Top CD Rates Today: Slight Improvement Before Fed Day
CD Term Today's Top National Bank Rate Today's Top National Credit Union Rate Today's Top National Jumbo Rate 3 months 5.20% APY* 5.12% APY 5.20% APY 6 months 5.40% APY 5.65% APY* 5.30% APY 1 year 5.46% APY 5.75% APY* 5.75% APY 18 months 5.33% APY 5.70% APY* 5.52% APY 2 years 5.05% APY 5.30% APY* 5.23% APY 3 years 4.80% APY 5.13% APY 5.18% APY* 4 years 4.65% APY 4.85% APY 5.12% APY* 5 years 4.66% APY 4.77% APY 4.85% APY*
*Indicates the highest APY offered in each term. To view our lists of the top-paying CDs across terms for bank, credit union, and jumbo certificates, click on the column headers above.
Where Are CD Rates Headed This Year?
Though CD rates are already at record levels, it's possible they could climb a bit higher. That's because the Federal Reserve will likely increase the federal funds rate by a quarter percentage point as its meeting concludes tomorrow. That's important because the fed funds rate is a direct driver of the yields that banks and credit unions are willing to pay customers for their deposits.
Since March 2022, the Federal Reserve has been aggressively combating decades-high inflation with 10 hikes to its benchmark rate. The cumulative increase has so far totaled 5.00%, driving today's savings and CD rates to their highest levels since 2007. It's created a heyday not just for CD shoppers, but also for anyone holding cash in a high-yield savings or money market account.
On June 14, the central bank opted to hold its benchmark rate steady for the first time in 11 meetings, in order to better study the impact of previous rate hikes. Minutes from that meeting were released July 5, and combined with various post-meeting statements by Fed Chairman Jerome Powell, signals were strong that two more rate hikes were still possible this year. As a result, financial markets are overwhelmingly confident the Fed will announce a quarter-point hike tomorrow afternoon.
But the prospect of additional increases later this year has dimmed a bit recently. First, the monthly report of headline inflation released July 12 showed June prices rose just 3.0% year-over-year, a notable improvement over May's 4.0% level. Then the following day saw the release of a lower-than-expected inflation figure on wholesale prices. These signs of cooling inflation have investors adjusting their predictions about future Fed rate moves, with a strong majority of them now betting this July increase will be the Fed's last one of 2023.
As always, it's wise to view Fed rate forecasts with caution, as they are just a best guess based on what's known today and are not reliably predictable when looking several months down the road. The Fed independently makes each rate decision based on the freshest economic data and financial news, and that landscape can change quickly.
It is reasonable to expect any increase the Fed does implement will nudge CD rates a bit higher. But the impact will presumably be small, as the Fed's July move has been nearly certain for several weeks now, and many banks and credit unions have already raised their rates in anticipation. When it appears the Fed is ready to halt its rate-hike campaign for good, that will be the signal that CD rates have likely peaked.
Note that the "top rates" quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often five, 10, or even 15 times higher.
Rate Collection Methodology Disclosure
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD's minimum initial deposit must not 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 to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
Source: Investopedia
