The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
Yields offered on certificates (CDs) by various banks remain significantly higher than they were just a year ago, thanks to 11 Federal Reserve rate increases since March of 2022. This has made CDs a savings option worth checking out.
When searching for the best interest rate on a widely available CD, you’ll find Forbright Bank at the top of the list. It offers a nine-month CD that earns a 5.75 percent annual percentage yield (APY) and requires a $1,000 minimum deposit.
Earning a similar rate, and not far behind, is a one-year CD from Popular Direct, which pays 5.67 percent and requires a $10,000 minimum deposit.
The guide below lists average rates and competitive ones for various terms, as well as how to find a CD with the best rate.
- You’ll find the current top rate on a nine-month CD that earns a 5.75 percent APY.
- It pays to compare rates, since national averages are far below the most competitive APYs.
- The Fed chose to forgo a rate hike on Nov. 1. The next Fed decision on interest rates is scheduled for Dec. 13.
Today’s CD rates by term
|Highest APY||Institution offering top APY||National average APY|
|6-month CD||5.55%||Bask Bank||N/A|
|9-month CD||5.75%||Forbright Bank||N/A|
|1-year CD||5.67%||Popular Direct||1.75%|
|18-month CD||5.50%||Popular Direct||1.80%|
|2-year CD||5.30%||Popular Direct||1.50%|
|3-year CD||5.00%||Popular Direct||1.41%|
|4-year CD||4.75%||Bread Savings||1.46%|
|5-year CD||4.75%||Bread Savings||1.45%|
* Note: Annual percentage yields (APYs) shown are as of Nov. 21, 2023. APYs for some products may vary by region.
N/A: Not available; Bankrate doesn’t track national averages for the 6-month and 9-month CD terms due to limited available data.
How to find the best CD rates
You’ll often find the best CD rates from online-only banks, such as Barclays Bank, which don’t have the overhead costs of running branches — and which also may offer competitive rates to draw customers away from traditional brick-and-mortar banks. Credit unions, such as Alliant Credit Union, also commonly offer high rates because their profits go back to members. Yields can vary significantly among banks, so it pays to shop around for the best CD rates.
Keep in mind: Most CDs charge a penalty if you withdraw the funds before the term ends, so a liquid savings account is a better place for money you might need on short notice.
Why big banks haven’t increased their interest rates
In an effort to combat inflation, the Federal Reserve has raised interest rates 11 times since March 2022. Many online-only banks and credit unions have followed suit by increasing their CD and savings account rates, which helps them attract new customers. Established brick-and-mortar banks, on the other hand, often don’t feel the need for new deposits, so many keep their rates at near-zero.
When to consider a CD ladder
A CD ladder consists of opening a group of CDs that have staggered maturity dates. The goal is to maximize returns while making cash available at various intervals. When each CD matures and its cash is freed up, you can choose to place it in another CD or invest it elsewhere. Since CD rates are currently higher for shorter-term CDs than longer ones, a ladder would allow you to earn those attractive short-term rates while the longer-term rates could provide stability if we enter a falling-rate environment.
FAQs about CDs
A CD is a deposit 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.
Because a CD typically comes with an early withdrawal penalty, it’s best to only put money into a CD that you won’t need in the meantime for living expenses or emergencies. Money you may need sooner is best kept in a liquid account, such as a high-yield savings account, which provides access to your funds anytime.
Both CDs and share certificates are deposit accounts where your money typically grows at a fixed rate for a set amount of time. The main difference between the two is in the name: CDs are offered from banks, whereas share certificates are offered from credit unions. What’s more, CD earnings are referred to as interest, while share certificate earnings are called dividends.
CDs and share certificates are insured through banks and credit unions, respectively, that are federally insured. For example, banks are insured by the Federal Deposit Insurance Corp. (FDIC), whereas credit unions are insured through the National Credit Union Administration (NCUA). Under such federally insured banks and credit unions, CDs and share certificates are each insured for up to $250,000 per depositor, per insured bank, for each account ownership category.
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.