- Today’s top CDs offer APYs up to 4.75%.
- APYs have fallen as a result of recent Fed rate cuts, and another cut may be around the corner.
- The sooner you open a CD, the higher the APY you may be able to lock in – and the more interest you could earn.
A certificate of deposit can be a great way to enjoy guaranteed returns on your money. But in a fall-rate environment like today’s, it can be especially valuable.
Annual percentage yields, or APYs, on CDs have fallen steadily since the Federal Reserve cut interest rates at its last two meetings. And with another rate cut on the table for December, they may keep falling in the coming months. So the sooner you open a CD, the higher the APY you may be able to get — and the greater your earning potential could be.
Today’s best CDs offer APYs as high as 4.75% APY. And since your APY is locked in when you open a CD, your returns won’t go down if overall rates keep dropping. But the longer you wait, the less you could stand to earn.
Here are some of the highest CD rates today and how much you could earn by depositing $5,000 right now:
The best CD rates for Nov. 20
| Term | Highest APY* | Bank | Estimated earnings |
|---|---|---|---|
| 6 months | 4.75% | Bread Savings; CommunityWide Federal Credit Union | $117.37 |
| 1 year | 4.50% | CommunityWide Federal Credit Union | $225.00 |
| 3 years | 4.15% | America First Credit Union | $648.69 |
| 5 years | 4.25% | America First Credit Union | $1,156.73 |
How the Fed’s actions impact CD rates
Where CD rates go next depends, in large part, on the Fed’s decision at its December meeting. The federal funds rate determines how much it costs banks to borrow and lend money to each other. When the Fed raises this rate, banks tend to raise their APYs on consumer products like CDs and savings accounts to attract new customers and boost their cash reserves. When it cuts this rate, banks tend to cut their APYs.
CD rates skyrocketed in recent years as the Fed raised the federal funds rate 11 times starting in March 2022 to combat record inflation. At one point, APYs for the CDs we track at CNET reached 5.65%.
As inflation showed signs of cooling, the Fed began pausing rates starting in September 2023. CD rates plateaued and then began to dip slightly as banks anticipated a rate cut later this year. When this rate cut materialized in September, APYs began falling faster — a trend that’s continued since the Fed cut rates again in November.
Here’s where CD rates stood at the start of this week compared with the start of last week:
How latest CD rates have changed in the last week
| Term | Last week’s CNET average APY* | This week’s CNET average APY | Weekly change** |
|---|---|---|---|
| 6 months | 4.20% | 4.21% | $0.00 |
| 1 year | 4.10% | 4.09% | -0.24% |
| 3 years | 3.55% | 3.55% | No change |
| 5 years | 3.47% | 3.48% | $0.00 |
Where are CD rates headed next?
After the Fed’s rate cuts at its last two meetings, experts expected a third cut in December. But the latest Consumer Price Index report showed that inflation, which had been cooling for months, rose by 2.6% in October. That means the Fed may elect to pause rates at its next meeting.
“Based on recent inflation data, I don’t anticipate the Federal Reserve cutting rates again in December,” said Faron Daugs, CFP, founder and CEO at Harrison Wallace Financial Group. “It’s likely they’ll wait for additional confirmation that inflation is under control before making further adjustments.”
This is good news for savers who want to take advantage of high APYs while they’re still around.
What to look for in a CD
A competitive APY is important when comparing CD accounts, but it’s not the only thing you should look at. To find the right account for you, consider these things too:
- When you’ll need your money: Early withdrawal penalties can eat into your interest earnings. So be sure to choose a term that fits your savings timeline. Alternatively, you can select a no-penalty CD, although the APY may not be as high as you’d get with a traditional CD of the same term.
- Minimum deposit requirement: Some CDs require a minimum amount to open an account — typically, $500 to $1,000. Others do not. How much money you have to set aside can help you narrow down your options.
- Fees: Maintenance and other fees can eat into your earnings. Many online banks don’t charge fees because they have lower overhead costs than banks with physical branches. Still, read the fine print for any account you’re evaluating.
- Federal deposit insurance: Make sure any bank or credit union you’re considering is an FDIC or NCUA member so your money is protected if the bank fails.
- Customer ratings and reviews: Visit sites like Trustpilot to see what customers are saying about the bank. You want a bank that’s responsive, professional and easy to work with.
Methodology
CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We evaluate CDs based on APYs, product offerings, accessibility and customer service.
The current banks included in CNET’s weekly CD averages include 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 and Connexus Credit Union.
*APYs as of Nov. 19, 2024, based on the banks we track at CNET. Earnings are based on APYs and assume interest is compounded annually.
**Weekly percentage increase/decrease from Nov. 11, 2024, to Nov. 18, 2024.