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Best available rates across different account types for Thursday, November 30, 2023
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A certificate of deposit is a financial product that allows you to stash away some cash and earn a fixed rate of interest for a set period of time. In exchange for handing over your money for a specified and longer term, you usually earn a higher interest rate. For example, a five-year CD can earn a higher (and guaranteed) rate than a typical savings account while still offering safety.
The average five-year CD yield is 1.43 annual percentage yield (APY), according to Bankrate’s national index survey of banks and thrifts on Nov. 30, 2023, but Bankrate’s team shopped around to find some of the best CD rates available nationwide.
Compare these offers, then calculate how much interest you would earn when your CD matures.
Note: Annual percentage yields (APYs) shown are as of Nov. 30, 2023. Bankrate’s editorial team validates this information regularly, typically biweekly. APYs may vary by region for some products.
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The following accounts can be found at most banks and credit unions. They’re federally insured for up to $250,000 and offer a safe place to put your money while earning interest.
CDs are best for individuals looking for a guaranteed rate of return that’s typically higher than a savings account. In exchange for a higher rate, funds are tied up for a set period of time and early withdrawal penalties may apply.
Checking accounts are best for individuals who want to keep their money safe while still having easy, day-to-day access to their funds. ATM and other transactional fees may apply.
Savings and MMAs are good options for individuals looking to save for shorter-term goals. They’re a safe way to separate your savings from everyday cash, but may require larger minimum balances and have transfer limitations.
After 11 consecutive rate hikes, the Federal Reserve didn’t raise rates for the second time in a row during its November 2023 meeting. While another rate increase this year is uncertain, 94 percent of economists polled by Bankrate believe the Fed may start cutting rates in 2024.
With uncertainties about further rate increases and the possibility of rate cuts in the coming year, it might be an opportune time to think about a long-term investment strategy. Some shorter-term CDs are currently offering higher rates, but a five-year CD can guarantee a high rate for a longer amount of time, and it may be worth considering as part of a CD ladder.
Savers looking for the best CD rates probably want to venture online. Even if a bank is relatively small or not well known, as long as it’s a member of the Federal Deposit Insurance Corporation (FDIC), you can rest easy knowing each depositor (that’s you) is protected up to at least $250,000 per insured bank. At a National Credit Union Administration (NCUA) institution, the standard insurance amount is up to $250,000 per share owner (depositor), per insured credit union, for each ownership category (account type).
One thing to look for, though: ease of use. Banks that make it difficult or time-consuming to deposit and withdraw funds may waste so much of your time that the benefit of a few extra basis points of interest on your savings is lost. (A basis point is 0.01 percent, so 1 percent has 100 basis points.)
For those with a longer financial horizon and no need to access funds at a moment’s notice, a five-year CD can be a great choice. Because they earn a guaranteed rate for the whole term, five-year CDs are suitable for those who want to grow some of their savings over a half-decade, without the volatility associated with stocks or mutual funds.
CDs typically come with penalties for early withdrawal, so they’re best for those who are confident they won’t need to access their funds in the interim. If there’s a chance you’ll need the money for unexpected expenses or opportunities, it might be wise to explore more liquid savings accounts.
Alternatively, you could invest some money in a five-year CD and some in shorter-term CDs to build a CD ladder, ensuring that a portion of your savings will be accessible in the shorter term. A CD ladder staggers maturities and APYs, giving you the opportunity to earn a higher yield and still have access to some cash at set intervals.
Consider these things to help you choose the right CD:
Limited liquidity — CDs don’t provide immediate access to your funds (unlike savings accounts), which could benefit those who may be tempted to otherwise spend their money. A CD can help keep your savings intact. Just be sure you won’t need the money before the CD matures for such things as emergencies or living expenses. It’s also important to understand the early withdrawal penalty that you’d incur if you needed to withdraw your funds sooner.
Safety — CDs from FDIC-insured banks and NCUSIF-backed credit unions are backed by the full faith and credit of the U.S. government up to $250,000.
High returns — Banks generally sometimes provide a higher APY with a five-year CD than you could find in a traditional savings account or in a CD with a shorter maturity.
Wide selection — You can choose from thousands of banks and credit unions to find a CD with the interest rate, maturity date (term) and minimum deposit amount that fits your needs.
Fixed, predictable returns — Once you put your money in a CD, you’re guaranteed a set return at a specified date, which can help you plan your financial goals.
Limited liquidity — The inability to instantly access funds is a drawback for those who may need their money before the CD’s term is up. You’ll typically pay a penalty for making early withdrawals. If you think it’s likely you’ll need this money in less than five years, consider a shorter-term CD or a savings account.
Inflation risk — The money in your CD may lose its purchasing power over time if inflation overtakes your interest gains.
Low relative returns — Other investment options may offer a higher rate of return. But these investments generally involve higher risk, including the chance of losing the principal. If you leave your money in the CD for the full term at an FDIC-insured bank and are within FDIC guidelines, your fixed-rate CD will earn that yield. The same is true for NCUSIF-backed credit unions.
Reinvestment risk — When you park your money in a five-year CD, it’s a long wait before you can tap those funds. If interest rates rise in the meantime, you could miss out on investing in a higher-rate CD.
Traditionally, longer-term CD rates have been higher than shorter-term ones. This isn’t always the case, however. A yield-curve inversion is what happens when short-term rates are actually higher than long-term ones. Whether it applies to Treasurys or CDs, when yield curves invert, it’s an indicator that investors are expecting a downturn in the economy.
Currently, a yield-curve inversion is in place when it comes to average CD yields, which are as follows, based on Bankrate data for Nov. 30, 2023:
When you’re in the market for a new CD and a yield curve inversion is in place, it’s important to look at all CD terms instead of assuming longer terms will earn more favorable APYs than shorter ones.
Think of a CD as a higher-paying savings account that’s stashed in a safe with a time lock. But unlike a savings account with a variable annual percentage yield (APY), the yield on a CD is fixed and won’t change during the term — in this case, five years. At the end of the term, you can renew the CD or shop around for another one, potentially with a higher yield, if the interest rate environment has improved. After a CD’s maturity date, it likely will renew automatically after a grace period, typically within seven to 10 days.
CDs are a safe place for your money since they typically earn a fixed rate of return. Unlike savings accounts with variable APYs, there’s no risk of the CD’s rate dropping over time. Thanks to a CD’s guaranteed APY, you’ll be able to calculate upfront how much money you’ll have in the account when it matures.
What’s more, when a CD is with an institution protected by federal deposit insurance, your funds are insured by the FDIC with a bank and the NCUA with a credit union. With a federally insured bank, the standard deposit insurance coverage limit is $250,000 per depositor, per FDIC bank, per ownership category. The coverage limits for CDs at NCUA credit unions are the same.
There are two main factors that determine whether a five-year CD makes sense for you: how soon you need your money and whether you’re earning a competitive APY.
The length of time is important because you want to make sure that you don’t incur an early withdrawal penalty. You also want to be aware of inflation and purchase a CD that is earning a yield that can keep up.
A five-year CD could lose value if you incur an early withdrawal penalty, which could eat into your principal amount. But if you keep the five-year CD for the full term, you will earn the stated interest — assuming the product you’re in is a fixed-rate CD.
Each depositor is insured to at least $250,000 per FDIC-insured bank. The standard share insurance amount is $250,000 per share owner, per insured credit union, for each account type at NCUA institutions.
At Bankrate, we strive to help you make smarter financial decisions. We follow strict guidelines to ensure that our editorial content is unbiased and not influenced by advertisers. Our editorial team receives no direct compensation from advertisers and our content is thoroughly fact-checked to ensure accuracy.
Bankrate regularly surveys around 70 widely available financial institutions, made up of the biggest banks and credit unions, as well as a number of popular online banks.
To find the best CDs, our editorial team analyzes various factors, such as: annual percentage yield (APY), the minimum needed to earn that APY (or to open the CD) and whether or not it is broadly available. All of the accounts on this page are insured by the Federal Deposit Insurance Corp. or the National Credit Union Share Insurance Fund.
When selecting the best CD for you, consider the purpose of the money and when you’ll need access to these funds to help you avoid early withdrawal penalties.
These financial institutions are featured in our CD rate research: Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank5 Connect, Bank of America, Barclays, Bask Bank, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO, Bread Financial (formerly Comenity Direct), BrioDirect, Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank (Rhode Island), Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, Emigrant Direct, Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, Marcus by Goldman Sachs, Morgan Stanley Private Bank, Huntington National Bank, Investors Bank, KeyBank, Limelight Bank, Live Oak Bank, M&T Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, PenFed Credit Union, PNC Bank, Popular Direct, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, State Employees’ Credit Union, Suncoast Credit Union, Synchrony Bank, TD Bank, TIAA Bank, Truist Bank, UFB Direct, U.S. Bank, USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.