Best CD rates for December 2023 (Up to 5.75%)

Best CD rates from top banks

Before opening a certificate of deposit, be sure to read expert advice and tips below to ensure a financially safe decision. Here are Bankrate's top picks for banks with the best CD rates:

At its last meeting on Nov. 1, the Federal Reserve kept interest rates steady in order to further assess the strength of the U.S. economy. The Fed’s Federal Open Market Committee kept its key benchmark, the federal funds rate (which determines how much banks borrow and lend their reserves to each other overnight), at a target range of 5.25 to 5.5 percent. 

Although it’s a bad time to borrow money at these rates, it’s a great time to save as interest rates on savings accounts are at their highest in 22 years. And even though rates remain steady, now is still a good time to consider long-term CDs after the the Fed raised rates 11 times since March 2022.

The Fed’s next meeting to determine whether to raise or lower interest rates is scheduled for Dec. 13. It’s unlikely that the Fed will change rates at that meeting.

“If the Federal Reserve is done raising interest rates, then CD yields have peaked. Whether your time horizon is measured in months or years, think about locking in current CD yields."

Greg McBride, CFA, Bankrate chief financial analyst

Where are CD rates headed in 2024?

CDs are likely to maintain their current levels in January 2024. But CD rates could decrease if the Fed indicates it will start lowering interest rates.

Currently, shorter-term CDs – with terms of six months to 18 months – generally have higher yields than longer-term CDs. But those longer-term CD yields could be peaking soon, if they haven’t already. So locking one in now could be a good decision for long-term money that you want to keep safe in an FDIC-insured bank.

However, most CDs have significant early withdrawal penalties, so consider these when deciding on an account and term.

National average interest rates for CDs

The national average of CD interest rates suggests that shorter term CDs have higher yields than longer-term CDs. With the Fed having raised rates 11 times since March 2022, what goes up might eventually come down. So, getting a long-term CD now could make sense if the Fed lowers rates in the future.

Researching average interest rates provides insight into the CD rate environment and can help in finding a CD with a yield that's much higher than average.

Here are the current average rates as of Dec. 8, 2023, according to Bankrate's most recent survey of institutions:

When you open a CD, selecting a term is an important step. The term is the length of time that the money stays stashed in the account. For example, opening a CD with a one-year term means you’re making a commitment to the bank that you’ll keep your money in the account for one year.

Here’s where you’ll find some of the top yielding CDs by term. (Note: Annual percentage yields (APYs) shown are as of Nov. 27 and Dec. 3, and may vary by region for some products.)

How to choose the best CD for you

CDs are a good option for longer-term goals or for money that you’re comfortable locking away for a set period of time. Follow the steps below to choose the right CD strategy for you:

1. Determine what the money will be earmarked for. Money you may need in the near future, such as for an emergency fund or short-term goals, usually works better in a liquid account such as a high-yield savings account or money market account. A no-penalty CD may also be a good place for money you might need access to before the CD matures. 
2. Figure out when you’ll need the money in the CD and pick a term that aligns with your savings goals. Terms can range from just a few months to several years.
3. Decide whether you prefer a fixed or variable APY. (If you think the Fed has raised rates so many times that rates will decrease in the future, you might want a CD with a fixed APY instead of a savings account with a variable APY.) 
4. Shop around and compare rates. Research banks and credit unions to find the best rates as well as a minimum opening deposit that’s in line with the amount you plan to put in the CD. Generally, rates are highest at online banks, but it’s possible for a brick-and-mortar bank or a credit union to offer a competitive yield.
5. Open the CD and deposit the funds into the account.

Types of CDs

Banks and credit unions offer a wide range of CDs to fit different financial needs. Take some time to consider which type of CD is best for you.

What is a CD and how does it work?

A CD is a type of account offered by banks and credit unions that earns interest on your money for a set period of time. CDs typically pay a fixed rate of return for the duration of the term. 

Sometimes, longer CD terms will earn higher interest rates than shorter terms. No matter the term length, withdrawing your money before the term ends will likely result in an early withdrawal penalty.

Pros and cons of CDs

Before you choose a CD, weigh the pros and cons to ensure you're making the right investment choice for your financial situation.

CDs vs. traditional savings accounts

Savings and money market accounts are more liquid than CDs, meaning the funds you keep in those types of accounts are easier to access without penalties or limitations. This makes savings accounts better for your emergency fund. You could withdraw the savings you’ve placed in a CD, but be prepared to pay a penalty if you take the money out before the CD’s maturity date (unless you’ve purchased a no-penalty CD).

CDs vs. high-yield savings accounts

These days, it’s common enough for banks to offer one-year CDs that pay better APYs than their high-yield savings accounts.

The differences between CDs and high-yield savings accounts are: 

• A high-yield savings account is a liquid account that allows you to withdraw money without a fee, whereas a CD usually imposes an early withdrawal penalty. (A savings account may charge a fee if you exceed a certain number of withdrawals during a monthly statement cycle. It’s also possible for a savings account to have an early closeout fee.)
• High-yield savings accounts generally have variable APYs, while CDs usually have fixed APYs.

CDs vs. money market accounts

The gap between interest rates tied to CDs and savings accounts has narrowed. But CDs are more likely to pay a higher yield than savings accounts or money market accounts.

CDs and money market accounts are deposit products that share some key similarities. Commonly offered by banks and credit unions, both are considered safe as long as they’re held with federally insured institutions. Savers opening a CD or money market account might have to meet higher minimum deposit requirements than they would with a savings account.

Money market accounts offer more liquidity than CDs, though, often providing the ability to write a limited number of checks each month directly out of the account — and some also come with a debit card. These liquidity features aren't something you'll find with CDs.

In exchange for less liquidity, however, CDs typically offer a higher interest rate than money market accounts.

CDs vs. bonds

Investors have a lot to consider when deciding between CDs and bonds. CDs from federally insured financial institutions are covered by the Federal Deposit Insurance Corp. (FDIC) for banks and the National Credit Union Share Insurance Fund (NCUSIF) for credit unions.

CDs typically pay a fixed interest rate, so you know how much you’re earning up front. You’re also guaranteed to receive the same interest rate for the entire term and receive your full principal amount back, as long as you don’t make any premature withdrawals. 

On the other hand, bonds offer more flexibility and the chance to earn a higher yield. A bond is a loan you make to a government or a corporation to receive some interest. You can sell a bond before it matures without getting hit with an early withdrawal penalty, and you may get back more or less than your original investment if interest rates have moved. With municipal bonds, the interest you earn is often exempt from taxes.

There are many different types of bonds, and some are riskier than others. Bonds aren’t protected by FDIC or NCUSIF insurance like CDs are, and the value of your bonds will fluctuate based on what’s happening with interest rates. If interest rates are rising, the price of your bonds will likely fall and vice versa.

Research methodology

Bankrate has been around since 1976. It is a leading publisher of rates and personal finance articles. It is also often cited by some of the most respected and well-known publications and websites. The Bankrate promise is that we strive to help our readers make smarter financial decisions, adhering to strict principles of editorial integrity and transparency.

Bankrate’s editorial team is made up of five banking experts. These experts have researched many banks and at least twice a month go to bank websites to make sure readers stay up to date on the latest rates and bank products.

We select banks that have high annual percentage yields (APYs) and that are popular and broadly available, and we include some of the largest banks.