News on the country’s top-paying certificates of deposit (CDs) was mixed today. On the upside, three more CDs joined the ranks of certificates paying at least 5.25% APY, bringing the number in that tier to 38. In addition, the overall highest rate in our daily rankings of the best nationwide CDs remains 5.65% APY on a 9-month term.
But the market leader in the 1-year term pulled back today, meaning the top 1-year yield is now 5.42% APY, down from 5.50% APY Friday.
Last week, the Federal Reserve met and held the federal funds rate where it is, rather than raise it for the 11th straight time. But it also signaled that it may hike rates further in the coming months. CD rates, which are directly impacted by the fed funds rate, are already at their highest level in almost 16 years, but it’s possible they could inch up a bit more.
Key Takeaways
- The leading rate on a 1-year CD dipped from 5.50% APY Friday to 5.42% APY today.
- The top rate across all terms remains 5.65% APY on a 9-month CD.
- The number of CDs paying 5.25% APY or better climbed from 35 last week to 38 today.
- Though the Fed did not hike rates at its meeting last week, it indicated it may raise rates at one or more future meetings, meaning it’s possible (though not guaranteed) that CD rates could edge higher.
| CD Terms | Friday’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 | 5.42% APY | – 0.08 |
| 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 | 4.85% APY | 4.85% APY | No change |
| 5 years | 4.77% APY | 4.77% APY | No change |
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?
Over the past 15 months, the Fed has been on a campaign to combat decades-high inflation with aggressive increases to the federal funds rate, totaling 4.25% in 2022 and another 0.75% so far in 2023. Because changes to the fed funds rate drive bank deposit rates in the same direction, the Fed’s action has pushed today’s savings and CD rates to their highest levels since 2007.
That’s created a heyday for CD shoppers, as well as people holding cash in high-yield savings or money market accounts. But last week, the Fed decided to hold rates steady for the first time in 15 months.
While the fed funds rate did not change this time around, Fed officials signaled that they may still implement one or two additional rate hikes this year, with their next meeting concluding July 26. Since there is never any guarantee on what the Fed’s future moves will be, it’s possible CDs are already at peak rates, making them a good buy right now. But if the Fed does implement any additional increases, CD rates are likely to move a bit higher than they are 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-june-20-2023-7550295?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo