Best CD Rates Today -- High APYs Won't Last Forever, May 17, 2024 (2024)

Certificate of deposit rates remain high following the Federal Reserve’s decision to hold the federal funds rate steady earlier this month. Top CDs currently offer up to 5.35% annual percentage yield, or APY -- more than three times the national average for some terms. And unlike savings account rates, which are variable, CD rates are fixed when you open the account. That means you’ll continue to enjoy the same high APY even if rates fall in the future.

“The benefits of CDs in any rate environment are the protection against market losses, fixed income to help offset the negative effect of inflation and the peace of mind that comes with [federal deposit insurance],” said Dana Menard, CFP, founder and lead financial planner at Twin Cities Wealth Strategies.

But APYs can vary significantly from bank to bank, so it’s essential to know where you can score the highest one for your preferred CD term.

Experts recommend comparing rates before opening a CD account to get the best APY possible. Enter your information below to get CNET’s partners’ best rate for your area.

Today’s best CD rates

Here are some of the top CD rates available right now and how much you could earn by depositing $5,000 right now:

Have CD rates peaked?

Before the Federal Open Market Committee meeting earlier this month, experts anticipated three rate cuts later this year. But with inflation staying stubbornly high, these expectations seem less likely to prove true.

The latest Consumer Price Index report shows that inflation rose 3.4% year or over year -- down slightly from 3.5% in March but still far from the Fed’s 2% target rate. Some experts now believe rate hikes are more likely than rate cuts this year. Others think rate cuts are still possible in 2024, but we may see only two instead of three.

“I expect the Fed to cut rates this year, but not more than twice,” said Noah Damsky, CFA, Principal of Marina Wealth Advisors. “I don’t foresee employment weakening or inflation taking a meaningful leg lower, so rate cuts will be modest at this stage.”

But while the future of CD rates is up for debate, one thing is certain: Locking in today’s high rates can safeguard your earnings from rate cuts when they do happen.

How the Fed’s fight against inflation affects CD rates

The federal funds rate has a significant impact on CD rates. This rate determines how much it costs banks to borrow and lend money to each other. So, when the Fed raises this rate, banks tend to raise APYs on consumer products like savings accounts and CDs to attract new customers and boost their cash reserves.
Beginning in March 2022, the Fed steadily raised the federal funds rate to combat record-high inflation, and CD rates skyrocketed in response. Here’s how average CD rates moved from 2010 to 2023, according to CNET sister site Bankrate:

As inflation started to show signs of cooling, the central bank paused rates at its last six meetings, and experts predicted rate cuts in mid-to-late 2024. As a result, CD rates began dropping at the end of 2023. The past few weeks have seen a scattered mix of rate cuts and rate hikes as banks re-evaluate their strategies for different CD terms. These fluctuations have been minor, but they reflect the uncertainty over where inflation will go next and what the Fed’s next decision will be.

Here’s where CD rates stand compared to last week:

Why you should open a CD now

With rates as high as they may go, now’s the time to open a CD and lock in a high APY. But that’s not the only reason to open an account today. CDs offer attractive benefits in any rate environment.

CDs are insured up to $250,000 per person, per bank, as long as the bank is insured by the Federal Deposit Insurance Corporation. Credit unions offer the same protection through the National Credit Union Administration. That means your money is safe up to the deposit limits if the bank fails.

Plus, unlike investments such as stocks, CDs are low-risk. You won’t lose your principal deposit unless you run into early withdrawal penalties, which you can easily avoid by choosing the right term.

How to choose the right CD for you

In addition to a competitive APY, here’s what you should consider when comparing CD accounts:

• How soon you’ll need your money: Early withdrawal penalties can chip away at your interest earnings. So be sure to choose a term that fits your savings timeline. You should be comfortable leaving your money untouched for the entire term.
• Minimum deposit requirement: Some CDs require a certain 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 the right account for you.
• Fees: Fees can eat into your earnings. Many online banks don’t charge maintenance 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 institution you’re considering is an FDIC or NCUA member so your money is protected if the bank fails.
• Customer ratings and reviews: Check out sites like Trustpilot to see what customers are saying about any bank you’re considering. You want to know that the bank is 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 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.