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As of today, the best interest rates on CDs—certificates of deposit—pay up to 5.83%, based on certificate term lengths. Here’s an overview of how CD rates are changing, followed by a guide to the current top CD rates across different terms.
Related: Compare the Best CD Rates
Highest CD Rates Today
A CD is a type of savings account that pays a fixed interest rate for a fixed amount of time. When you open a CD account, you agree not to touch your deposit until the CD’s term ends. That could be in six months, one year or five years, depending on the term you’ve chosen. If you follow through, you’ll be rewarded with an amount of interest that’s typically greater than what you’d earn from a standard savings account.
If you withdraw money from your CD account before it “matures” (when it reaches the end of its term), you’ll likely face stiff penalties that may negate some or all of the interest you’d earn. For instance, you could sacrifice up to six months’ worth of interest if you withdraw funds from a one-year CD before it matures.
If you’re looking to earn as much interest as possible, consider opening a longer-term CD. These CDs generally offer the highest interest rates, but they require you to stash your cash for several years.
Early withdrawal penalties typically scale according to the length of the CD term. That means you could lose an entire year’s worth of interest if you withdraw funds from a five-year CD before its maturity. That’s why it’s critical to research any potential penalties prior to making your investment.
Current 3-Month CD Rates
For short-term savings goals, three-month CDs might make sense. The current average rate on a three-month CD sits at 1.21%, but the highest rate is 5.83%. Last week, three-month CDs were earning 1.20% on average.
Current 6-Month CD Rates
If you’d prefer a CD with a shorter term than one year, today’s best rate on a six-month CD is 5.59%. That’s unchanged from a week ago. The current average APY for a six-month CD is 1.62%, the same as last week at this time.
APY provides a more accurate view 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 in the account.
Current 1-Year CD Rates
The highest interest rate currently being offered on a 12-month CD—one of the most popular CD terms—is 5.70%. If you land a one-year CD with a rate in that vicinity, you’ve found a good deal. One week ago, the best rate was the same.
The average APY, or annual percentage yield, on a one-year CD is now 1.86%, up from 1.85% 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 5.51%. The top rate last week at this time was a similar 5.51%. Two-year CDs now have an average APY of 1.65%. That’s the same as last week at this time.
Current 3-Year CD Rates
CDs with longer terms tend to have some of the most attractive interest rates and APYs—if you’re willing to keep your money locked away for years.
Today’s highest rate on a three-year CD is 5.50%, so you’ll want to shop around for that rate or something near it. Last week at this time, the best rate on a three-year CD was also 5.50%.
Current 5-Year CD Rates
On a five-year CD, the highest rate today is 5.20%. APYs are averaging 1.58%, 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?
Building a CD Ladder
Want to earn higher yield, but wary of keeping your money chained up for years? A CD ladder can help you earn good returns and make your investment feel more liquid.
You build a ladder by investing your money in multiple CDs with terms of different lengths. You might buy a one-year CD, a two-year CD, a three-year CD, a four-year CD and a five-year CD. As each of the shorter-term CDs matures, you replace it with a new five-year CD.
Follow this plan, and in a few years you’ll have one better-yielding five-year CD maturing each year. If you’re ever having a bad year, you could take some of the cash from the expiring CD and use it to pay bills instead of pouring it all into a fresh CD.
You must comparison shop to track down the best CD rates. Banks and credit unions compete by offering alluring yields to land your business, so shopping around is a must before you purchase any bank CD or credit union share certificate.
Compare CD Rates By Banks
When looking for the best CD rates, try shopping around with both banks and credit unions. If you don’t have a strong preference for one or the other, you’ll probably find yourself leaning toward the highest rates. Credit unions are often more competitive than banks when it comes to CDs, but it’s important to always check for yourself, as this won’t always be the case.
To give you just one example, PenFed Credit Union’s CD Rates currently range from 3.00% to 5.35% while U.S. Bank CD Rates currently range from 0.05% to 0.25%.
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.