When it comes to certificates of deposit, timing plays a crucial role in how much you can earn. And in the current pricing environment, the best time to open a CD is now.
Rates remain high across the board, with the highest earning CDs offering annual percentage yields, or APY, of up to 5.5%. But APYs have been declining for several months and are likely to continue falling. Your CD rate is set when you open your account. So if you want to secure a great price, time is of the essence.
That said, it’s also important to choose the right CD. “APY can vary greatly, both between institutions and between options,” said Jesse Carlucci, chief investment officer at Arrow Investment Management. He read on to see where you can get today’s best CD rates.
Experts recommend comparing rates before opening a CD account to get the best APY possible. Enter your information below to get the best CNET partner rate for your area.
Today’s best CD rates
Here are some of the best CD rates available right now and how much you could earn by depositing $5,000 right now:
Why CD Rates Remain High – For Now
CD rates have been high for nearly two years. As of March 2022, the Federal Reserve has regularly increased the federal funds rate to combat rampant inflation. 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 rates on consumer products from credit cards to CDs to attract new customers and increase their cash flow .
As the federal funds rate has increased, CD rates have also increased, with some accounts offering APYs north of 5.6%. Today, rates remain high, but have slowly fallen in recent months.
Here is the APY situation compared to last week:
|CNET Average APY
|Average FDIC evaluate
*Weekly percentage increase/decrease from February 5, 2024 to February 12, 2024.
In its last four meetings, the Fed has decided to suspend rate increases and, as a result, CD rates have stabilized. While you can still find APYs as low as 5.5%, banks have been cutting rates across the board in recent months. And this trend is set to continue as the Fed is expected to begin cutting rates later this year.
So if you’re thinking about opening a CD, now is the time to lock in an APY while rates remain high.
Why you shouldn’t wait to open a CD
A fixed APY isn’t the only benefit of opening a CD today. CDs offer attractive benefits in any pricing environment.
CDs held at banks covered by the Federal Deposit Insurance Corporation or credit unions insured by the National Credit Union Administration are protected by federal deposit insurance. This means your money is safe up to $250,000 per person, per institution in the event of a bank failure. This makes them a low-risk way to boost your savings.
Additionally, most banks charge an early withdrawal penalty if you withdraw money before the CD matures. This can erode your earnings and discourage you from tapping into your funds before you need them.
What to look for when choosing a CD account
In addition to a competitive APY, here’s what you should look for when comparing CD accounts:
- How soon will you need the funds: Early withdrawal penalties can eat into your interest earnings. So make sure you choose a term that fits your savings history.
- Minimum Deposit Requirement: Some CDs require a certain amount to open an account, typically $500 to $1,000. Others have no minimum deposit requirements. The amount of money you need to set aside can help you narrow down your account options.
- Commissions: Fees can eat away at your balance. Many online banks do not charge maintenance fees. They have lower overhead costs than banks with physical branches and pass these savings on to consumers through higher rates and lower fees. However, be sure to read the fine print for any account you are considering.
- Federal Deposit Insurance: Confirm that any institution you are considering is a member of the FDIC or NCUA to ensure your money is protected in the event of a bank failure.
- Customer Ratings and Reviews: Read what customers are saying about the bank you’re considering on sites like Trustpilot to make sure the bank is responsive, professional and easy to work with.
CNET examines CD rates based on the latest APY information from issuers’ websites. We evaluated CD rates from more than 50 banks, credit unions, and finance companies. We rate CDs based on APYs, product offerings, affordability, and customer service.
Banks currently 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.