Best CD Rates Today – High APYs Won’t Stick Around Forever, May 10, 2024

Certificate of deposit rates remain high following the Fed’s decision last week to hold rates steady for the sixth consecutive time. But annual percentage yields, or APYs, have been falling since the end of 2023 as banks anticipate potential rate cuts later this year. So, if you’ve been thinking of opening a CD, now’s the time to act.

Today’s top CDs offer APYs as high as 5.35% -- more than three times the national average for some terms. And since your rate is fixed when you open a CD, you’ll enjoy the same APY for the CD’s entire term, regardless of where overall rates go next. But the longer you wait to open an account, the lower your earning potential could be.

Experts recommend comparing rates before opening a CD account to get the best APY possible. Enter your information below to get CNET’s partners’ best rate for your area.

Today’s best CD rates

Here are some of the top CD rates available right now and how much you could earn by depositing $5,000 right now:

How the Fed impacts CD rates

The federal funds rate has a significant impact on CD rates. This rate determines how much it costs banks to borrow and lend money to each other. So, when the Fed raises this rate, banks tend to raise APYs on consumer products like savings accounts and CDs to attract new customers and boost their cash reserves.

Beginning in March 2022, the Fed steadily raised the federal funds rate to combat record-high inflation, and CD rates skyrocketed in response. Here’s how average CD rates moved from 2010 to 2023, according to CNET sister site Bankrate:

As inflation started to show signs of cooling,  the central bank paused rates at its last six meetings, and experts predicted rate cuts in mid-to-late 2024. As a result, CD rates began dropping at the end of 2023, and they’ve been on a downward trend ever since.

Here’s where CD rates stand compared to last week:

Have CD rates peaked?

Although experts had anticipated three rate cuts later this year, stubbornly high inflation may thwart these expectations. In its May 1 press release, the Fed stated, “In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

Some experts now say rate hikes are more likely than rate cuts this year. Others think rate cuts are still possible this year, but we may only see two instead of three.

“I believe that CD rates have reached their peak for this year as the Federal Reserve seems to be in a holding pattern,” said Faron Daugs, CFP, founder and CEO at Harrison Wallace Financial Group. “While the likelihood of them cutting rates is diminishing, there is very little indication that they would continue to raise rates unless we begin to see more data that would indicate that inflation is once again accelerating.”

While the future of CD rates is up for debate, one thing is sure: Locking in today’s high rates can protect your earnings from rate cuts when they do happen.

Why you shouldn’t wait to open a CD

With rates as high as they may go, now’s the time to open a CD and lock in a high APY. But that’s not the only reason to open an account today. CDs offer attractive benefits in any rate environment.

CDs are insured up to $250,000 per person, per bank, as long as the bank is insured by the Federal Deposit Insurance Corporation. Credit unions offer the same protection through the National Credit Union Administration. That means your money is safe up to the deposit limits if the bank fails.

Plus, unlike investments such as stocks, CDs are low-risk. You won’t lose your principal deposit unless you run into early withdrawal penalties, which you can easily avoid by choosing the right term.

How to find the best CD for you

In addition to a competitive APY, here’s what you should consider when comparing CD accounts:

• How soon you’ll need your money: Early withdrawal penalties can chip away at your interest earnings. So, be sure to choose a term that fits your savings timeline. You should be comfortable leaving your money untouched for the entire term.
• Minimum deposit requirement: Some CDs require a certain amount to open an account -- typically, $500 to $1,000. Others do not. How much money you have to set aside can help you narrow down the right account for you.
• Fees: Fees can eat into your earnings. Many online banks don’t charge maintenance fees because they have lower overhead costs than banks with physical branches. Still, read the fine print for any account you’re evaluating.
• Federal deposit insurance: Make sure any institution you’re considering is an FDIC or NCUA member so your money is protected if the bank fails.
• Customer ratings and reviews: Check out sites like Trustpilot to see what customers are saying about any bank you’re considering. You want to know that the bank is responsive, professional and easy to work with.

Methodology

CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We evaluate CDs based on APYs, product offerings, accessibility and customer service.

The current banks included in CNET’s weekly CD averages are: Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MYSB Direct, Quontic, Rising Bank, Synchrony, EverBank, Popular Bank, First Internet Bank of Indiana, America First Federal Credit Union, CommunityWide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America, Connexus Credit Union.