Unsurprisingly, the last bank day before Christmas brought little movement in CD rates. The overall leading rate that dons the national crown, as well as every leading term rate, held firm to take us through the holiday weekend.
The current rate leader came on the scene just yesterday. Offered by Climate First Bank, the 8-month CD is paying 5.79% APY. The national runner-up also has an 8-month term, with INOVA Federal Credit Union paying 5.70%. Longer terms pay a little less, but it’s good to remember that any CD rate in the 4% or 5% range is still historically high. So locking in now could be a smart move to earn an excellent guaranteed return for months or years down the road.
Key Takeaways
- Today’s top rate in our daily ranking of the best nationwide CDs is holding its ground at 5.79% APY. That’s down from a peak of 6.50% in October, but it’s still a historically high CD return.
- Two CDs remain in our ranking that pay at least 5.75% APY, while three more pay 5.70% APY. Six weeks ago, a plentiful 18 CDs were offering 5.75% or more.
- For those able to open a jumbo CD, four additional options pay at least 5.70% APY.
- Federal Reserve Chair Jerome Powell said last week that Fed members had begun discussing when rate cuts might occur. As a result, CD rates are likely to continue declining.
Below you’ll find featured rates available from our partners, followed by details from our complete ranking of the best CDs available nationwide.
The number of CDs paying at least 5.75% surged to a historic peak of 18 on Nov. 3. But in the seven weeks since, the number has fallen sharply—down to just five by the end of last week and now to a slim two. Three next-tier CDs pay 5.70% APY, on terms of 7 to 14 months.
The highest rates continue to be available in terms up to 18 months. But stellar rates can still be had on longer terms. The top-paying 2-year certificate offers 5.39% APY, while you can secure 5.23% for a 3-year term. And in the 4-year and 5-year terms, you can lock up a long-lasting rate as high as 5.00% APY.
Though the yields on these longer certificates are less than what the short terms offer, securing one of today’s record rates for as long as possible could be a smart move, as the current expectation is that interest rates will be falling over the next few years.
Fast Fact
When asked in December if they were choosing more or less of certain investments during recent market events, 28% of Investopedia readers said they were leaning into CDs—just one percentage point behind the leading choice of money market funds. Additionally, 11% of readers said they would open a CD if they had an extra $10,000 to invest, in third place behind individual stocks and ETFs.
For anyone with a jumbo-sized deposit, the leading jumbo offer dropped today. Previously 5.80%, the top nationwide rate on a jumbo CD is now 5.77% APY, available from My eBanc for either a 6-month or 1-year term.
Note that jumbo CDs don’t always pay a higher return than standard certificates. Sometimes you can do just as well—or better—with a standard CD. That’s currently the case in six of the eight terms above, so it’s smart to shop both certificate types before making a final decision.
Where Are CD Rates Headed Next Year?
The Federal Reserve opted to hold rates steady last week at a 22-year high, the third meeting in a row it’s done so. The Fed has been aggressively combating decades-high inflation since March of last year, raising the federal funds rate with fast and furious hikes in 2022 and then more moderate increases in 2023.
This has created historically favorable conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
Inflation has cooled significantly in recent months, including a mild drop in November. And though Chair Powell said the rate-setting committee is not taking the possibility of future rate hikes off the table, he also said in his press conference that Fed members have started to discuss lowering rates.
The Fed’s dot plot shows that no members of the rate-setting committee predict another rate increase in 2024. Instead, the median expectation is for three rate cuts in 2024, for a total drop of 0.75%.
This has significant implications for CD shoppers and other savers. Banks and credit unions base their deposit rates on the fed funds rate. Even talk about cuts means the wild runup we’ve seen in deposit rates is likely over.
“The Fed virtually made it official that there’ll be no more rate hikes this cycle,” Robert Frick, corporate economist with Navy Federal Credit Union, said in a statement.
“That’s a call to action for savers to lock in current high CD rates and other rates in safe vehicles such as Treasuries,” Frick continued. “Those rates will likely only drop from here, and given they’re higher than the rate of inflation, savers can earn real returns for now.”
As we always caution, trying to predict the Fed’s future rate moves is an uncertain exercise. But for the time being, it seems CD rates are likely to continue pulling back from their recent peaks.
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.
How We Find the Top CD Rates Today
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.
Investopedia / Alice Morgan
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