Rates Jump For 3- and 5-Year Terms

Savers got a slew of new options for high-earning CDs, with especially juicy rates now available for those looking to lock in a high rate for longer: The top 3-year rate rose to 5.23% from 4.13%, and a 5-year CD now offers 4.86% interest, up from 4.77% the day before.

The new leader for 3, 4 and 5-year terms is U.S. Senate Federal Credit Union, which took the top spots for standard CDs as well as “jumbo” offerings, which require large deposits. Meanwhile, American 1 Credit Union’s 6.00% APY offer on a 1-year term still leads the pack for the best overall rate.

Key Takeaways

  • The best rate on a 3-year CD climbed to 5.23% APY today, up from 5.13% APY.
  • The top rate for a 5-year CD edged up to 4.86% from 4.77%, while the best available for a 4-year term slipped to 4.81% from 4.85%.
  • The overall leading rate among the best nationwide CDs jumped to 6.00% APY earlier this week making it the first nationally available CD to hit that threshold since the Fed began raising interest rates last year.
  • The number of CDs with rates of 5.50% APY or higher rose to 41 today.
  • Data this week showing a cooling economy made it less likely that the Fed will raise its benchmark interest rate again, meaning more upward pressure on CD rates may not be forthcoming.

To help you earn as much as possible, here are the top CD rates available from our partners, followed by more information on the best-paying CDs that are available to U.S. customers everywhere.

Always be sure you understand a bank or credit union’s early withdrawal penalty for a CD you’re considering. The penalty policies vary widely—from mild to harsh to downright onerous—and you are fully within your rights to ask that the policy be explained to you before committing your funds.

Looking to secure a record rate for a longer term? You can score 5.23% APY from the leader of our best 3-year CDs ranking, or at least 5.00% from five other contenders in that term. The current top rates in the 4-year and 5-year terms, meanwhile, are 4.81% APY and 4.86% APY, respectively.

If you have a jumbo-sized deposit, you can earn a bit more in some terms. The top jumbo rate is currently 5.85% APY, available on a 6-month certificate requiring at least a $100,000 deposit. You can also stretch the duration for earning at least 5.00% to four years with a jumbo certificate paying 5.12% APY.

To view the top 15–20 nationwide rates in any term, click on the desired term length in the left column 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 five CD terms, you can do just as well or better in the other three terms with a standard CD. So always be sure to shop every certificate type before making a final decision.

*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.

Will CD Rates Go Up This Year?

This year has already seen CD rates hit record levels, but it’s possible they could climb even higher. That’s because some banks and credit unions are still reacting to the central bank bumping the federal funds rate higher at its July 26 meeting. Also important is that the Federal Reserve has notably kept the door open to further 2023 increases.

The Fed has been aggressively combating decades-high inflation since March of last year, with fast-and-furious hikes in 2022 that eased to more moderate increases in 2023. Last month’s 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 a speech at the Jackson Hole Economic Symposium last week, Fed Chair Jerome Powell said more rate increases were on the table if inflation doesn’t come down enough in the coming months or if economic growth is too fast (which would put upward pressure on inflation.) He said that the Fed could also keep its rate steady, and noted that raising it too much would hurt the economy unnecessarily. The Fed’s next meeting is scheduled for September 19-20. Recent public remarks from other Fed members, meanwhile, indicate they may be divided on the issue.

Currently, only about 7% of traders are expecting the Fed to raise interest rates at its September meeting, according to the fed funds futures probabilities published by the CME Group. Chances of another rate hike dimmed this week after data on inflation and jobs showed the economy, and inflation pressures, downshifting.

Another increase by the Fed would certainly add a little more fuel to the fire for CD rates. But if the September decision is a rate hold, markets—and CD shoppers—could be left guessing if that’s a temporary or permanent pause. When it finally seems 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.

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