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For the second time this week, we have a bigger and better top CD rate, increasing the nation’s best rate across all CD durations to a record 5.75% APY.
The new market leader is INOVA Federal Credit Union, which offers its 5.75% APY on a 14-month certificate. He replaces former leader USAlliance Financial, which was crowned last Tuesday after unveiling a rate of 5.70% APY for an 18-month term.
Key points to remember
- The highest national rate of any CD term rose to 5.75% APY today, available for 14 months.
- A slightly longer duration of 18 months can still yield 5.70% with the previous leader CD.
- You can now earn 5.35% APY or more with 28 options in our daily top CD rankings, up from 27 yesterday.
- The longest term paying at least 5.00% APY is 3 years at 5.13% APY, or 4 years at 5.12% APY if you can deposit at least $100,000.
- Because the Federal Reserve is expected to raise interest rates next week, many banks and credit unions have already raised their current CD yields, meaning further increases could be small.
To help you earn as much as possible, here are the best CD prices available from our partners, followed by more information on the highest paying CDs available to US customers anywhere in the world.
Today’s new industry leader bumps the highest national rate up 5 basis points from 5.70% to 5.75% APY. But it also significantly raises the key rate for CD buyers specifically looking for an option in the one-year range, as the highest rate available domestically for certificates ranging from 10 to 14 months was just 5.50% APY yesterday.
Anyone looking to extend a stellar CD rate much further into the future can earn up to 5.13% APY with the best 3-year certificate. And if you have a giant deposit of at least $100,000, you can extend it to four years and earn a comparable APY of 5.12%.
Advice
Despite the suggestion that a larger deposit entitles you to a higher return, this isn’t always the case for jumbo certificate rates, which often pay less than standard CDs. Today’s best jumbo deals, which typically require a deposit of $100,000 or more, beat the best standard rates in just three CD terms, while you can do better with standard CDs in the other five terms. Don’t forget to shop around for all types of CDs before making your final choice.
Where are CD rates going this year?
Although CD rates are already at record highs, there is a chance that they will rise a bit more. That’s because the Federal Reserve is almost certain to raise the federal funds rate by a quarter of a percentage point at its meeting next Wednesday. This is important because the federal funds rate is a direct factor in the rates that banks and credit unions are willing to pay customers for their deposits.
Since March 2022, the Federal Reserve has been aggressively battling high inflation for decades with 10 hikes to date in its benchmark rate. The cumulative increase so far has totaled 5.00%, driving today’s savings and CD rates to their highest levels since 2007. This has created a high not only for CD buyers, but also for anyone holding money in a high-yield savings or money market account.
On June 14, the Fed chose to keep its key rate unchanged for the first time in 11 meetings, in order to better study the impact of previous rate hikes. Minutes of that meeting were released on July 5, and combined with various post-meeting statements from Fed Chairman Jerome Powell, signals were strong that two more rate hikes were still possible this year. As a result, financial markets are extremely confident that the Fed will implement a quarter-point hike at its meeting due to conclude on July 26.
But in the past week, the prospect of further increases after July is fading a bit. First, last Wednesday’s monthly headline inflation report showed June prices were up just 3.0% year-on-year, a notable improvement from May’s 4.0% level. Then Thursday saw the publication of a weaker than expected inflation figure on wholesale prices. These signs of slowing inflation are prompting investors to adjust their forecasts for future Fed rate moves, with a strong majority now betting that July’s hike will be the Fed’s last in 2023.
But you should approach the Fed’s rate forecasts with caution, as they are not reliably predictable over several months – they are only today’s best estimates. Every Fed rate decision is based on the latest economic data and financial news, and this landscape can change quickly.
What is reasonable to predict is that any rate hikes implemented by the Fed will push CD rates a bit higher. But the impact is expected to be small, as many banks and credit unions have already raised rates ahead of July’s almost certain increase. When it appears at some point in the future that the Fed is ready to permanently halt its rate hike campaign, it will signal that CD rates have likely peaked.
Note that the “highest rates” quoted here are the highest rates available nationwide that Investopedia has identified in its daily search of rates from hundreds of banks and credit unions. This is very different from the national average, which includes all banks offering a CD with this term, including many large banks that pay paltry interest. Thus, the national averages are always quite low, while the highest rates you can find while shopping are often five, 10, or even 15 times higher.
Disclosure of rate collection methodology
Each business day, Investopedia tracks rate data from more than 200 banks and credit unions that offer CDs to customers nationwide and determines the daily ranking of the highest-paying certificates for each major term. To qualify for our listings, 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 (for example, you don’t live in a certain area or work in a certain type of job), we exclude credit unions whose donation requirement is $40 or more. To learn more about how we choose the best rates, read our full methodology.