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- PERSONAL FINANCE NEWS
- CD NEWS
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KEY TAKEAWAYS
- The best CD rates are holding their ground, with 15 nationally available certificates offering 5.40% APY or more.
- The national leader is Newtek Bank's 5.55% APY for a 6-month term.
- The best CD rates have been gradually inching lower this year. But they'll probably fall faster once the Fed appears ready to make a rate cut.
- Strong economic signals indicate a Fed rate decrease could be a ways off, but multiple cuts are still expected this year.
Below you'll find featured rates available from our partners, followed by details from our ranking of the best CDs available nationwide.
Lock In 5.40% to 5.55% APY for 3 to 12 Months
The highest CD returns continue to be available on short-term certificates. A total of 15 different CDs, ranging from 3 months to 12 months, are paying 5.40% APY or more. The highest nationwide rate on a standard certificate remains Newtek Bank's 6-month CD paying 5.55% APY. An additional four CDs in the 5-7 month range offer 5.50%.
For those wanting to stretch their rate lock further down the road, four 1-year CDs currently pay a 5.40% rate. That lets you guarantee your return until the spring of 2025.
Longer Terms Secure Your Rate to 2026 and Beyond
Want to guarantee your CD rate even longer? You can choose a top 2-year CD paying 5.20%, locking it up until 2026. Or secure a 5.00% rate as far as 2027. Though that's the longest term offering a rate of 5% or better, you can alternatively opt to guarantee a high-4% rate for as long as 4 to 5 years into the future.
CD Rates Are Still Near Historic Highs
Certificate of deposit (CD) rates have softened since climbing to a record high of 6.50% in October. At the start of February, the number of CDs in our daily ranking that paid a least 5.50% APY was 30. This week, that count is down to five.
But don't lose sight of how high CD returns still are relative to the past 20 years. Locking in a yield in the 4% to 5% range for a year or more down the road is still a great earning opportunity.
Also keep in mind that snagging the absolute highest APY isn't the only way to win with today's CDs. Since CD rates could fall quite substantially in 2024 and 2025, locking in a long-term rate now— before rates move lower—can be a smart move.
Jumbo Deposits Can Provide More CD Options
The top two jumbo CDs let you earn more than you can with a standard CD. State Bank of Texas is paying 5.50% APY on a 12-month certificate, while My eBanc offers 5.49% APY for 6 months.
But beware that the best jumbo CD rates don't always pay more than standard certificates. Often, you can do just as well—or better—with a standard CD. That's the case right now in every term below but two, so it's always wise to shop both certificate types before making a final decision.
Where Are CD Rates Headed in 2024?
CD rates are expected to fall further this year. The question is when exactly. The answer depends on moves by the Federal Reserve, which controls the federal funds rate, which in turn heavily influences CD rates.
The Fed announced on March 20 that it is maintaining the fed fund rate at its current level, the fifth meeting in a row it's done so. To combat decades-high inflation, the Fed had aggressively hiked interest rates between March 2022 and July 2023, raising the fed funds rate to its highest level in 22 years.
This created historically favorable conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account. Rates on CDs continued rising to a peak this fall, reaching their highest levels in two decades.
Inflation has since been cooling, allowing the Fed to stop raising interest rates. But it's now in wait-and-see mode, looking for evidence that inflation has fallen enough to justify lowering the federal funds rate. According to the Fed's recent statement, that first rate cut could still be a ways off.
"The Committee does not expect it will be appropriate to reduce the (fed funds rate) until it has gained greater confidence that inflation is moving sustainably toward 2 percent," the central bank said in the statement, using language identical to its previous statement in January.
Federal Reserve Gov. Chris Waller said last week that inflation and job gains data from this quarter reinforced his earlier view that "there is no rush" to cut interest rates. That was before economic indicators were released later in the week showed that GDP growth in the fourth quarter of last year was higher than expected, and the number of people filing for unemployment fell in the week ending March 23. That's just more data backing up the argument that the economy is running strong and a rate cut isn't needed right away.
At its March 20 meeting, the median prediction from members of the Fed's rate-setting committee was for three rate reductions this year. Financial markets still currently agree, betting on at least three rate decreases this calendar year, according to the CME Group's FedWatch Tool. A majority of traders believe the first cut will arrive in June or July.
Of course, what markets predict today and what the Fed ultimately does may or may not align. But given an assumption of a reduced fed funds rate sometime this year, CD rates are likely to continue drifting lower. Then once it appears a Fed rate decrease is actually forthcoming, CD rate declines can be expected to accelerate.
The central bank will hold six more rate-setting meetings in 2024, with the next one scheduled for April 30 through May 1.
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 Best CD Rates
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.
Correction—April 3, 2024: This article has been corrected to exclude a jumbo CD from Hughes Federal Credit Union that is no longer available.