Top CD rates today: April 12, 2024 | What to know about CD rate trends now

A certificate of deposit (CD) is a bank account that earns a fixed rate of return in exchange for locking in your funds for the entire term. CD terms often range from three months to five years, although it’s possible to find ones with terms shorter or longer than that. A CD can be a good place to stash money for savings goals, such as a down payment on a house or a new car. When choosing the best CD term, consider when you’ll need access to the money.

As the second week of April comes to a close, the highest APY across CD terms is now 5.36 percent, and it’s offered on a one-year term from CIBC Bank USA. A minimum deposit of $1,000 is required. Top rates haven't changed much so far this month, although the highest one-year term is now slightly higher than it was at the start of April. You’ll find that many shorter terms are earning higher yields than longer ones in the current rate environment.

Bankrate monitors CD rates every weekday, and today’s top rates are listed in the table below, along with national average rates and the amount you’ll earn with $5,000 in a high-yield CD.

Today's top CD rates by term

CD term	Institution offering top APY	Highest APY	National average APY	Estimated earnings on $5,000 with top APY
3-month	America First Credit Union	5.25%	1.21%	$64
6-month	Popular Direct	5.30%	1.68%	$131
9-month	Forbright Bank	5.30%	N/A	$197
1-year	CIBC Bank USA	5.36%	1.74%	$268
18-month	First Internet Bank of Indiana	5.04%	1.81%	$383
2-year	First Internet Bank of Indiana	4.82%	1.51%	$494
3-year	First Internet Bank of Indiana	4.66%	1.41%	$732
4-year	First Internet Bank of Indiana	4.50%	1.48%	$963
5-year	First Internet Bank of Indiana	4.55%	1.41%	$1,246

Note: Annual percentage yields (APYs) shown are as of April 12, 2024. APYs for some products may vary by region.

N/A: Not available; Bankrate doesn’t track national averages for the 9-month CD term due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.

What to look for in a CD

In addition to a CD’s APY, pay attention to factors such as the minimum deposit requirement and the early withdrawal penalty. The required minimum deposit for a CD can range from $0 to $10,000 or more. While you should only commit funds to a CD that you can afford lock in until the CD matures, it’s still helpful to be familiar with the terms of its early withdrawal penalty.

What the current rate environment means for CDs

In 2022 and 2023, the Federal Reserve raised its benchmark interest rate a total of 11 times, bringing its current target range to a 23-year high of 5.25-5.50 percent. However, the Fed has left rates unchanged for the past five straight meetings, due to inflation not slowing as quickly as it once was.

Yields on competitive savings accounts and CDs tend to move in lockstep with the Fed’s interest rate moves. As such, many banks increase their yields when the Fed raises rates, and they lower yields when the Fed drops rates. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have been decreasing gradually ever since then.

Is it still a good time to open a CD? “Even though CD yields have pulled back a bit, you’re still able to lock in yields that are well in excess of inflation and do so for multiple years,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The declines will likely accelerate as we get closer to the Fed beginning to cut interest rates, so there is no sense in waiting.”

CD FAQs

• Is investing in a CD right for me?

  Whether you should invest in a CD depends on your own personal financial situation and goals. A CD offered at a federally insured bank or credit union can be a safe place to park your funds while earning a guaranteed APY. Many savers turn to CDs to lock in a high interest rate if they believe rates will start to decline soon.

  A CD can help you earn interest on money you're saving for a planned purchase. For instance, if you want to buy a house in five years, putting money in a five-year CD can give you a fixed APY on those funds during that term. Likewise, if you plan to take your dream vacation in a couple of years, a two-year CD could be a good place to grow those funds. Avoid an early withdrawal penalty by only committing money to a CD that you won't need access to before the CD matures.

• How is CD interest taxed?

  The IRS treats interest you earn from a CD as taxable income, whether you receive that money in cash or choose to reinvest it. For CDs with terms longer than one year, interest earned must be reported each year on your taxes, even if you don't cash in the CD until it matures.

• How does a CD differ from a savings account?

  Many banks and credit unions offer savings accounts and CDs, and both accounts earn some interest. There are a couple of key differences, however: A savings account generally allows you to withdraw funds any time, while a CD typically charges a penalty if you take out the money before the term ends. This makes a savings account a better place for funds you might need for emergencies.

  Another difference between the two is a savings account usually earns a variable APY that the bank can raise or lower at will, while a fixed-rate CD earns the same APY until it matures. As such, savers often choose to lock some funds in a CD when rates are likely to start falling, while many are apt to stick with a savings account if they believe rates will rise soon.

Research methodology

Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.

In June 2023, Bankrate updated its methodology that determines the national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.