CD shoppers have improved options to consider over the weekend, thanks to numerous banks and credit unions that unveiled new, higher CD rates today. Among the upticks is a new nation-leading rate on a 2-year CD, which pays 5.27% APY. That’s up from the 5.25% APY that held the top 2-year CD rate spot starting in April.
Also in the good news column are four new offers in our daily ranking of the best CDs that pay at least 5.35% APY. That takes the number of options in that lucrative tier up to 23, after dipping from 20 to 19 earlier this week. And it includes every single certificate in our top 1-year CDs lineup.
The most you can earn with a nationwide CD in any term continues to be 5.65% APY on a 9-month certificate. But if you’d rather lock in a rate of at least 5.00% much further into the future, you may be interested in the leading 3-year CD, which pays 5.13% APY, or the leading 4-year jumbo CD that pays 5.12% APY. You’ll need a deposit of at least $100,000, though, for the jumbo option.
Key Takeaways
- The most you can earn on a nationally available 2-year CD rose today from 5.25% to 5.27% APY.
- Twenty-three CDs in our daily rankings now pay at least 5.35% APY, up from 19 yesterday.
- The highest rate on a nationwide CD in any term remains 5.65% APY for a 9-month option.
- The longest terms for which you can earn at least 5.00% APY continue to be 3 years for a certificate paying 5.13% APY. or 4 years for a jumbo certificate paying 5.12% APY—but that requires a $100,000 deposit.
- The Federal Reserve is overwhelmingly expected to hike the federal funds rate at the end of this month, with additional increases possible later this year. Any further Fed hike will nudge CD rates higher.
| 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 | 5.50% APY | 5.50% APY | No change |
| 18 months | 5.50% APY | 5.50% APY | No change |
| 2 years | 5.25% APY | 5.27% APY | + 0.02 |
| 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 |
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, 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 may rise even higher this year, thanks to widely expected moves by the Federal Reserve, beginning with a quarter-point increase to the federal funds rate late this month. The fed funds rate strongly influences CD rates.
The Federal Reserve has been on a mission since March 2022 to combat decades-high inflation with aggressive fed funds rate increases. Those cumulative increases (they’ve totaled 5.00% in all) have driven today’s savings and CD rates to their highest levels since 2007. This has created a heyday for CD shoppers as well as anyone holding cash in a high-yield savings or money market account.
On June 14, the central bank held its benchmark rate steady for the first time in 11 meetings, in order to better study the impact of previous rate hikes. Minutes from that meeting were released Wednesday, and while they showed that all 11 voting members of the rate-setting committee agreed to the pause, several members pushed for or “could have supported” a proposal to raise rates a quarter point at that meeting because “the labor market remained very tight, momentum in economic activity had been stronger than earlier anticipated, and there were few clear signs that inflation was on a path to return to the committee’s 2% objective over time.”
The minutes and several other indicators, including statements from Fed Chairman Jerome Powell last week, have signaled that two or more rate hikes are possible later this year. And financial markets have already priced in greater than 90% odds that the Fed will implement one of those quarter-point hikes at its meeting scheduled to conclude on July 26. As for post-July, there are several signs that one or two additional hikes could come later in 2023.
As always, however, beware that Fed rate moves are never reliably predictable, as conditions can change quickly, and each rate decision is based on up-to-the-minute economic data and news. What we do know is that if the Fed implements any further rate hikes, it will almost certainly push CD rates higher. But if instead the Fed continues to hold its benchmark rate steady, today’s CDs may already be at or near their peak rates, making them a good buy right now.
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-july-7-2023-7558173?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo