It was a good news/bad news day for CD shoppers. In the plus column, three more CDs paying at least 5.35% APY joined the ranks, raising that count to an eye-popping three dozen. In addition, a new option exists to earn the industry-leading rate of 5.75% APY.
On the flip side, the previous 5.75% APY leader has been taken off the market. Now instead of scoring that top nationwide rate for 14 months, you can only earn it for 9 months, with a new certificate from Andrews Federal Credit Union.
Key Takeaways
- The number of options in our daily ranking of the best CDs that pay 5.35% APY or more rose to 36 today, up from 33 yesterday and 27 a week ago.
- The highest nationally available rate across all CD terms remains 5.75% APY, but it’s now available for just 9 months, instead of the previously offered 14 months.
- The longest duration on which you can earn at least 5.00% APY is 30 months, paying a rate of 5.25% APY. If you have a jumbo-sized deposit, however, you can earn 5.12% for 4 years.
- The Federal Reserve announced another rate hike yesterday, raising its benchmark rate to the highest level in 22 years. Though many banks and credit unions have already boosted their CD rates in anticipation, others could still push rates higher in the coming weeks.
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.
For those looking for a top rate but wanting to stretch it out longer than the 9 months available with the current market leader, you can still earn 5.70% for 18 months with USAlliance Financial, the previous industry leader across terms.
Still not long enough? A rate of 5.25% is available on a 30-month option. And if you have a deposit of at least $100,000, you can stretch your time horizon on a certificate above 5.00% to four years, with a rate of 5.12% APY.
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, beat the best standard rates in five CD terms, but you can do just as well or better with standard CDs in the other three. So always be sure to shop every CD type before making a final decision.
Where Are CD Rates Headed This Year?
Though CD rates are already at record levels, it’s possible they could climb a bit higher. That’s because the Federal Reserve yesterday announced another quarter-point increase in the federal funds rate. That matters because the fed funds 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 with 11 hikes to its benchmark rate over the past 12 meetings. With today’s latest bump, the cumulative increase so far totals 5.25%, rising to its highest level since 2001. That’s created a heyday for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
Yesterday’s announcement provided no strong indications on whether the Federal Reserve will raise its benchmark rate even higher this year, with the written statement simply reiterating the Fed’s commitment to bringing inflation back down to the Fed’s target level of 2% and assessing what future policy tools will be necessary to do so.
In his post-announcement press conference, Federal Reserve Chairman Jerome Powell indicated that the committee has made no decisions at this time on whether to raise rates again in 2023, or if so, what timing or pace they would follow.
“I would say it is certainly possible that we would raise funds again at the September meeting if the data warranted. And I would also say it’s possible that we would choose to hold steady at that meeting. We’re going to be making careful assessments, as I said, meeting by meeting,” Powell said.
It is reasonable to expect that yesterday’s increase, as well as any potential future hikes, will nudge CD rates a bit higher. But the impact will presumably be small, as the Fed’s July move had been nearly certain since June, and many banks and credit unions moved ahead with rate bumps in anticipation. Once it appears the Fed is ready to halt its rate-hike campaign for good, that will be the signal that CD rates have likely peaked.
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-cds-today-new-high-rate-options-7566728?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo