CDs
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Karen Bennett
Written by
Marc Wojno
Edited by
May 29, 2024 / 5 min read
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Key takeaways
- Today's highest CD rate across terms is 5.36% APY, offered for a one-year CD.
- You'll find APYs of 5% or better on many CD terms.
- For most CD terms, national averages are only yielding around one-third of the highest rates.
A certificate of deposit (CD) can be a useful tool for meeting your savings goals. Whether you’re saving to buy a house, a new car or your dream vacation, a CD allows you to calculate up front exactly how much interest you’ll have earned when the term is up. This is possible due to a CD’s fixed annual percentage yield (APY).
As of today, the highest APY across CD terms is 5.36 percent, which is available on a one-year CD from CIBC Bank USA. Currently, many shorter terms are earning higher APYs than longer ones. APYs have been decreasing slightly since late 2023, although they remain elevated. As such, opening a fixed-rate CD now ensures you'll continue to earn that rate even if rates on new CDs continue to fall.
Check out Bankrate’s table below for the highest APY on CD terms from three months to five years, as well as how much $5,000 would earn for each term.
Today's best CD rates by term
| CD term | Institution offering top APY | Highest APY | National average APY | Estimated earnings on $5,000 with top APY |
|---|---|---|---|---|
| 3-month | Popular Direct | 5.30% | 1.25% | $65 |
| 6-month | Popular Direct | 5.30% | 1.74% | $131 |
| 9-month | Forbright Bank | 5.30% | N/A | $197 |
| 1-year | CIBC Bank USA | 5.36% | 1.87% | $268 |
| 18-month | TAB Bank | 5.00% | 1.89% | $380 |
| 2-year | TAB Bank | 4.80% | 1.58% | $492 |
| 3-year | First Internet Bank of Indiana | 4.61% | 1.46% | $724 |
| 4-year | First Internet Bank of Indiana | 4.45% | 1.54% | $951 |
| 5-year | First Internet Bank of Indiana | 4.50% | 1.46% | $1,231 |
Note: Annual percentage yields (APYs) shown are as of May 29, 2024. APYs for some products may vary by region.
N/A: Not available; Bankrate doesn’t track national averages for the 9-month CD term due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.
What is a no-penalty CD?
Like standard CDs, no-penalty CDs typically earn a fixed APY over a set period of time — although unlike regular CDs, no-penalty CDs don’t charge an early withdrawal penalty if you take out the funds before the term ends. The trade-off for this perk is that you’ll often earn a lower APY than you would with a CD that has an early withdrawal penalty.
What the current rate environment means for CDs
In 2022 and 2023, the Federal Reserve raised its benchmark interest rate a total of 11 times, bringing its current target range to a 23-year high of 5.25-5.50 percent. However, the Fed has left rates unchanged for six straight meetings, due to inflation not slowing as quickly as it has in the past.
Yields on competitive savings accounts and CDs tend to move in lockstep with the Fed's interest rate moves. As such, many banks increase their yields when the Fed raises rates, and they lower yields when the federal funds rate drops. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have since been decreasing gradually.
Is it still a good time to open a CD? “Even though CD yields have pulled back a bit, you’re still able to lock in yields that are well in excess of inflation and do so for multiple years,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The declines will likely accelerate as we get closer to the Fed beginning to cut interest rates, so there is no sense in waiting.”
CD FAQs
Research methodology
Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.
In June 2023, Bankrate updated its methodology that determines the national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.
