CD Rates Today, February 9, 2024: Earn up to 5.5% on 4 Common Terms

CD Rates Today, February 9, 2024: Earn up to 5.5% on 4 Common Terms

A certificate of deposit can be an easy, low-risk way to earn interest on money you can afford to leave untouched for a while. In exchange for holding your funds in the CD for a specific period, known as a term, the bank locks in your interest rate when you open the account. This means that you will earn the same amount regardless of where the rates go in the future. But it is important to choose the right account.

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“Annual percentage yield (APY) can vary greatly, both across institutions and across options,” said Jesse Carlucci, chief investment officer at Arrow Investment Management.

Today’s best CDs boast APYs as low as 5.5%. But experts predict rates will drop in the coming months, so if you’re thinking about opening a CD, now is the time to act.

Read on to see where you can find today’s best CD rates.

Key points

  • You can earn up to 5.5% APY with today’s highest earning CDs.
  • With the Fed planning to cut rates later this year, now is the time to lock in an exceptional APY.
  • Currently, short-term CDs offer better rates than long-term CDs.

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:

APY as of February 9, 2024, based on banks tracked on CNET. Earnings are based on APYs and assume interest is compounded annually.

Why short-term CDs currently offer the best rates

CD rates are affected by the federal funds rate, which determines how much it costs banks to borrow and lend money to each other. When the Federal Reserve raises this rate, banks tend to follow suit, raising interest rates on consumer products like credit cards, savings accounts and CDs to attract new customers.

Starting in March 2022, the Fed has regularly raised the federal funds rate to fight inflation, and CD rates have skyrocketed in response. But with inflation starting to cool, the Fed has suspended rate hikes at its last four meetings. As a result, CD rates stabilized in late 2023, and banks have cut rates on CD terms in recent months.

Here is the APY situation compared to last week:

Term CNET Average APY Weekly change* Average FDIC evaluate
6 months 4.89% -0.40% 1.51%
1 years 5.06% -0.39% 1.86%
3 years 4.14% -0.71% 1.40%
5 years 3.95% -0.50% 1.41%
APY as of February 9, 2024. Based on banks tracked on CNET.
*Weekly percentage increase/decrease from January 29, 2024 to February 5, 2024.

Typically, long-term CD rates outperform short-term CD rates because banks want to encourage customers to keep their money with them longer. But with the Fed expected to cut rates later this year, banks may be reluctant to lock customers into a high APY for an extended period. Currently, short-term CDs – those with a term of one year or less – offer higher rates than long-term CDs.

“I personally have invested money in nine- to 12-month CDs since these have the highest rates and allow me the flexibility to reevaluate my cash holdings in a year or so,” said Bernadette Joy, personal finance coach and CNET Member of the financial review committee.

The advantages of opening a CD now

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.

How to find the best CD for you

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.

Methodology

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.

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