Ready to take your savings to the next level? Consider Amboy Direct’s 2-year Treasury Index certificate of deposit. Starting with just $100, you can secure an impressive 5.36% APY. This CD’s rate fluctuates quarterly, keeping pace with the Wall Street Journal’s 3-month treasury rate, offering a dynamic way to grow your funds. Read on to learn more about the best CD rates available today.
Key Takeaways
- For 3-month CDs, Shoreham Bank offers the top rate at 5.50% APY.
- Northern Bank Direct offers the highest one-year CD rate, with 5.60% APY.
- CD rates today remain above the national average.
Top CD Rates Today
Here’s a look at the top CD rates for today:
| CD TERM | Highest APY | National Average APY | WHERE TO INVEST |
|---|---|---|---|
| 3-month | 5.50% | 1.25% | Shoreham Bank |
| 6-month | 5.55% | 1.77% | Newtek Bank |
| 1-year | 5.60% | 1.93% | Northern Bank Direct |
| 18-month | 5.30% | 1.82% | Credit Human |
| 2-year | 5.36% | 1.69% | Amboy Direct |
| 3-year | 5.75% | 1.61% | Farmers Insurance Federal Credit Union |
| 4-year | 4.70% | 1.49% | Credit Human |
| 5-year | 4.55% | 1.60% | First Internet Bank |
| | | | |
Quick Tip
While there are various types of CDs available to savers, one noteworthy option is the inflation-protected CD. Unlike traditional fixed-rate CDs, these special CDs have their rates tied to inflation, which means the interest rate can adjust over time.
If inflation rises, the interest rate on the CD also rises, preserving the purchasing power of your savings over time. Opting for this type of CD could be a smart move for anyone looking to protect their savings from the erosive effects of inflation.
Top CD Rates from 2010 to 2024
The landscape of CD rates has evolved significantly over the past decade. In the early 2010s, rates were relatively low, reflecting the aftermath of the 2008 financial crisis. Banks offered CD rates slightly below 0.42%, a trend that persisted for several years as the economy slowly recovered. Fast forward to the mid-2010s, and while rates began to inch upwards, they remained modest, barely crossing the 0.60% threshold for longer-term CDs by the end of 2019.
The real turning point came in recent years, especially from 2022 onwards, when CD rates witnessed a remarkable surge, with the best rates now exceeding 5.00%. This shift is largely attributed to the Federal Reserve’s response to inflation and economic conditions, pushing interest rates higher to stabilize the economy. By December 2023, some banks were offering rates of 5.30% or more on 12-month CDs.
Today, investors have the opportunity to secure much higher returns on CDs than they could have just a few years ago, highlighting the importance of timing and market conditions in maximizing savings and investments.
How CDs Work
CDs are a type of savings account with a fixed interest rate and a set maturity date. When you open a CD, you agree not to withdraw your money until the term ends, which can range from a few months to several years. If you do decide to take your money out early, you’ll likely face a penalty. Here are some key points to know:
- CDs offer fixed interest rates for the duration of their term, making them a predictable, stable investment. Common terms include 3, 6, 12 and 18 months.
- When you open a CD at a bank or credit union, it’s protected by federal insurance — FDIC for banks, NCUA for credit unions — safeguarding your money up to $250,000.
- CDs are considered a safer investment compared to stocks and crypto, providing a secure place for your savings.
Pros To Opening a CD
- Your earnings on a CD are guaranteed, so you know exactly what you’re getting.
- The interest rate on a fixed-rate CD won’t change, offering stability that’s not always found in other investments.
- With a CD, it’s harder to dip into your savings on a whim, helping you save more effectively.
- Your CD investment at an insured bank or credit union is protected up to $250,000, offering you a sense of security.
- CDs generally come without monthly maintenance fees, unlike some bank accounts or checking accounts.
Cons To Opening a CD
- Withdrawing your money before the CD’s term ends means facing penalties.
- With fixed interest rate CDs, if interest rates rise, your CD keeps the same rate, which means you might miss opportunities for higher earnings.
- The return on a CD might be lower than what you could earn through other investments like stocks or real estate.
- Automatic renewal features may lock you into a new term with your CD if you’re not attentive at the end of your current term.
- Opening a CD at a bank may require a minimum deposit, posing a challenge for individuals beginning with modest sums.
Are CD Accounts Worth It?
If you are looking to tuck away a lump sum of money for a large purchase or future investment, a CD is a low-risk way to do just that. However, if you are looking to make more money faster, a CD may not be the right fit for you. Always consider your financial goals carefully, and consult with a financial advisor to make the most informed decision.
Methodology
GOBankingRates is here to help you navigate your finances. Here’s an explanation of how we choose the top CD rates today.
GOBankingRates analyzes deposit rates from banks and credit unions with nationwide availability. We then identify the best rates among this group by focusing on annual percentage yield. Institutions listed in the daily chart are insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund.
FAQ
Here are the answers to some of the most frequently asked questions regarding CD accounts.- What is the highest paying CD rate right now?
- As of April 25, 2024, the highest paying CD rate is offered by Farmers Insurance Federal Credit Union at an APY of 5.75% for their 3-year Variable Rate Certificate. This rate outpaces many others in the market today.
- What should you consider when choosing a CD?
- When selecting a CD, consider factors like the term length, interest rate, minimum deposit requirements and the penalty for early withdrawal. Also, think about your financial goals and how the CD fits into your overall savings or investment strategy.
- Can you lose money on a CD?
- Generally, CDs are considered a low-risk investment, and it's unlikely you'll lose your principal as long as you choose CDs from FDIC-insured banks or NCUA-insured credit unions. However, withdrawing funds before the maturity date can result in penalties that might reduce your earnings.
Compare CD Rates
- Best 3-Month CD Rates
- Best 6-Month CD Rates
- Best 1-Year CD Rates
- Best 5-Year CD Rates
- Best No-Penalty CD Rates
- Best Jumbo CD Rates
- Best No-Penalty CD Rates
- Best CDs With No Minimum Deposit Requirement
- Best CD Accounts
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of April 25, 2024.
Sheiresa McRae Ngo contributed to the reporting for this article.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.