:max_bytes(150000):strip_icc()/JacobWackerhausen-d41611098a9a4f53b3e18efe191383c4.jpg "Top CDs today, August 28, 2024")
Key findings
- One day after the top 3-year bond rate fell, the best 4-year CD rate also fell slightly, from 4.55% to 4.50%.
- You can still earn the nation’s top rate of 5.40% with the 5-month CD from INOVA Federal Credit Union, or lock in 5.35% for 6 months at DR Bank.
- To lock in a rate through 2025, the best 1-year deals pay 5.25%, offered by four institutions. Or you can score a 5.05% rate for 18 months at Federal Savings Bank.
- The longest 5.00% CD is still a 2-year certificate from USAlliance Financial, while you are guaranteed a mid-4% return for 5 years.
- If you’re planning on opening one of today’s best CDs, the sooner the better, because the Fed could cut rates several times this year—an expected rate cut in September is already pushing CD rates down.
Below you will find the rates offered by our partners as well as details from our ranking of the best CDs available nationwide.
Guarantee 5.15% to 5.40% Until 2025
Ahead of the Fed’s widely anticipated rate cuts next month — with more cuts likely in November and December — top CD rates in our national rankings have fallen slightly. We saw a loss in the 4-year maturity today, but the leading shorter-term CD rates held up.
INOVA Federal Credit Union continues to lead the CD market with 5.40% APY for 5 months, but if you want your rate guaranteed for an extra month, you can opt for runner-up DR Bank instead, which will lock in 5.35% for 6 months.
If you want to extend your rate guarantee through 2025, the best 1-year CDs pay 5.25%, and you can choose between three institutions that pay that APY for 12 months or one that offers it for an 11-month term. For an 18-month term, the top yield is 5.15%, but it’s offered for 15 months. This certificate from FedChoice Federal Credit Union would lock in your rate until around Thanksgiving 2025.
Today’s multi-year CDs are also a Smart Lock
Although they offer lower annual percentage yields (APYs) than shorter-term CDs, attractive multi-year CDs are a smart move before the Fed begins cutting its benchmark federal funds rate. That cut is scheduled to begin on Sept. 18 and could continue with further cuts in 2024 and 2025. The downward pressure on interest rates could even continue into 2026.
If you want to lock in your interest rate through at least 2026, the best paying CD offer is Federal Savings Bank’s 5.05% full term of 18 months. Or you could lock in up to 5.00% for 2 years, available at USAlliance Financial. To stretch your interest rate through 2027, the best rate is 4.65% APY, available for 30 months at EFCU Financial.
The top rate today has gotten a little worse on the 4-year term. Instead of the nation-leading rate of 4.55% you could get yesterday, today’s best deal is 4.50%, available from three institutions. You can also get that rate on a 5-year commitment at Pima Federal Credit Union.
Although below peak levels, CDs still promise excellent returns
It’s true that CD yields are no longer at their absolute peak. But they’re still at historic highs. In October, there was a national top rate of 6.50% – just for a few days – and today the top rate is 5.40%. Yet dozens of banks and credit unions are offering 5.00% or more. In fact, a total of 22 offerings among the best national CDs are still paying 5.25% and more.
Compare that to early 2022, before the Federal Reserve began its rapid rate hike campaign. The most you could earn on the very best CDs at any term was between just 0.50% and 1.70% APY.
Jumbo CDs only carry 18-month and 3-year offers
Jumbo CDs require much larger deposits but don’t always offer higher interest rates. Currently, the best jumbo CDs only come in two terms.
Among 18-month certificates, State Department Federal Credit Union’s 15-month jumbo CD pays 5.20%, up from 5.15% for today’s leading rate among standard 18-month certificates. Meanwhile, yesterday’s drop in the leading 3-year standard CD rate made EFCU Financial’s 3-year jumbo rate of 4.75% the winner during the period.
How far – and fast – will CD rates fall in 2024?
As expected, the Federal Reserve left the key interest rate at its current level at its meeting on July 31. But on Friday, Fed Chairman Jerome Powell signaled at the Fed’s annual meeting in Jackson Hole that the central bank was finally ready to cut interest rates. However, he avoided saying how big the rate cuts would be – or how quickly they would come.
“It is time to adjust policy,” Powell said. “The direction is clear, and the timing and pace of rate cuts will depend on upcoming data, the evolving outlook and the allocation of risks.”
According to the CME FedWatch tool, investors currently expect the Fed to cut rates by 0.25 percentage points on September 18, with 60 to 65 percent of respondents expecting the Fed to cut rates by 0.25 percentage points on September 18. The rest expect a larger cut of 0.50 percentage points. By the December 18 meeting, however, a large majority of traders expect the Fed to have cut the benchmark interest rate by at least a full percentage point.
The central bank’s mission to fight inflation led it to raise the benchmark interest rate 11 times between March 2022 and July 2023 – taking the benchmark rate to its highest level in 22 years. The rate hike campaign has been a boon for savers with cash in the bank, as the benchmark rate directly influences the interest rates banks and credit unions pay on CDs. As a result, CD rates hit a 20-year high last fall. Those with money in a high-yield savings account or money market account have also benefited from these historically high rates.
Fed officials are generally cautious not to act prematurely and will likely continue to wait for more reports before making any decisions about changing the benchmark interest rate. But with a September rate cut all but certain — and CD rates likely to be changed without the central bank’s official announcement — you may want to lock in a great CD rate while you can.
Daily rankings of the best CDs and savings accounts
Note that the “peak rates” mentioned here are the highest rates available nationwide, as found by Investopedia in its daily rate research at hundreds of banks and credit unions. This is very different from the national average, which includes all banks that offer a CD with that term, including many large banks that pay a low interest rate. As a result, national averages are always quite low, while the peak rates you can find by comparing prices are often 5, 10, or even 15 times higher.
How we find the best CD rates
Each business day, Investopedia tracks interest rate data from more than 200 banks and credit unions nationwide that offer CDs to their customers, and ranks the highest-interest certificates in each major term on a daily basis. To be eligible for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), the CD’s minimum deposit cannot exceed $25,000, and a stated maximum deposit cannot be less than $5,000.
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, if you don’t live in a certain area or work in a certain type of job), we exclude credit unions whose donation requirement is $40 or more. For more information on how we choose the best rates, see our full methodology.
