The Best CD Rates Are Still Very High

Though certificate of deposit (CD) rates have been softening since they climbed to a record of 6.50% in October 2023, today's top CD rates are still historically high. The leading rates per term are holding their ground in a range between 4.82% to 5.70% APY. And a total of 36 nationally available certificates are paying at least 5.50% APY.

These returns are worth locking in before the Federal Reserve decides to lower its benchmark rate, which will put downward pressure on CD rates. While we don't know exactly when the Fed will reduce the federal funds rate, the central bank's Dec. 13 dot plot showed a median prediction among committee members of three rate cuts sometime during calendar year 2024.

Though the highest APYs of 5.50% to 5.70% are available on terms ranging from 3 months to 15 months, long-term CDs are also a smart buy right now. The top-paying 2-year certificate offers 5.39% APY, while you can earn 5.23% on a 3-year CD. The best CD rates for 4-year and 5-year CDs are meanwhile below the 5% mark, but you can still lock in a long-lasting rate as high as 4.89% APY.

While the yields on these longer certificates are lower than CDs with shorter terms, securing one of these returns today means you'll be able to enjoy it until 2026—or even as long as 2029—when rates on high-yield savings accounts and new CDs will have likely fallen.

Top Bank, Credit Union, and Jumbo CD Rates Today

Just beware that jumbo CD rates don't always pay more than standard certificates. Often, you can do just as well—or better—with a standard CD. That's currently the case in five of the eight terms below, so it's smart to shop both certificate types before making a final decision.

Where Are CD Rates Headed This Year?

The Federal Reserve opted to hold rates steady at a 22-year high last month, the third meeting in a row it's done so. The Fed has been aggressively combating decades-high inflation since March 2022, raising the federal funds rate with fast and furious hikes that year and then more moderate increases in 2023.

This has created historically favorable conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.

Though inflation has cooled significantly from its peak, Fed Chair Jerome Powell has made it clear that the rate-setting committee has not taken future rate hikes off the table—and won't do so until they feel assured inflation is moving sustainably lower. Still, as mentioned above, the median prediction among committee members is three rate cuts in 2024, for a total reduction of 0.75%.

However, minutes released from the Fed's Dec. 13 meeting revealed that there is much uncertainty among Fed members on the best timing for lowering rates. And that has been further complicated with two recent data releases. First, the most recent jobs report showed a hotter-than-expected labor market. Then, the latest inflation report showed an unwelcome acceleration in December. Both of these developments could make it harder for the Fed to pull the trigger on the first rate cut.

The central bank's decisions on the federal funds rates have significant implications for CD shoppers and other savers, as banks and credit unions base their deposit rate decisions on the Fed's benchmark rate. As we always caution, trying to predict the Fed's future moves is an uncertain exercise. But for now, it seems CD rates are likely to continue edging down from their record peaks.

How We Find the Best CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD's minimum initial deposit must not exceed $25,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.