Current Certificate of Deposit (CD) interest rates are among the highest we have seen in more than a decade, thanks to several rate hikes by the Federal Reserve. However, the Fed finally cut its target rate this month, so this could be your last chance to lock in a competitive rate.
CD rates vary widely by financial institution, so it’s important to make sure you’re getting the best possible price when shopping for a CD. Below is an overview of today’s CD rates and where to find the best deals.
Historically, longer-term CDs have offered higher interest rates than shorter-term CDs. Generally, this is because banks would pay better rates to encourage savers to keep their money on deposit for longer. However, in the current economic climate, the opposite is true.
See our picks for the best CD accounts available today >>
Today, the highest CD interest rate is 4.27% APY, offered by NexBank on its 1-year CD. However, a large minimum opening deposit of $25,000 is required.
The second highest rate can be found at two banks: Synchrony (term of 13 months) and Marcus from Goldman Sachs (1 year). Both banks offer 4.25% APY.
Here’s a look at some of the best CD rates currently available from our verified partners:
The amount of interest you can earn with a CD depends on the annual percentage rate (APY). This is a measure of your total earnings after one year, taking into account the base rate and how often the interest is compounded (CD interest is typically compounded daily or monthly).
Let’s say you invest $1,000 in a one-year CD with an APY of 1.81%, and monthly interest compounding. At the end of that year, your balance would rise to €1,018.25 – your initial deposit of €1,000, plus €18.25 in interest.
Now let’s say you choose a one-year CD that offers 5% APY instead. In this case, your balance will grow to €1,051.16 in the same period, including €51.16 in interest.
The more you deposit into a CD, the more you can earn. If we take the same example of a one-year CD at 5% APY, but deposit $10,000, your total balance when the CD matures would be $10,511.62, meaning you would earn $511.62 in interest. ​​
Read more: What is a good CD rate?
When choosing a CD, the interest rate is usually paramount. However, the rate is not the only factor to consider. There are different types of CDs that offer different benefits, although you may have to accept a slightly lower interest rate in exchange for more flexibility. Here’s an overview of some common types of CDs to consider in addition to traditional CDs:
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Inflatable CD: This type of CD allows you to request a higher interest rate if your bank’s rates increase during the life of the account. However, you are usually only allowed to increase your rate once.
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CD without penalty: The CD type, also known as a liquid CD, gives you the ability to withdraw your money before the maturity date without paying a penalty.
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Jumbo CD: These CDs require a higher minimum deposit (usually $100,000 or more) and often offer a higher interest rate in return. However, in the current CD rate environment, the difference between traditional and jumbo CD rates may not be that great.
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Mediated CD: As the name suggests, these CDs are purchased through a brokerage firm rather than directly from a bank. Brokered CDs can sometimes offer higher rates or more flexible terms, but they also involve more risk and may not be FDIC insured.
