Whatever the weather where you are, it’s a sunny day for CD shoppers. First, there’s a new option paying the industry-leading rate of 5.75% APY—and with a longer term than yesterday’s solo leader. Not only that, but four more CDs came on the market this morning paying a “Benchmark Leader” rate of at least 5.50% APY.
Now sharing the crown for the best CD rate across all terms is INOVA Federal Credit Union, paying 5.75% APY on a 14-month certificate. The same top rate can still be had from Andrews Federal Credit Union, though on a shorter 9-month term.
Key Takeaways
- A second CD is now paying 5.75% APY—the top rate across terms in our daily ranking of the best CDs—offering you the chance to lock in that record rate for either 9 or 14 months.
- Our “Benchmark Leaders” group of CDs paying at least 5.50% APY jumped by five options today, boosting the count to 21 certificates.
- The longest term on which you can earn 5.00% or more is the top 3-year certificate, paying 5.13% APY, or if you have a jumbo-sized deposit, you can earn 5.12% APY for four years.
- The credit unions included in our CD rankings are available nationwide and are easy to join.
- The Federal Reserve won’t meet again on interest rates for six weeks, and it’s unknown whether or not they’ll push the federal funds rate—and therefore CD rates—any higher this year.
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.
If you want to enjoy one of today’s high rates for an extended period, you have two long-term options that earn at least 5.00%. You can score 5.13% APY with the leader in our best 3-year CDs ranking, or if you have at least $100,000 to deposit in a jumbo CD, you can stretch that to four years for a comparable rate of 5.12% APY.
CD SHOPPER TIP
If you think you need to stick with a bank CD because becoming a credit union member seems like too much trouble, think again. The credit unions we include in our rankings are open to anyone nationwide and are easy to join. Though some require a donation to an affiliated nonprofit organization, the required amount is generally modest, and some require no donation or cost at all. The process for opening an account at a credit union is also the same type of process as opening an account at a new bank.
Beware
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. Though today’s best jumbo offers, which typically require a deposit of $100,000 or more, beat the best standard rates in four CD terms, in the other four terms you can do just as well or better with a standard CD. So always be sure to shop every certificate type before making a final decision.
Will CD Rates Climb Higher This Year?
CD rates are already at record levels, but it’s possible they could edge higher still. That’s because the Federal Reserve announced another 0.25% increase in the federal funds rate on July 26, and it will hold at that level until at least September 20. That matters because the central bank’s benchmark rate is a direct driver of the yields 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, making 11 hikes to the fed funds rate over the past 12 meetings. With the latest bump, the cumulative increase totals 5.25% and brings the fed funds rate to its highest level since 2001. That’s created excellent conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
The Fed’s official July announcement provided no strong indications on whether it will raise its benchmark rate even higher this year. The written statement simply reiterated the Fed’s commitment to bring inflation back down to its target level of 2%.
In his post-announcement press conference, Federal Reserve Chairman Jerome Powell indicated that the rate-setting committee has not made any decisions yet on whether to raise rates again in 2023, or if so, what timing or pace any increases would follow. He specifically stated that both a hike and a pause were possibilities at the next meeting, scheduled for September 19-20.
Over the past few days, three Fed governors have made public remarks about their expectations on whether the committee will raise or hold rates going forward. Two emphasized the need to watch the upcoming data and decide on a course meeting-by-meeting, including the possibility of implementing another increase. But the third indicated that unless something unexpected crops up in the data, he foresees rates being held without any further increases.
For now, it’s reasonable to expect that the latest hike—as well as any potential future increases—will gently nudge CD rates higher. But the impact will likely be small since the Fed’s July move had been nearly certain since June, and many banks and credit unions boosted their rates in advance. Once it finally appears the Fed is ready to end its rate-hike campaign for good, that will be the signal that CD rates have reached their peak.
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-new-5-75-leader-unveiled-plus-four-more-top-tier-options-7571537?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo