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The hits keep coming for the best CD rates, with more music to your ears if you’re shopping for a record rate on a short- to medium-term. Just 12 days ago, our ranking of the best nationwide CDs included 30 certificates paying 5.50% APY or better. Today that count has climbed to a whopping 46, with options ranging from 3 months to 2 years.
The nationwide rate leader across all CD terms remains American 1 Credit Union’s 6.00% APY, available for a 1-year term.
Key Takeaways
- The number of nationally available CDs paying 5.50% APY or higher rose to 46 today, up from 41 Friday and 30 less than two weeks ago.
- The top overall rate in our daily ranking of the best nationwide CDs remains 6.00% APY for a 1-year certificate, the first nationally available CD to reach that threshold since the Federal Reserve began raising interest rates last year.
- If you want to earn more than 5.00% on a longer term, your best bet is the leading 3-year certificate, which is paying 5.23% APY.
- Data last week showing a cooling economy made it less likely the Fed will raise its benchmark interest rate again this year. That means CD rates may not edge much higher than their current levels.
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.
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.
Will CD Rates Go Up This Year?
The Fed has been aggressively combating decades-high inflation since March of last year, with fast-and-furious 2022 hikes to the federal funds rate, and then easing to more moderate increases in 2023. On July 26, the Fed bumped rates for the 11th time in 12 meetings, taking the cumulative increase to 5.25%. That raises the benchmark rate to its highest level since 2001. In turn, it’s created record rate 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 in late August, 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 will conclude September 20. Currently, more than 90% of traders expect the Fed will hold rates steady at that meeting, according to fed funds futures probabilities published by the CME Group. But chances of another increase still linger for the November, where roughly 45 percent of traders are betting on a fresh rate hike.
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.
Correction—Sep. 2, 2023: This article has been updated to state the prior day’s top rate for a 3-year CD and the current top rate for a 4-year jumbo CD.
Investopedia / Alice Morgan & Sabrina Jiang