:max_bytes(150000):strip_icc()/Image09.05-327bd0e01c784c2ea671160b4e32c6be.png "Top CD Rates Today: Five New High Yield Options")
The hits keep coming for the best CD rates, with more music to your ears as you shop for record rates in the short to medium term. Just twelve days ago, our ranking of the best nationwide CDs included 30 certificates paying 5.50% APY or better. Today, that number has risen to a whopping 46, with options ranging from 3 months to 2 years.
The nationwide rate leader for all CD terms remains American 1 Credit Union’s 6.00% APY, available for a 1-year term.
Key learning points
- The number of nationwide CDs paying 5.50% APY or higher rose to 46 today, up from 41 Friday and 30 less than two weeks ago.
- The highest overall rate in our daily ranking of the best nationwide CDs remains 6.00% APY for a 1-year certificate, the first nationally available CD to reach this threshold since the Federal Reserve began raising rates last year.
- If you want to earn more than 5.00% in the longer term, it is best to go for the lead 3-year certificate, which pays 5.23% APY.
- Data from last week showing that the economy was cooling made it less likely that the Fed will hike rates again this year. That means CD rates may not be much higher than their current levels.
To help you earn as much as possible, here’s the best CD rates available from our partners, followed by more information on the highest paying CDs available to US customers anywhere.
Always make sure you understand a bank or credit union’s early withdrawal penalty for a CD you’re considering. Penalty policies vary widely – from mild to severe to downright onerous – and you have every right to request that the policy be explained to you before committing your funds.
Do you want to secure a record rate for a longer term? You can get an APY score of 5.23% against the leader in our ranking of best 3-year CDs, or at least 5.00% against five other contenders in that term. The current top interest rates for the four- and five-year terms, meanwhile, are 4.81% APY and 4.86% APY, respectively.
If you have a large deposit, you can earn a little more in some cases. The top jumbo rate is currently 5.85% APY, available on a 6-month certificate that requires a minimum $100,000 deposit.
Despite the suggestion that a larger deposit entitles you to a higher return, this is not always the case for the rates for jumbo certificates, which often pay less than for standard CDs. While today’s best jumbo deals, which typically require a down payment of $100,000 or more, beat the best standard rates in five CD terms, in the other three terms you can do just as well or even better with a standard CD . So always make sure to review each certificate type before making a final decision.
Will CD rates rise this year?
The Fed has been aggressively fighting decades of high inflation since March last year, with rapid and furious increases in Federal Funds rates in 2022, then easing into more moderate hikes in 2023. On July 26, the Fed raised rates for the US central bank. 11th time in 12 meetings, bringing the cumulative increase to 5.25%. That brings interest rates to their highest level since 2001. This, in turn, has created record interest rates for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
The Fed’s official announcement in July gave no strong indication of whether it will raise rates further this year. The written statement simply reiterated the Fed’s commitment to bring inflation back to its target level of 2%.
Speaking at the Jackson Hole Economic Symposium in late August, Fed Chairman Jerome Powell said more rate hikes are on the table if inflation doesn’t fall enough in the coming months or if economic growth is too fast (which would put upward pressure). He said the Fed could also keep rates stable, noting that an excessive rate hike would unnecessarily hurt the economy.
The next Fed meeting ends on September 20. Currently, more than 90% of traders expect the Fed to hold interest rates steady at that meeting, according to the Fed Funds Futures odds published by the CME Group. But the chance of another hike remains in November, with roughly 45 percent of traders betting on another rate hike.
Another hike by the Fed would certainly add more fuel to the CD rate fire. But if September’s decision includes a rate cut, markets – and CD shoppers – could be left in the dark as to whether that’s a temporary or permanent pause. If it finally looks like the Fed is ready to end its rate hike campaign for good, it will be a signal that CD rates have probably peaked.
Please note that the “top rates” listed here are the highest nationally available rates that Investopedia identified in its research of daily rates at hundreds of banks and credit unions. This is very different from the national average, which includes all banks that offer a CD with that term, including many large banks that pay a pittance in interest. So the national averages are always quite low, while the top rates you can find by shopping around are often five, ten or even fifteen times higher.
Disclosure of Rate Collection Methodology
Each business day, Investopedia tracks the rate data of more than 200 banks and credit unions nationwide offering CDs to customers and ranks the highest paying certificates in each major maturity on a daily basis. To be eligible for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions) and the CD’s minimum initial deposit cannot 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 in order to become a member if you don’t meet other eligibility criteria (for example, you don’t live in a certain area or work in a certain type of job), we exclude credit unions whose donation requirement is $40 or more. Read our full methodology to learn more about how we choose the best rates.
Correction – September 2nd August 2023: This article has been updated with the previous day’s top rate for a 3-year CD and the current top rate for a 4-year jumbo CD.
Investopedia / Alice Morgan and Sabrina Jiang
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