Certificate of deposit (CD) rate rises today round out a week of increases in advance of next week’s announcement by the Federal Reserve. You can now get a 1-year certificate of deposit (CD) that pays 5.50% (yesterday’s top rate for that term was 5.35%) and a 5-year CD that pays 4.95% (up from a high of 4.77% yesterday). There’s also a 5-year jumbo CD with a 5.00% APY, but you’ll need to deposit at least $50,000 to get that rate.
You’ve got even more options that offer a superb rate, too. Yesterday, our daily rankings of the best nationwide CDs contained 29 options that paid at least 5.25%. Today, that number is a new high of 31.
The top rate for any CD is still 5.65%, which is available for a 9-month term.
We’re three business days away from the Fed’s next decision on whether to raise the federal funds rate, which will be announced Wednesday afternoon. It’s widely expected the Fed will hold rates where they are this time, which could mean CDs are at or near peak levels.
Key Takeaways
- The top rate on a nationally available 1-year CD spiked 15 basis points to 5.50% APY.
- There was an even bigger jump (18 basis points) in the rate for the best 5-year CD to 4.95% APY.
- You can now find 31 CDs paying at least 5.25% APY in our daily rankings, up from 29 yesterday.
- The most you can earn on any nationally available CD remains 5.65% APY, offered for 9 months.
- The longest-duration regular CD paying at least 5.00% is a 4-year certificate offering that threshold rate, but if you’ve got $50,000 to deposit, you can lock in that rate for 5 years with a jumbo CD.
| 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 | 5.35% APY | 5.50% APY | +0.15 |
| 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 | 5.00% APY | 5.00% APY | No change |
| 5 years | 4.77% APY | 4.95% APY | +0.18 |
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 five CD terms, but you can do better with standard CDs in the other three terms. So remember to shop every CD type before making a final choice.
Where Are CD Rates Headed This Year?
CD rates are very directly linked to the federal funds rate, with each Fed move generally driving CD rates in the same direction. But while today’s CD rates are already at their highest levels since 2007, whether they’ve peaked or will climb higher depends on what the Federal Reserve decides to do during its next meeting, which will conclude on June 14.
Over the past 15 months, the Fed has been on a campaign to combat decades-high inflation with aggressive increases totaling 4.25% in 2022, and three 2023 increases to-date totaling another 0.75%. That ascent has been a boon for CD shoppers, as well as those stashing cash in high-yield savings or money market accounts.
Fed May Pause Rate Hikes
Market watchers have been closely monitoring financial and economic indicators over the last several weeks, as well as comments from Federal Reserve Board members, to predict what the Open Market Committee will decide at its next meeting. In recent weeks, several Fed officials have signaled the central bank may pause rate increases for the time being.
Last week, Fed Governor Philip Jefferson (who is also the nominee for Fed vice chair) and Philadelphia Fed President Patrick Harker both indicated that they think the central bank will skip a rate hike at the June meeting.
But last Friday, fresh jobs data showed that an unexpectedly high number of jobs were added in May, which could increase inflationary pressure. Another monthly inflation report will be released Tuesday morning, giving the Fed another read on how much impact its rate hikes have had so far on taming inflation.
All of this information has 71% of federal funds futures traders predicting a June rate pause. However, it’s being viewed as more of a skip than a pause, with 69.4% of traders currently predicting a Fed increase at the July 26 meeting.
Whatever the rate-setting committee announces next week or next month, CD rates are expected to follow suit, plateauing if the Fed pauses, or rising further if it announces another increase. But since CD rates are already at their highest levels since 2007, locking in a top-paying certificate now would still secure an excellent rate that will pay dividends far down the road.
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-9-2023-7510513?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo