CDs
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Karen Bennett
Written by
Marc Wojno
Edited by
May 24, 2024 / 5 min read
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Key takeaways
- Today's leading CD rate across terms is 5.36% APY, offered for a one-year CD.
- In addition to choosing a CD based on APY, be sure to pick a term that suits your financial goals.
- The best rates on most terms are more than triple the national average yields, so it pays to shop around.
Opening a fixed-rate certificate of deposit (CD) with a term of at least one year, today, should give you peace of mind that your savings will continue to earn the same annual percentage yield (APY) should rates begin to retreat later this year. APYs on competitive CDs have been high as of late because they follow the federal funds rate, which is currently at a range of 5.25-5.50 percent — the highest it has been since early 2001. But with the Federal Reserve expected to lower rates later this year, CD APYs could eventually drop, in turn.
As we head into Memorial Day weekend, the leading APY across CD terms stands pat at 5.36 percent. This month, we've seen very few changes to top CD APYs — and rates remain elevated, despite slight decreases in leading APYs since late last year. The benefit of a fixed-rate CD in a falling-rate environment is you'll earn the same yield until the term expires, regardless of what happens with going rates on new CDs.
Check out Bankrate’s table below for the highest APY on CD terms from three months to five years, as well as how much $5,000 would earn for each term.
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% | 1.24% | $65 |
| 6-month | Popular Direct | 5.30% | 1.72% | $131 |
| 9-month | Forbright Bank | 5.30% | N/A | $197 |
| 1-year | CIBC Bank USA | 5.36% | 1.80% | $268 |
| 18-month | TAB Bank | 5.00% | 1.83% | $380 |
| 2-year | TAB Bank | 4.80% | 1.52% | $492 |
| 3-year | First Internet Bank of Indiana | 4.61% | 1.41% | $724 |
| 4-year | First Internet Bank of Indiana | 4.45% | 1.49% | $951 |
| 5-year | First Internet Bank of Indiana | 4.50% | 1.41% | $1,231 |
Note: Annual percentage yields (APYs) shown are as of May 24, 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.
When is opening a CD a good idea?
A CD can be a good place for money you’re saving for future purchases or expenses. For instance, you might put money into a 12-month CD for a vacation you’re planning for next year. Or, you might deposit funds into a five-year CD to make a down payment on a house soon after the CD matures. A benefit of locking in your money is you’ll be less tempted to use it for impulse purchases in the meantime.
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 six 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.
