CDs
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Karen Bennett
Written by
Marc Wojno
Edited by
May 22, 2024 / 5 min read
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Key takeaways
- The current leading CD rate across terms is 5.36% APY, offered on a one-year CD.
- You'll find APYs of 5% or greater on many CD terms.
- When shopping around, you can often find rates three times the national averages.
A certificate of deposit (CD) can be a useful tool for meeting your savings goals. Whether you’re saving to buy a house, a new car or your dream vacation, a CD allows you to calculate up front exactly how much interest you’ll have earned when the term is up. This is possible due to a CD’s fixed annual percentage yield (APY).
Across various terms from three months to five years, top APYs currently range from 4.45 percent to 5.36 percent. The last drop in leading APYs occurred earlier in May, which included slight declines in top APYs for terms from two to five years. In all, rates remain elevated, so locking in a high rate now can pay off should APYs continue to recede.
Bankrate’s table below shows the highest yields offered on widely available CDs, by term. It also lists national average CD rates and how much you’d earn for each term with a $5,000 investment.
Today's top CD rates by term
| CD term | Institution offering top APY | Highest APY | National average APY | Estimated earnings on $5,000 with top APY |
|---|---|---|---|---|
| 3-month | Popular Direct | 5.30% | 1.22% | $65 |
| 6-month | Popular Direct | 5.30% | 1.70% | $131 |
| 9-month | Forbright Bank | 5.30% | N/A | $197 |
| 1-year | CIBC Bank USA | 5.36% | 1.79% | $268 |
| 18-month | TAB Bank | 5.00% | 1.84% | $380 |
| 2-year | TAB Bank | 4.80% | 1.52% | $492 |
| 3-year | First Internet Bank of Indiana | 4.61% | 1.40% | $724 |
| 4-year | First Internet Bank of Indiana | 4.45% | 1.50% | $951 |
| 5-year | First Internet Bank of Indiana | 4.50% | 1.40% | $1,231 |
Note: Annual percentage yields (APYs) shown are as of May 22, 2024. APYs for some products may vary by region.
N/A: Not available; Bankrate doesn’t track national averages for the 9-month CD term due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.
What is a no-penalty CD?
Like standard CDs, no-penalty CDs typically earn a fixed APY over a set period of time — although unlike regular CDs, no-penalty CDs don’t charge an early withdrawal penalty if you take out the funds before the term ends. The trade-off for this perk is that you’ll often earn a lower APY than you would with a CD that has an early withdrawal penalty.
What the current rate environment means for CDs
In 2022 and 2023, the Federal Reserve raised its benchmark interest rate a total of 11 times, bringing its current target range to a 23-year high of 5.25-5.50 percent. However, the Fed has left rates unchanged for six straight meetings, due to inflation not slowing as quickly as it has in the past.
Yields on competitive savings accounts and CDs tend to move in lockstep with the Fed’s interest rate moves. As such, many banks increase their yields when the Fed raises rates, and they lower yields when the federal funds rate drops. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have since been decreasing gradually.
Is it still a good time to open a CD? “Even though CD yields have pulled back a bit, you’re still able to lock in yields that are well in excess of inflation and do so for multiple years,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The declines will likely accelerate as we get closer to the Fed beginning to cut interest rates, so there is no sense in waiting.”
CD FAQs
Research methodology
Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.
In June 2023, Bankrate updated its methodology that determines the national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.
