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Top CD rates today: May 2, 2024 | Fed holds rates steady (and what that means for CDs)

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Key takeaways

  • The Federal Reserve decided to hold its key benchmark rate steady on Wednesday. Fed moves have a strong influence on CD yields.
  • Top rates on most CD terms didn't change in April, and they remain high overall.
  • Leading APYs on various CD terms are 5.00% and above, while national average rates are significantly lower than that.

The Federal Reserve announced Wednesday that it will continue to leave rates unchanged, after several months of higher-than-expected inflation. Savers may be left wondering what the latest Fed decision means for interest rates on deposit accounts, including certificates of deposit (CDs).

Yields on competitive CDs tend to move in lockstep with the federal funds rate, so savers may continue to reap the benefits of elevated APYs. “That will literally translate to money in the bank, so to speak, for those who opt for higher yields, which is highly recommended,” says Mark Hamrick, Bankrate senior economic analyst. “The Federal Reserve is essentially doing savers a favor by opting for higher rates in the coming months.”

Locking in a high annual percentage yield (APY) on a CD now means you’ll earn that same rate throughout the entire term, even if APYs on new CDs drop. Bankrate’s table below shows top CD yields across terms from three months to five years.

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 Popular Direct 5.30% 1.21% $65
6-month Popular Direct 5.30% 1.67% $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% 1.80% $383
2-year First Internet Bank of Indiana 4.82% 1.51% $494
3-year First Internet Bank of Indiana 4.66% 1.40% $732
4-year First Internet Bank of Indiana 4.50% 1.47% $963
5-year First Internet Bank of Indiana 4.55% 1.41% $1,246

Note: Annual percentage yields (APYs) shown are as of May 2, 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 did the Federal Reserve do with rates this week?

The Fed chose to hold rates steady on May 1, which marked the sixth rate-setting meeting that rates were left untouched. Rates stand at a 23-year high, and the Fed has kept them unchanged recently due to stubborn inflation. After this week’s meeting, the next Fed meeting is scheduled for June 11-12.

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 five straight meetings, due to inflation not slowing as quickly as it has in the past.

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 federal funds rate drops. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have since been decreasing gradually.

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.”


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.