If you’re looking for a safe place to store your savings, a certificate of deposit (CD) may be a good choice. These accounts often offer higher interest rates than traditional checking and savings accounts. However, CD rates can vary widely. Learn more about CD rates and where to find high-yield CDs at the best available rates today.
CD rates are relatively high compared to historical averages. This is especially true for shorter terms (about a year or less). For short-term CDs, you can expect the top offers to hover around 4% APY. However, longer term CDs are slightly lower.
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 Federal Reserve began lowering the fed funds rate in light of slowing inflation and the generally improving economic outlook. At the end of 2024, it cut its target rate three times by a total of one percentage point.
The Fed has indicated that it will continue to lower its target interest rate in 2025. However, she now expects a total of two reductions, down from the previous projection of four.
The federal funds rate has no direct impact on deposit rates, although they are related. When the Fed cuts rates, financial institutions typically follow suit (and vice versa). So now that the Fed has cut rates, CD rates are starting to fall again. That’s why now may be a good time to put your money in a CD and lock in today’s best rates.
The process for opening a CD account varies by financial institution. However, there are a few general steps you can expect:
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Research CD rates: One of the most important factors to consider when opening a CD is whether the account offers a competitive rate. You can easily compare CD rates online to find the best deals.
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Choose an account that suits your needs: While the interest rate on a CD is an important consideration, it should not be the only one. You should also evaluate the CD’s term, minimum opening deposit requirements, and fees to ensure a particular account fits your financial needs and goals. For example, you want to avoid choosing a CD term that is too long, otherwise you will be subject to an early withdrawal penalty if you need to withdraw your funds before the CD matures.
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Make sure your documents are ready: When you open a bank account, you will need to provide some information, including your social security number, address, and driver’s license or passport number. Having these documents on hand can help streamline the application process.
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Complete the application: Nowadays, many financial institutions allow you to apply for an account online, although in some cases you may have to go into the office. Either way, the request for a new CD only takes a few minutes. And in many cases, you will receive your approval decision immediately.
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Fund the account: Once your CD application is approved, it’s time to fund the account. You can usually do this by transferring money from another account or sending a check.
Read more: Step-by-step instructions on how to open a CD
