Rates on the country’s best certificates of deposit (CDs) continue to improve, with the number of options in our daily ranking of the best CDs that pay at least 5.35% jumping to 15 today, up from 13 on Friday.
Yields on the best nationally available CDs have been rising to much lately that we’re shifting our focus to this 5.35% threshold rate instead of the 5.25% rate we were previously reporting on. The count of certificates paying at least 5.25% has ballooned from single digits at the start of May to 42 today, including a climb of seven in just the past week.
The highest rate in any term continues to be 5.65% APY, available for a 9-month term. But if you want to stretch a good rate (at least 5.00%) as far into the future as possible, there’s a 3-year CD that pays 5.13% APY, and a jumbo 4-year CD that pays 5.12% APY—you’ll need a $100,000 deposit for that one.
Key Takeaways
- Fifteen CDs in our daily rankings pay 5.35% APY or better, up from 13 on Friday.
- The best overall rate across terms is still 5.65% APY, available on a 9-month CD.
- If you want to secure a stellar rate far into the future, you can score 5.13% APY on a 3-year certificate or 5.12% on a jumbo 4-year certificate with a $100,000 deposit.
- Though the Fed decided to hold rates steady at its June 14 meeting, it has signaled that it’s likely to raise rates later this year. A bump by the Fed, if it comes, would almost certainly nudge CD rates even higher than today’s record levels.
| 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 | 5.52% APY | 5.52% APY | No change |
| 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 three CD terms, but you can do just as well or better with standard CDs in the other five terms. So remember to shop every CD type before making a final choice.
Where Are CD Rates Headed This Year?
The Federal Reserve has been on a mission for the last 15 months to combat decades-high inflation with aggressive increases to the federal funds rate, which have totaled 5.00% so far. Because deposit rates closely follow the fed funds rate, the Fed’s multiple increases have driven today’s savings and CD rates to their highest levels since 2007, creating a heyday for CD shoppers, as well as anyone holding cash in a high-yield savings or money market account.
At its last meeting, on June 14, the Fed held rates steady for the first time in 11 meetings. But Fed Chair Jerome Powell last Wednesday said that one or two additional rate hikes are still likely this year, and U.S. Federal Reserve Gov. Michelle Bowman echoed that prediction on Thursday. “Although tighter monetary policy has had some effect on economic activity and inflation to date, we have seen core inflation essentially plateau since the fall of 2022.” As a result, she said, she believes “additional policy rate increases will be necessary to bring inflation down to our target over time.”
It’s overwhelmingly expected that any further rate hikes by the Fed would be in minimal 0.25% increments, meaning if one or two more increases arrive, we could see a fed funds rate rise up to 0.50% higher than today. Even a 0.25% increase later this year would almost certainly push CD rates higher.
But a word of caution: There is never any guarantee on what moves the Fed will make, as each rate decision is based on up-to-the-minute economic data and financial news. So while it’s currently probable that the Fed will raise rates further, it’s also still possible the Fed will back away from that plan. If that happened, it would mean today’s CDs are already at or near their peak rates, making them a good buy right now.
The Fed’s next meeting will conclude July 26.
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-26-2023-7553373?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo