A certificate of deposit (CD) offers a safe way to store your savings while earning a reliable return. However, interest rates on CDs can vary widely. Read on to learn more about current CD rates and where to find high-yield CDs with competitive rates.
What are the best CD rates today?
As of July 24, 2024, CD rates remained high by historical standards, especially for shorter maturities. For example, you can find rates of 5.00% APY or higher for terms of about a year or less. While interest rates for long-term CDs aren’t as high, the best rates available still hover close to 4% APY for terms of three years or more.
Here’s a look at some of the best CD rates available today from our verified partners:
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Will CD Rates Fall Soon?
CD rates are tied to the federal funds rate; When the Fed raises its target rate, deposit account rates generally follow suit and vice versa.
There is speculation that the Federal Reserve may reduce interest rates later this year. The Fed has held interest rates steady so far in 2024, with a target rate of 5.25% – 5.50%. However, he indicated the need to eventually cut rates as inflation cools and economic growth improves. Fed Chairman Jerome Powell declined to provide a timeline on when any cuts might occur, but most experts agree that rates will fall in the near future.
If the Fed lowers interest rates, CD rates will likely fall as well. That means now may be the last chance for savers to lock in today’s highest CD rates.
See more information: Can you gift a CD?
Is now a good time to invest in a CD?
Whether or not you should put your money in a CD depends on several factors. Earning a competitive interest rate is important, but it’s not the only consideration to keep in mind. Here’s a closer look at some of these key factors to consider:
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Interest rate: CDs are a more attractive investment option when interest rates are high or trending downward, as they lock in the current rate for the entire term. Considering recent trends in interest rates, it might be a good time to put your money into a CD and lock in a guaranteed rate of return.
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Financial objectives: CDs are a safe investment choice if you want to preserve capital and earn a stable return. They are FDIC insured up to the federal limit and cannot lose money in most cases, making them a low-risk option. That said, if you’re saving for a long-term goal like retirement, a CD may not be the best choice since market investments tend to provide higher returns on average.
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Liquidity needs: CDs require you to lock up your money for a certain period of time, known as the term. If you think you’ll need to access your money before the term ends, avoid CDs as they come with early withdrawal penalties. A high-yield savings account or another type of deposit account may be a better option.
See more information: How much do you need to open a CD?
Where to Find the Best CD Rates
CDs are available at most banks. However, if you’re interested in opening a CD, it’s important to look beyond your current bank. Not all CDs offer competitive rates, even in a high interest rate environment. This is why comparing various CD account options is important, especially among financial institutions known for offering higher rates.
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Online Banking: One of the best places to find high-yield CDs is online banks. Since they are cheaper to operate than traditional banks, online banks can transfer those savings to customers in the form of lower fees and higher fees on deposits. So, if you’re interested in opening a high-rate CD, online institutions are a great place to start.
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Credit unions: As nonprofit financial cooperatives, credit unions tend to offer better rates and lower fees than for-profit banks. Research local credit unions in your area, as well as online credit unions, and find out if you qualify to join one.
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Community banks: Local banks strive to serve their communities and often offer more affordable and personalized services than large national banks. They also tend to offer more competitive interest rates on deposits.
