Top CD rates today: September 24, 2024 | Up to 5.15% APY
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Key takeaways
- Today's highest CD rate across terms is 5.15% APY, offered on a three-month term.
- In addition to choosing a CD based on APY, be sure to pick a term that suits your financial goals.
- National averages are significantly lower than top rates, so it pays to shop around.
Opening a fixed-rate certificate of deposit (CD) today should give you peace of mind that your savings will continue to earn the same annual percentage yield (APY) should rates continue to retreat. APYs on competitive CDs have been decreasing gradually this year, and they've continued to drop since the Federal Reserve lowered the federal funds rate on Sept. 18 to a range of a range of 4.75-5 percent.
As of today, the top APY across CD terms is 5.15 percent, which is available on a three-month term from America First Credit Union and requires a minimum deposit of $500. Rates of 5 percent APY or higher can still be found on terms of up to nine months, while top APYs between 4.20 percent and 4.90 percent are offered on various longer terms of up to five years.
The table below shows top CD rates for the most common terms, as well as national averages and the amount you can earn in interest with a $5,000 deposit.
Today's best 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 | 5.15% | 1.31% | $63 |
6-month | Bank5 Connect | 5.05% | 1.78% | $125 |
9-month | America First Credit Union | 5.00% | N/A | $186 |
1-year | Bread Savings | 4.90% | 1.80% | $245 |
18-month | TAB Bank | 4.40% | 1.89% | $334 |
2-year | Salem Five Direct | 4.25% | 1.52% | $434 |
3-year | Schools First Federal Credit Union | 4.20% | 1.43% | $657 |
4-year | Schools First Federal Credit Union | 4.20% | 1.48% | $894 |
5-year | Schools First Federal Credit Union | 4.35% | 1.45% | $1,186 |
Note: Annual percentage yields (APYs) shown are as of September 24, 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.
When is a CD a good idea?
A CD can be a good option when you find one with a competitive rate and you can afford to lock in the money for the entire term. Most CDs charge an early withdrawal penalty for taking out the money before the maturity date. An upside to such a penalty structure is you’ll be less tempted to withdraw the money early and use it for impulse purchases.
What the current interest rate environment means for CDs
Recent federal funds rate changes: The Federal Reserve lowered its benchmark interest rate by 50 basis points on Sept. 18, which brought down the Federal Funds rate target range to 4.75-5 percent. Prior to this rate cut, the Fed had gradually raised rates 11 times in 2022 and 2023, and rates stood at a 23-year high leading up to the latest cut.
What this means for deposit accounts such as CDs: 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. The Fed’s Sept. 18 rate cut of 50 basis points could spur decreases in CD APYs, in addition to decreases that have already taken place in 2024 as banks anticipated Fed rate cuts.
Prior to the September 2024 rate cut, the Fed had held rates steady since July 2023. Meanwhile, top CD APYs peaked in late 2023 and have since been decreasing gradually, as illustrated below.
How inflation factors in
After holding its key benchmark rate steady since July 2023 to combat high inflation, officials cut the federal funds rate by 50 basis points on Sept. 18. The rate cut comes at a time when the consumer price index (CPI), a measure of inflation, has decreased significantly from its decades-high annual rate of 9.1 percent in June 2022. It’s currently at 2.5 percent.
“Inflation is now much closer to our objective, and we have gained greater confidence that inflation is moving sustainably toward 2 percent,” Fed Chair Jerome Powell said in remarks following the Fed’s latest decision to lower rates on Sept. 18.
The current rate of inflation is a significant factor that affects what the Fed decides to do with rates. A decrease in the federal funds rate, say close to or below the current inflation rate of 2.5 percent, can be bad for savers. Namely, it can translate to lower APYs on many CDs and savings accounts. Meanwhile, a fed rate cut can be good for borrowers as interest rates tend to decrease on loans.
Is now still a good time to open a new CD?
This year, top CD rates have been declining gradually due to strong signals from the Fed that it would cut interest rates. Now that the Fed has cut rates by 50 basis points, it remains to be seen how much lower CD APYs will decline, and how soon. Currently, however, top APYs are earning yields well above the rate of inflation.
“Investing in a CD now means potentially being able to lock in high rates prior to a drop in interest rates,” says Kurt Whitesell, a certified financial planner and CFP Board ambassador.
CD FAQs
CD glossary
Here are some terms you’ll likely come across when choosing a CD.
- Add-on CD: A CD that enables you to make additional deposits after your initial investment. This feature affords more flexibility than traditional CDs, which only allow one deposit at the beginning of the term.
- Annual percentage yield (APY): A percentage that indicates how much interest a CD earns in one year, which takes into account the effect of compounding.
- Brokered CD: A type of CD issued by a bank but sold through a brokerage firm or other financial institution.
- CD ladder: An investment strategy that involves purchasing multiple CDs with varying maturity dates to provide liquidity and take advantage of higher rates.
- Early withdrawal penalty: A fee charged if funds are withdrawn from a CD before the maturity date. Penalties often range anywhere from 90 days to 365 days’ worth of interest.
- Grace period: A specific time after the maturity date during which an account holder can make changes to the CD without penalties. A grace period typically ranges from five to 14 days.
- IRA CD: A CD that’s held within an individual retirement account.
- Minimum opening deposit: The lowest amount of money required to open a CD account, which can vary by institution. Some institutions don’t have a minimum deposit requirement.
- No-penalty CD: A type of CD that allows you to withdraw your money without facing a penalty while providing a fixed APY.
- Promotional CD: Also known as a bonus or special CD, it’s a CD with an above average APY. These may be offered by banks and credit unions as a way to obtain new customers.
- Jumbo CD: A CD that has a high minimum balance requirement, typically $100,000, sometimes as low as $95,000. This type of CD tends to offer a higher interest rate than regular CDs with the same term.
- Bump-up CD: Also known as a “raise-your-rate CD,” a bump-up CD provides savers with the option to increase the CD’s APY without having to change its term. Generally, only one rate increase is allowed during its term.
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.