Three CDs with higher yields were unveiled this morning, even before the Federal Reserve announced another rate increase in the afternoon. You can now earn 5.25% APY on a nationally available certificate in the 3-year term, up from a rate of 5.12% APY that had held the top spot since May. Not only that, but there are now 33 CDs paying at least 5.35% APY—two more than yesterday and eight more than a week ago.
The new 3-year term leader is EFCU Financial, whose 5.25% APY rate is available on a 30-month certificate with just a $500 deposit.
Key Takeaways
- A new top rate of 5.25% APY joined the 3-year term today, raising the leading rate from 5.13% APY.
- You can now earn 5.35% APY or better with 33 options in our daily ranking of the best CDs, up from 31 yesterday and 25 one week ago.
- The highest nationally available rate across all CD terms continues to be 5.75% APY for a 14-month certificate.
- The Federal Reserve announced another rate hike today, raising its benchmark rate to its highest level in 22 years. Though many banks and credit unions have already boosted their CD rates in anticipation, others could still push rates higher in the coming weeks.
To help you earn as much as possible, here are the top CD rates available from our partners, followed by more information on the best-paying CDs that are available to U.S. customers everywhere.
The highest nationwide rate you can earn in any term remains 5.75% APY. That’s on a 14-month certificate from INOVA Federal Credit Union, which moved into the top slot Friday. For a slightly longer 18 months, you can earn 5.70% with USAlliance Financial, the previous industry leader across terms.
If you have a deposit of at least $100,000 to invest, you can stretch the time horizon for earning at least 5.00% to four years, with a jumbo certificate paying 5.12% APY. Or you boost your interest rate to 5.35% APY on a 30-month term.
Tip
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, 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. So always be sure to shop every CD type before making a final decision.
Where Are CD Rates Headed This Year?
Though CD rates are already at record levels, it’s possible they could climb a bit higher. That’s because the Federal Reserve announced another quarter-point increase in the federal funds rate today. That matters because the fed funds rate is a direct driver of the rates that banks and credit unions are willing to pay customers for their deposits.
Since March 2022, the Federal Reserve has been aggressively combating decades-high inflation with 11 hikes to its benchmark rate in the past 12 meetings. With today’s latest bump, the cumulative increase so far totals 5.25%, rising to its highest level since 2001. That’s created a heyday for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
Today’s announcement provided no strong indications on whether the Federal Reserve will raise its benchmark rate even higher this year, with the written statement simply reiterating the Fed’s commitment to bringing inflation back down to the Fed’s target level of 2% and assessing what future policy tools will be necessary to do so.
In his post-announcement press conference, Federal Reserve Chairman Jerome Powell indicated that the committee has made no decisions at this time on whether to raise rates again in 2023, or if so, what timing or pace they would follow.
“I would say it is certainly possible that we would raise funds again at the September meeting if the data warranted. And I would also say it’s possible that we would choose to hold steady at that meeting. We’re going to be making careful assessments, as I said, meeting by meeting,” Powell said.
It is reasonable to expect that today’s increase, as well as any potential future hikes, will nudge CD rates a bit higher. But the impact will presumably be small, as the Fed’s July move had been nearly certain since June, and many banks and credit unions moved ahead with rate bumps in anticipation. Once it appears the Fed is ready to halt its rate-hike campaign for good, that will be the signal that CD rates have likely peaked.
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-cds-today-rates-keep-rising-7566034?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo