What Is the Best CD Term Right Now?

If you’re looking to maximize your savings and lock in a high interest rate in a certificate of deposit (CD), you’re likely shopping around for the best CD term to buy right now. The answer might be the term with the highest rate—currently a 9-month CD paying 5.65% APY—or it might be a longer term with a slightly lower rate such as a 2-year CD paying 5.25% APY. It also depends on how much you want to deposit and how long you’re willing to wait while your CD matures. 

While there are CDs offering higher interest rates between 5.45% and 5.65% for 6-month, 1-year, and 18-month terms, letting your money grow in a CD for a longer time could allow you to earn more interest. 

The Best CD Term to Get Right Now

The Federal Reserve has raised interest rates 10 times since March 2022 to fight inflation, which has caused rates on savings accounts to climb higher and has made CDs a popular choice for those looking to maximize their savings with a higher rate of return.

Right now, the best 6-month CD offers the highest rate available in the U.S., at 5.65% APY for a 9-month term. However, if you’re OK with letting your money sit in a CD until June 2026, you could earn more interest with a longer-term CD.

For example, if you put $10,000 into a 3-year CD with a 5.13% APY, you could earn over $1,600 in interest at the end of the term. To compare, if you put the same $10,000 in the top rate of 5.65% for 9 months, you would earn about $420 in interest at the end of the term.

Plus, the Fed did not raise interest rates in its most recent meeting, and rates are expected to peak and drop later this year. So locking in a higher interest rate now means you can hold on to that rate for a few years, regardless of what the Fed does. 

Putting your money in a CD with a longer term could result in more interest earned, but it depends on your financial situation and how long you’re comfortable leaving your money in a CD without touching it. Right now, there are CD rates of 5.00% or higher for 2-, 3-, and 4-year terms. 

If you think you’ll need your money sooner, or want more flexibility on withdrawals, the best high-yield savings accounts are currently offering rates over 5.00% APY. 

CD Investing Strategies 

Stashing your money in a CD is fairly simple and guarantees a risk-free rate of return, unlike investing in stocks or bonds. Depending on the amount of money you want to invest and the time horizon that makes the most sense for your finances, there are different CD options available. Here are some basic strategies for different types of investors. 

Choosing a Single Term 

If you want to lock in the highest rate available for a set period of time, a single-term CD can be a good option if the term fits your time horizon. In the current high-interest rate environment, choosing a single 1-year, 2-year, or 3-year term would allow your money to accrue interest at a higher rate for a longer period of time. 

CD Laddering 

If you have a lot of funds to invest, and you want to have a variety of CDs that allow you to have short-term flexibility and lock in a longer-term rate, you may want to consider CD laddering as your strategy. 

For example, if you have $5,000 to invest in a CD, you can use the CD laddering model to invest $1,000 each in a 1-year, 2-year, 3-year, 4-year, and 5-year CD. When your first 1-year CD matures, you can take the cash from that and move it to a 2-year CD, and so on. This way, your savings will continue to grow thanks to continuous interest compounding, and you’ll have access to your money more often as each CD matures. 

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.