increases in 2023.
This has created historically favorable conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
Inflation has cooled significantly in recent months, including a mild drop in November. And though Chair Powell said the rate-setting committee is not taking the possibility of future rate hikes off the table, he also said in his press conference that Fed members have started to discuss lowering rates.
The Fed's Dec. 13 dot plot shows that, at that time, no members of the rate-setting committee were predicting another rate increase in 2024. Instead, the median expectation is for three rate cuts in 2024, for a total drop of 0.75%.
However, the minutes released today from the Fed's Dec. 13 meeting reveal that there is a lot of uncertainty among different Fed members on when it will be the right time to lower rates—and even if another rate hike will be needed before then. The Fed's next rate-setting meeting will conclude on Jan. 31.
What the Fed decides has significant implications for CD shoppers and other savers, as banks and credit unions base their deposit rate decisions on the fed funds rate. As we always caution, trying to predict the Fed's future rate moves is an uncertain exercise. But for the time being, it seems CD rates are likely to continue edging down from their record peaks.
Note that the "top rates" quoted here are the highest nationally available rates Googlawi has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
How We Find the Top CD Rates Today
Every business day, Googlawi tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD's minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
Googlawi / Alice Morgan