In good news for savers, the top-paying banks and credit unions continue to raise CD rates, even though the Federal Reserve has kept its benchmark rate steady this month. The number of options in our daily ranking of the best CDs with a rate of 5.35% APY or better grew again today, climbing to 18. That’s up from 15 yesterday and 13 Friday.
For people looking to score the highest possible rate in any term, the best rate remains 5.65% APY on a 9-month certificate. But if instead your goal is to lock in one of today’s record rates as far down the road as possible, you can score a 3-year CD with a 5.13% APY, or a 4-year jumbo CD with 5.12% APY if you have $100,000 or more to deposit.
Key Takeaways
- Eighteen CDs in our daily rankings now pay 5.35% APY or better, up from 15 yesterday and 13 last week.
- The most you can earn in any CD term remains 5.65% APY, available for 9 months.
- The longest-duration CDs paying at least 5.00% APY continue to be a 3-year certificate paying 5.13% APY and a jumbo 4-year certificate paying 5.12%, but that one requires a $100,000 deposit.
- The Federal Reserve decided to hold the federal funds rate steady at its June 14 meeting, but has clearly signaled it will likely need to raise rates later this year.
- Fed rate predictions are never guaranteed, but if another hike does occur, it will almost certainly push CD rates slightly higher than today’s record levels.
| CD Terms | Yesterday’s Top National Rate | Today’s Top National Rate | Day’s Change (percentage points) |
| 3 months | 5.16% APY | 5.16% APY | No change |
| 6 months | 5.65% APY | 5.65% APY | No change |
| 1 year | 5.52% APY | 5.52% APY | No change |
| 18 months | 5.45% APY | 5.45% APY | No change |
| 2 years | 5.25% APY | 5.25% APY | No change |
| 3 years | 5.13% APY | 5.13% APY | No change |
| 4 years | 4.85% APY | 4.85% APY | No change |
| 5 years | 4.77% APY | 4.77% APY | No change |
Despite the suggestion that a larger deposit entitles you to a higher return, that’s not always the case for jumbo certificate rates, which often pay less than standard CDs. Today’s best jumbo offers, which typically require a deposit of $100,000 or more, do beat the best standard rates in four CD terms, but you can do just as well or better with standard CDs in the other four terms. So remember to shop every CD type before making a final choice.
Where Are CD Rates Headed This Year?
The Federal Reserve has been on a mission for the last 15 months to combat decades-high inflation with aggressive increases to the federal funds rate, which have totaled 5.00% so far. Because deposit rates closely follow the fed funds rate, the Fed’s multiple increases have driven today’s savings and CD rates to their highest levels since 2007, creating a heyday for CD shoppers, as well as anyone holding cash in a high-yield savings or money market account.
At its last meeting, on June 14, the Fed held rates steady for the first time in 11 meetings. But a look at the committee’s post-meeting report revealed that further rate hikes this year are likely. The “dot plot” in the report represents where each Fed member believes the benchmark rate should be at the end of this and future years Of the 18 members, 16 believe at least one more increase will be necessary by the end of 2023, and 12 believe at least two more hikes will be in order.
Since it’s overwhelmingly expected that any further rate hikes by the Fed would be in minimal 0.25% increments, one or two more increases would raise the fed funds rate up to 0.50% higher than today. Even a 0.25% increase later this year would almost certainly push CD rates slightly higher.
But a word of caution: There is never any guarantee on what moves the Fed will make, as each rate decision is based on up-to-the-minute economic data and financial news. So while it’s currently probable that the Fed will raise rates further, it’s also still possible the Fed will back away from that plan. If that happens, it will mean today’s CDs are already at or near their peak rates, making them a good buy right now.
The Fed’s next meeting will conclude July 26.
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: https://www.investopedia.com/top-cd-rates-today-june-27-2023-7554165?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo