Best CD Rates Today — APYs Top 5% Ahead of Inflation Data, July 9, 2024 [CNET]

The sooner you snag a great rate, the higher your earning potential could be.

Certificate of deposit rates remain attractive, but it’s only a matter of time before they start dropping. While inflation hasn’t cooled as quickly as the Federal Reserve had hoped, this week’s inflation report will shine a light on where it stands currently. If the Fed is happy with what it sees, it could announce its first rate cut in years at its next meeting.

Today’s top CDs offer annual percentage yields, or APYs, up to 5.35% — more than three times the national average for some terms. And since your rate is locked in when you open a CD, opening one today can shield your earnings from rate cuts and maximize your earning potential.

Experts recommend comparing rates before opening a CD account to get the best APY possible. Enter your information below to get CNET’s partners’ best rate for your area.

Today’s best CD rates

Here are some of the top CD rates available right now and how much you could earn by depositing $5,000 right now:

Term	Highest APY	Bank	Estimated earnings
6 months	5.35%	Bask Bank	$132.01
1 year	5.36%	CFG Bank	$268.00
3 years	4.70%	MYSB Direct	$738.65
5 years	4.80%	BMO Alto	$1,320.86

Why CD rates change

CD rates are significantly impacted by where the Fed sets the federal funds rate, which determines how much it costs banks to borrow and lend money to each other. When the Fed raises this rate, banks tend to raise APYs on consumer products like savings accounts and CDs to boost their cash reserves and stay competitive. When the Fed cuts this rate, APYs on these products drop, too.

Beginning in March 2022, the Fed raised the federal funds rate 11 times to combat record-high inflation, and CD rates skyrocketed, with some accounts offering APYs over 5.5% heading into fall 2023. But as inflation began to show signs of cooling, the Fed paused rates at its September 2023 meeting — and every meeting since then. As a result, CD rates plateaued and then began dropping as experts predicted rate cuts in the second half of 2024.

What’s next for CD rates?

CD rates have held relatively steady as banks awaited and then responded to the Fed’s June decision to pause rates for the seventh consecutive time.

Here’s where CD rates stand compared to last week:

Term	CNET average APY	Weekly change*	Average FDIC rate
6 months	4.78%	No change	1.81%
1 year	4.95%	-0.20%	1.86%
3 years	4.12%	No change	1.44%
5 years	3.94%	No change	1.43%

But experts anticipate at least one rate cut later this year, which means today’s CD rates may be the best you’ll get for the remainder of 2024. The timing of Fed cuts depends on where inflation stands when the Fed meets next. The next Consumer Price Index report, which measures inflation rate changes, comes out on July 11.

“The Fed is starting to get the economic data they feel is needed to justify one rate cut for this year,” said Faron Daugs, CFP, founder and CEO at Harrison Wallace Financial Group. “I believe it will be after the election. However, if new data continues to indicate that inflation is easing, we could see a cut at the September meeting. There is a risk of looking too political by doing this in September, but it could just hinge on upcoming data as to the timing of a cut.”

Benefits of opening a CD now

Whenever the Fed begins cutting rates, one thing is certain: Opening a CD today allows you to lock in a high APY and protect your earnings from rate drops when they happen.

But a fixed rate isn’t the only perk you’ll enjoy by opening a CD today.

CDs are insured up to $250,000 per person, per bank, when they’re provided by a bank insured by the Federal Deposit Insurance Corporation or a credit union insured by the National Credit Union Administration. That means your money is safe up to the deposit limits if the bank fails.

In addition, CDs are low-risk. Unlike investments like stocks, you won’t lose your principal deposit or the interest you’ve earned unless you run into early withdrawal penalties — which you can easily avoid by choosing the right term for your needs.

What to look for in a CD account

A competitive APY is important, but there are other things you should consider when comparing CD accounts:

• When you’ll need your money: Early withdrawal penalties can reduce your interest earnings. So, be sure to choose a term that fits your savings timeline. “I recommend whatever term you are comfortable with having locked up as long as you don’t need that money to be liquid for the duration of the term,” said Dana Menard, CFP, founder and lead financial planner at Twin Cities Wealth Strategies. Alternatively, you can select a no-penalty CD, although the APY may not be as high as you’d get with a traditional CD of the same term.
• Minimum deposit requirement: Some CDs require a minimum amount to open an account — typically, $500 to $1,000. Others do not. How much money you have to set aside can help you narrow down your options.
• Fees: Maintenance and other fees can eat into your earnings. Many online banks don’t charge fees because they have lower overhead costs than banks with physical branches. Still, read the fine print for any account you’re evaluating.
• Federal deposit insurance: Make sure any institution you’re considering is an FDIC or NCUA member so your money is protected if the bank fails.
• Customer ratings and reviews: Visit sites like Trustpilot to see what customers are saying about any bank you’re considering. You want a bank that’s responsive, professional and easy to work with.

Methodology

CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We evaluate CDs based on APYs, product offerings, accessibility and customer service.

The current banks included in CNET’s weekly CD averages are: Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MYSB Direct, Quontic, Rising Bank, Synchrony, EverBank, Popular Bank, First Internet Bank of Indiana, America First Federal Credit Union, CommunityWide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America, Connexus Credit Union.