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Want to maximize your earnings with a certificate of deposit? Now’s the time to act. CD rates have been falling steadily since the Federal Reserve cut interest rates on Sept. 18.
The top rate on certificates of deposit we track at CNET fell below 5% annual percentage yield, or APY, last week. You can now earn up to 4.75% APY with today’s best CDs. That’s still more than twice the national average for some terms, but it’s a far cry from the rates we’ve seen over the past couple of years. Experts expect rates will continue to fall in the coming months, so the sooner you open a CD, the higher the APY you’re likely to get — and the greater your earning potential could be.
Read on to see where you can score one of today’s best APYs.
These are some of the highest CD rates today and how much you could earn by depositing $5,000 right now:
CD rates, weekly average
| Term | Last week’s CNET average APY | This week’s CNET average APY | Weekly change |
|---|---|---|---|
| 6 months | 4.39% | 4.37% | -0.45% |
| 1 year | 4.22% | 4.21% | -0.24% |
| 3 years | 3.61% | 3.61% | No change |
| 5 years | 3.51% | 3.51% | No change |
APYs as of Oct. 18, 2024, based on the banks we track at CNET. Earnings are based on APYs and assume interest is compounded annually.
Why you should lock in a high CD rate today
CD rates soared over the past two years as the Fed raised the federal funds rate 11 times in a row starting in March 2022 to fight inflation. This rate affects how much it costs banks to borrow and lend money to each other, so when the Fed raises this rate, banks tend to raise APYs on consumer products like CDs and savings accounts to attract new customers (and their cash). At one point, the top APY for CDs we track hit a whopping 5.65%.
When inflation started to show signs of cooling, the Fed chose to pause rates eight consecutive times beginning in September 2023, and APYs on CDs held relatively steady. But as inflation continued to cool, banks quietly started lowering APYs in anticipation of a Fed rate cut. When this rate cut materialized last month, banks began slashing APYs in earnest. Since the Fed’s September meeting, we’ve seen rates plummet across CD terms.
Here’s where CD rates stand at the start of this week compared to the start of last week:
CD rates, weekly average
| Term | Last week’s CNET average APY | This week’s CNET average APY | Weekly change |
|---|---|---|---|
| 6 months | 4.39% | 4.37% | -0.45% |
| 1 year | 4.22% | 4.21% | -0.24% |
| 3 years | 3.61% | 3.61% | No change |
| 5 years | 3.51% | 3.51% | No change |
APYs and FDIC average as of Oct. 14, 2024. Based on the banks we track at CNET.
*Weekly percentage increase/decrease from Oct. 7 to Oct. 14, 2024.
APYs are likely to continue dropping in the coming months as experts predict at least one more Fed rate cut before the year ends.
“I expect interest rates to continue to fall through the end of this year and 2025,” said Noah Damsky, principal of Marina Wealth Advisors. “The market has been pricing in interest rate cuts for months but was still caught by surprise as the Fed lowered rates by a whopping 0.50% in September. I wouldn’t be surprised if the Fed surprises with deeper rate cuts than the market expects in the next 12 months.”
In other words, if you’ve been thinking of opening a CD, now’s the time to do it before APYs fall further.
What to look for in a CD
A competitive APY is important when comparing CD accounts, but it’s not the only thing you should look at. To find the right account for you, consider these things too:
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When you’ll need your money: Early withdrawal penalties can eat into your interest earnings. So be sure to choose a term that fits your savings timeline. Alternatively, you can select a no-penalty CD, although the APY may not be as high as you’d get with a traditional CD of the same term.
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Minimum deposit requirement: Some CDs require a minimum amount to open an account — typically, $500 to $1,000. Others do not. How much money you have to set aside can help you narrow down your options.
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Fees: Maintenance and other fees can eat into your earnings. Many online banks don’t charge fees because they have lower overhead costs than banks with physical branches. Still, read the fine print for any account you’re evaluating.
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Federal deposit insurance: Make sure any bank or credit union you’re considering is an FDIC or NCUA member so your money is protected if the bank fails.
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Customer ratings and reviews: Visit sites like Trustpilot to see what customers are saying about the bank. You want a bank that’s responsive, professional and easy to work with.
Methodology
CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We evaluate CDs based on APYs, product offerings, accessibility and customer service.
The current banks included in CNET’s weekly CD averages include Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MYSB Direct, Quontic, Rising Bank, Synchrony, EverBank, Popular Bank, First Internet Bank of Indiana, America First Federal Credit Union, CommunityWide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America and Connexus Credit Union.
