CDs
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Karen Bennett
Written by
Marc Wojno
Edited by
May 28, 2024 / 5 min read
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Key takeaways
- Today's highest CD rate across terms is 5.36% APY, offered for a one-year term.
- Top APYs for many CD terms have declined slightly in recent months since peaking late in 2023.
- Competitive CDs are earning at least three times the national average rates, for most terms.
Many savers who expect the Federal Reserve to lower interest rates this year are locking in a fixed yield now on a certificate of deposit (CD). Opening a CD now ensures you’ll reap the benefit of a high annual percentage yield (APY) for the entire length of the CD’s term.
As we enter the final week of May, top rates hold steady on the nine CD terms Bankrate monitors for this page. Various banks that operate entirely (or primarily) online continue to offer the highest APYs, which are 5 percent or higher on terms of up to 18 months. Top rates on longer terms of up to five years remain slightly lower.
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 | Popular Direct | 5.30% | 1.23% | $65 |
| 6-month | Popular Direct | 5.30% | 1.72% | $131 |
| 9-month | Forbright Bank | 5.30% | N/A | $197 |
| 1-year | CIBC Bank USA | 5.36% | 1.80% | $268 |
| 18-month | TAB Bank | 5.00% | 1.84% | $380 |
| 2-year | TAB Bank | 4.80% | 1.53% | $492 |
| 3-year | First Internet Bank of Indiana | 4.61% | 1.42% | $724 |
| 4-year | First Internet Bank of Indiana | 4.45% | 1.50% | $951 |
| 5-year | First Internet Bank of Indiana | 4.50% | 1.42% | $1,231 |
Note: Annual percentage yields (APYs) shown are as of May 28, 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.
Is a certificate of deposit safe?
If you’re considering opening a CD with a bank, be sure it’s covered by Federal Deposit Insurance Corp. (FDIC). Likewise, if it’s from a credit union, make sure it has National Credit Union Administration (NCUA) insurance. This deposit insurance guarantees your money is safe were the financial institution to fail, as long as the money is within the limits and guidelines.
What the current rate environment means for CDs
In 2022 and 2023, the Federal Reserve raised its benchmark interest rate a total of 11 times, bringing its current target range to a 23-year high of 5.25-5.50 percent. However, the Fed has left rates unchanged for six straight meetings, due to inflation not slowing as quickly as it has in the past.
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. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have since been decreasing gradually.
Is it still a good time to open a CD? “Even though CD yields have pulled back a bit, you’re still able to lock in yields that are well in excess of inflation and do so for multiple years,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The declines will likely accelerate as we get closer to the Fed beginning to cut interest rates, so there is no sense in waiting.”
CD FAQs
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.
