Today’s best interest rates on CDs, or certificates of deposit, pay up to 5.83%, depending on the CD’s term. Plus, average CD yields keep inching upward. Take a look at the top rates being offered across CDs of various durations.
Related: Compare the Best CD Rates
Highest CD Rates
Current 6-Month CD Rates
If you’d like a CD with a shorter term than one year, today’s best rate on a six-month CD is 5.60%. That’s up from 5.41% a week ago. The current average APY for a six-month CD is 1.43%, compared to 1.41% last week at this time.
APY provides a more accurate portrait of the annual interest you’ll earn with a CD because it factors in compound interest. That’s the interest you earn not only on your deposit (or principal) but also on the interest itself.
Current 1-Year CD Rates
The highest interest rate currently being offered on a one-year CD—one of the most popular CD terms—is 5.60%. If you discover a one-year CD with a rate in that neighborhood, you’re getting a good deal. One week ago, the best rate was a lower 5.60%.
The average APY, or annual percentage yield, on a one-year CD is now 1.69%, up from 1.67% a week ago.
Current 2-Year CD Rates
If you can hold out for two years, 24-month CDs today are being offered at interest rates as high as 5.35% APY. The top rate last week at this time was 5.15%. Two-year CDs now have an average APY of 1.57%, an increase from 1.56% last week.
Current 3-Year CD Rates
CDs with longer terms often have some of the most attractive interest rates and APYs—if you’re willing to keep your money locked away for years.
Within the last week, the highest rate on a three-year CD has been 5.20%, so you’ll want to shop around for that rate or something near it.
Current 5-Year CD Rates
On a five-year CD, the highest rate today is 5.29%, the same as one week ago. APYs are averaging 1.53%, the same as this time last week.
The longer the term, the harsher the early withdrawal penalty. It’s not unusual to lose one full year’s worth of interest or more if you break open a five-year CD too soon. Be absolutely certain you understand the penalty before you make your investment.
Related: CD Interest Rates Forecast: How Good Will They Get?
The Beauty of a CD Ladder
If you want to earn great returns without sacrificing access to your hard-earned cash, a CD ladder might be just what you’re looking for. This simple savings strategy involves spreading your funds across several CDs instead of putting all of your eggs in one basket.
Say you have $5,000 to invest in CDs. Rather than putting that entire amount in a single, high-yield CD, consider putting $1,000 in five CDs with terms ranging from one to five years. As each CD reaches maturity, reinvest the funds into a new five-year CD. If you manage to do this for five years, you’ll then have one, high-yield CD maturing every 12 months.
If you experience financial difficulties during any particular year, you can withdraw your funds from the maturing CD instead of starting a new one. This degree of flexibility can give you peace of mind by providing a steady flow of maturing CDs.
To ensure you get the best CD rates, compare offers from leading banks and credit unions. The current CD landscape is highly competitive, so it’s worth taking time to research your options. Once you identify the financial institution that best suits your needs, start a ladder by splitting your money across several CDs.
Are CDs a Good Deal?
CDs typically pay higher interest than other savings vehicles, even the best high-yield savings accounts and money market accounts. And while they may not offer the kind of enviable returns that are possible with stocks, CDs beat the more attention-getting investments in one regard: They’re one of the safest places to put your money.
Investors lost millions in the 2022 crypto crash, and putting your money into the stock market, real estate or gold and other commodities can be risky, too. But when you buy a certificate of deposit or credit union share certificate from a federally insured financial institution, you can sleep easily with the knowledge that your investment is protected.
The FDIC provides you with up to $250,000 in coverage in the event the bank issuing your CD ever fails. For share certificates purchased from federal credit unions and most state-chartered credit unions, the NCUA insures your money up to the same limit.
Methodology
Curinos determines the average rates for certificates of deposit (CDs) by focusing on specific CDs and excluding others. Certain types, such as promotional offers, relationship-based rates, private, youth, senior, student/minor, affinity, bump-up, no-penalty, callable, variable, step-up, auto transfer, club, gifts, grandfathered, internet-only and IRA CDs are not considered in the calculation.
More From Advisor
- CD Rates Today: August 7, 2023—Earn 5.20% And Up
- CD Rates Today: August 4, 2023—Earn 5.15% And Up
- Where’s The Ceiling For CD Rates? Banks Keep Competing
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
