Top CD rates held steady today, with the leading 5.79% APY on Climate First Bank’s 8-month CD available for at least another day. The best CD rates across all terms remained unchanged for the third consecutive day.
The second best CD rate today is 5.75%, also offered by Inova Federal Credit Union on an 8 month term. With just a few days left in 2023, locking in the top CD rate could be the right move if the Federal Reserve decides to lower interest rates next year.
key takeaways
– The top CD rate in our daily ranking of the best nationwide CDs remains Climate First Bank’s 8-month CD at 5.79% APY.
– CD rates peaked at 6.50% in October, but today’s top rates are still historically high.
– Only two nationally available CDs pay at least 5.75% APY. Seven weeks ago, we counted 16 CDs that offered 5.75% APY or higher.
– The top rate on a jumbo CD is 5.77%, offered on 6 month and 1 year CD terms.
– The Federal Reserve is expected to cut interest rates in the new year, so CD rates are likely to continue falling.
Below you’ll find special rates available from our partners, followed by our full ranking of the best CDs available nationwide.
The number of CDs paying at least 5.75% reached a historic peak of 18 on November 3. But in the eight weeks since, that number has fallen sharply – now down to just two. Three other CDs pay 5.70% APY on terms of 7 to 14 months.
The highest rates will be available for a period of up to 18 months. But stellar rates can still be achieved on longer terms. The top-paying 2-year certificate offers 5.39% APY, while you can secure 5.23% for a 3-year term. And in 4-year and 5-year terms, you can lock in a long-term rate of up to 5.00% APY.
Although the yields on these longer certificates are lower than those on certificates with shorter terms, it may be a smart move to secure one of today’s record rates for as long as possible, as the current expectation is that interest rates will fall over the next few years. Will fall.
fast facts
When asked in December whether they were choosing certain investments more or less during recent market events, 28% of Investopedia readers said they were leaning into CDs – trailing only the leading choice of money market funds. One percentage point behind. Additionally, 11% of readers said they would open a CD if they had an extra $10,000 to invest, which ranked third behind individual stocks and ETFs.
To view the top 15-20 nationwide rates over any period, click on the desired period length in the top left column.
For anyone with a larger deposit size, the leading jumbo is 5.77% APY, available on My eBanc for a term of 6 months or 1 year.
*Reflects the highest APY offered in each period. To see our list of top-paying CDs for banks, credit unions and jumbo certificates, click on the column headers above.
Note that there are no jumbo CDs Always Pay higher returns than standard certificates. Sometimes you can do just as well—or even better—with a standard CD. This is currently the case for six of the eight conditions above, so it’s smart to shop around for both certificate types before making a final decision.
Where are CD rates going next year?
The Federal Reserve earlier this month opted to keep rates steady at a 22-year high, its third consecutive meeting. The Fed has been aggressively combating decades-high inflation since March last year, raising the federal funds rate with a fast and furious hike in 2022 and then a more moderate increase in 2023.
This has historically created favorable conditions for those buying CDs, as well as anyone holding cash in a high-yield savings or money market account.
Inflation has moderated significantly in recent months, including a slight decline in November. And although Chair Powell said the rate-setting committee is not ruling out the possibility of future rate hikes, she also said in her press conference that Fed members have begun discussing lowering rates.
The Fed’s dot plot shows that no member of the rate-setting committee predicts another rate hike in 2024. Instead, the average expectation is for three rate cuts in 2024, for a total decline of 0.75%.
This has important implications for CD buyers and other savers. Banks and credit unions base their deposit rates on the Fed funds rate. Even talk of a cut means that the wild rise in deposit rates that we saw is likely to end.
“The Fed has virtually made it official that there will be no further rate hikes this cycle,” Robert Frick, corporate economist at Navy Federal Credit Union, said in a statement.
“This is a call to action for savers to lock in the current high CD rates and other rates in safe vehicles like Treasuries,” Frick said. “Those rates will likely remain low from here, and given that they are higher than the inflation rate, savers may still be able to earn real returns.”
As we always caution, trying to predict the Fed’s future rate moves is an uncertain exercise. But for now, it looks like CD rates will continue to retreat from their recent peaks.
Note that the “top rates” quoted here are the highest rates available nationally that Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is very different from the national average, which includes all banks offering CDs with that term, including many of the larger banks that pay much less in interest. Thus, the national average is always quite low, while the top rates you can get by shopping around are often 5, 10, or even 15 times higher.
How We Find the Top CD Rates Today
Each business day, Investopedia tracks rate data from more than 200 banks and credit unions that offer CDs to customers across the country and determines a daily ranking of the top-paying certificates in each major period. To qualify for our list, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the minimum initial deposit amount of the CD 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 (for example, you don’t live in a certain area or have a certain type of Do not work in a job), we exclude credit unions whose donation requirement is $40 or more. Read our full methodology to learn more about how we choose the best rates.
Investopedia / Alice Morgan
Source: www.investopedia.com
