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Today’s best interest rates on CDs—certificates of deposit—range as high as 5.83%, depending on the CD’s term. Take a look at how CD rates are moving, and see today’s top rates across CDs of various durations.
Related: Compare the Best CD Rates
Highest CD Rates Today
A CD is similar to a savings account, but the interest rate is fixed—not variable. The other major difference is that you’ll typically only earn interest on a CD account if you refrain from withdrawing funds during the term. That term could range from a few weeks to several years, depending on the CD you choose.
If you withdraw money from your CD before it “matures” (reaches the end of its term), you’ll likely get hit with steep penalties in the form of reduced interest. For instance, you may forfeit six months’ worth of interest if you withdraw money from a one-year CD before 12 months are up.
If you’re interested in accruing the maximum amount of interest possible, consider long-term CDs, which historically have the highest APYs. But again, long-term CDs are only an option if you’re willing to stash away some cash you won’t be able to touch for years.
Generally, CDs with longer terms carry more severe withdrawal penalties than short-term CDs. For instance, it’s not uncommon to lose a full year’s worth of interest if you transfer funds out of a five-year CD account before the term is over. Therefore, it’s crucial to familiarize yourself with the CD issuer’s penalties before you open your account.
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 1.20%, 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 like a CD with a shorter term than one year, today’s best rate on a six-month CD is 5.59%. That compares with 5.60% a week ago. The current average APY for a six-month CD is 1.62%, compared to 1.60% last week at this time.
APY provides a more accurate view of the annual interest you’ll earn with a CD because it takes into account 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 one-year CD—one of the most popular CD terms—is 5.70%. If you find a 12-month CD with a rate in that vicinity, you’re getting 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 1.85%, up from 1.84% 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?
How to Open a CD
Opening a CD account requires a lump-sum deposit, which you can also think of as an investment. Many CDs and share certificates (the credit union equivalent of CDs) have minimum deposit requirements that must be met. That amount can range from a few hundred to several thousand dollars, depending on the institution.
Once your account is open, your principal begins occurring the fixed interest rate for the entirety of the term. Banks and credit unions generally send you paper or electronic statements displaying how much interest you’ve earned.’
Since the goal is to let your money grow, try not to even think about accessing it if you can help it. But if you do need to crack your CD open, be prepared to pay early withdrawal penalties in the form of interest earned. In rare cases, you may also lose a percentage of your principal to early withdrawal penalties.
Do CDs Cost Anything?
There are no one-time or recurring costs associated with CDs, but you may pay a penalty fee in the form of reduced interest if you withdraw from your CD before it matures. You are required to deposit a minimum amount of cash when you open a CD, but get all of that money back—plus interest—at the end of the CD’s term.
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.
