*Indicates the highest APY offered in each term. To view our lists of the top-paying CDs across terms for bank, credit union, and jumbo certificates, click on the column headers above.
Despite the suggestion that a larger deposit entitles you to a higher return, that’s not always the case for jumbo certificate rates, which often pay less than standard CDs. Though today’s best jumbo offers, which typically require a deposit of $100,000 or more, beat the best standard rates in six CD terms, you can do just as well or better in the other two terms with a standard CD. So always be sure to shop every certificate type before making a final decision.
Will CD Rates Go Up in 2023?
This year has already seen CD rates hit record levels, but it’s possible they could inch higher still. That’s because the Federal Reserve has left the door open to more increases in the federal funds rate, which strongly influences CD rates.
The Fed bumped the fed funds rate up by 0.25% at its meeting July 26, and doesn’t meet again until September 20. Fed Chair Jerome Powell could offer more clues regarding the trajectory of monetary policy at the Jackson Hole Economic Symposium later this week, where he is scheduled to speak Friday.
The Fed has been aggressively combating decades-high inflation since March of last year, with 11 hikes to its benchmark rate over the past 12 meetings. The July bump took the cumulative increase to 5.25%, raising the fed funds rate to its highest level since 2001. That’s created historic conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
The Fed’s official July announcement provided no strong indications on whether it will raise its benchmark rate even higher this year. The written statement simply reiterated the Fed’s commitment to bring inflation back down to its target level of 2%.
In his post-announcement press conference, Chair Powell indicated that the rate-setting committee has not made any decisions yet on whether to raise rates again in 2023—or if so, what timing or pace any increases would follow. He specifically stated that a hike and a pause were each possibilities at the next meeting, scheduled for September 19-20.
Various Fed governors have since made public remarks about their expectations on whether the committee will raise or hold rates going forward. Earlier this month, two emphasized the need to watch the upcoming data and decide on a course meeting-by-meeting—including the possibility of implementing another increase—while a third indicated that unless something unexpected crops up in the data, he foresees rates being held without any further increases.
A fourth committee member spoke last week and indicated that though the central bank can now take some time to allow more data to come in, he’s not ready to declare an end to the Fed’s rate hikes. He also suggested it would be 2024 or even 2025 before the Fed moves in the other direction and cuts rates.
It’s possible the July hike could push CD rates higher still. But it’s also possible the impact will begin to wane while banks and credit union wait for a clearer picture to emerge about the Fed’s next move. In any case, once it appears the Fed is ready to end its rate-hiking campaign for good, that will signal that CD rates have likely peaked.
Note that the “top rates” quoted here are the highest nationally available rates Investopedia 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 five, 10, or even 15 times higher.
Rate Collection Methodology Disclosure
Every business day, Investopedia 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.