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- PERSONAL FINANCE NEWS
- CD NEWS
KEY TAKEAWAYS
- After a two-week hiatus, previous leader MutualOne Bank returned Friday to the top national CD spot today, re-offering 5.65% APY on a 3-month certificate.
- That leaves Northern Bank Direct as runner-up, although its 5.60% rate is available for a longer 12 months.
- Want to extend your rate lock further? You can snag rates as high as 5.40% for 15 months, up to 5.30% for 2 years, or between 4.70% and 5.00% for 3 to 5 years.
- The best CD rates have been gradually dipping for months, in anticipation of future Fed rate cuts. But recent inflation readings suggest it could be a while before the central bank feels comfortable lowering rates.
Below you'll find featured rates available from our partners, followed by details from our ranking of the best CDs available nationwide.
Lock In 5.30% to 5.65% APY for 3 to 23 Months
The top rate you can earn with a nationally available CD climbed Friday to 5.65% APY. MutualOne Bank renewed the rate after withdrawing it nationally two weeks earlier. But it's a short-term offer, providing only a 3-month rate lock.
That's why you may prefer the next best rate, available from Northern Bank Direct. Its almost-as-high 5.60% APY is offered for a 12-month term.
For a slightly longer duration, you can earn up to 5.40% with the leading 18-month rate. In total, 13 CDs are paying 5.40% APY or better, with terms of 3 to 15 months. For a slightly longer lock, though, you might like Credit Human's offer of 5.30% on a take-your-pick term of 18-23 months.
Longer Terms Will Secure Your Rate to 2027—Or Beyond
Choosing a CD term longer than two years is also a smart option, since it's possible U.S. interest rates could enter a declining period for the next 2-3 years. To lock in a rate that will last far into the future, you can choose a top 3-year CD paying 5.00%, guaranteeing that return until 2027. Or you can opt to secure a rate in the mid-to-high 4% range for as far as 4 or 5 years down the road.
Today's high CD rates are a perfect antidote to stubborn inflation, with rates available in every CD term that far out-earn the current inflation rate of 3.5%. By putting money into one of these top-paying CDs today, you can stay 1 to 2 percentage points ahead of inflation.
CD Rates Are Still Near Record Highs
CD rates have inched lower since they climbed to a historic peak of 6.50% in October. At the start of February, the number of CDs in our daily ranking that paid at least 5.50% APY was 30. Today that count sits at six.
But don't lose sight of how much certificates of deposit (CDs) still pay 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.
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 seven of the eight terms below, so it's always wise to shop both certificate types before making a final decision.
Where Are CD Rates Headed in 2024?
To combat decades-high inflation, the Federal Reserve aggressively hiked the federal funds rate between March 2022 and July 2023, raising the benchmark rate to its highest level in 22 years. That's important to savers because when the fed funds rate rises, banks and credit unions increase the interest rates they're willing to pay on customer deposits.
As a result, this past fall saw 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 rose to an October-November peak that was the highest we've seen in two decades.
But since its last rate hike in July, the Fed has been in a holding pattern. On March 20, the central bank announced it would maintain the fed fund rate at its current level, the fifth meeting in a row it's done so.
That's because inflation has been cooling, allowing the Fed to stop raising interest rates. But further inflation progress has been elusive, putting the central bank in wait-and-see mode as it looks for evidence that inflation is falling enough to justify lowering the federal funds rate.
Unfortunately for those anxious for rate cuts, last week's releases of fresh economic and inflation data did not help the outlook. The March Personal Consumption Index (PCE) came in at 2.7%, which was above expectations and 0.2 percentage points higher than the February rate.
At its March 20 meeting, the median prediction from members of the Fed's rate-setting committee was for three rate reductions this year. But confidence in that prediction has waned dramatically as new data comes to light. According to the CME Group's FedWatch Tool, only 11% of traders currently predict we'll see three cuts by the end of 2024.
Still, it's a reasonable prediction that the Fed will find it appropriate to lower its benchmark rate sometime this year—if not three times. But Fed moves several months into the future are unpredictable, and until more data comes in, it's impossible to say if any 2024 rate cuts will come to fruition.
As a result, CD rates could continue their current plateau. If at some point it becomes clear the Fed is ready to make a first rate cut, that would drive CD rates down more quickly. But it appears that could be months away.
If inflation proves stubborn, or rises, it's not inconceivable the Fed could even opt to raise rates sometime this year—which would buoy CD rates. A Fed hike is not expected at this time, but it's too soon to know what inflation will do in the coming months.
The central bank will hold six more rate-setting meetings in 2024, with the next one scheduled to conclude Wednesday.
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.