Best CD Rates Today — Interest Rates Remain High Following Fed Decision, Aug.1, 2024 [CNET]

There’s still time to take advantage of a great CD rate, but the clock is ticking.

To no one’s surprise, the Federal Reserve is leaving the federal funds rate where it is for now. That means the top CD rates will remain high for the time being. With inflation finally showing signs of cooling, experts expect the Fed to start cutting rates as soon as September. 

Today’s top CDs offer annual percentage yields, or APYs, as high as 5.35% — more than three times the national average for some terms. With several banks already lowering rates across CD terms, time is running out to maximize your earnings. Since your rate is locked in when you open a CD, investing in one now can protect you from anticipated rate cuts.  

Here’s where you can find the top APYs following yesterday’s Fed decision.

Today’s best CD rates

Here are some of the top rates available on today’s best CDs and how much you could earn by depositing $5,000 right now:

Term	Highest APY	Bank	Estimated earnings
6 months	5.30%	Bask Bank, CommunityWide Federal Credit Union	$130.79
1 year	5.35%	NexBank	$267.50
3 years	4.65%	MYSB Direct	$730.44
5 years	4.75%	BMO Alto	$1,305.80

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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.

How Fed decisions impact CD rates 

The Fed doesn’t directly set CD interest rates, but its decisions definitely have ripple effects. 

The Fed regularly adjusts this rate to stabilize the economy, which impacts where banks set APYs for their consumer products like savings accounts and CDs. Since the federal funds rate determines how much it costs banks to borrow and lend money to each other, banks tend to follow the Fed’s lead — when it raises the federal funds rate, banks raise their APYs, and vice versa. 

Beginning in March 2022, the Fed raised the federal funds rate 11 times to combat record-high inflation, and CD rates took off. As inflation began to show signs of cooling, the Fed elected to leave the federal funds rate at its target range of 5.25% to 5.5% at its September 2023 meeting, and every meeting since then. As a result, APYs plateaued for months, then began falling as experts predicted at least one rate cut by the end of 2024.

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

Term	CNET average APY	Weekly change	Average FDIC rate
6 months	4.69%	-1.68%	1.81%
1 year	4.92%	-0.40%	1.85%
3 years	4.11%	No change	1.44%
5 years	3.98%	No change	1.43%

The Fed’s latest rate pause has kept APYs steady for now. With a rate cut expected before the close of 2024, now’s the time to open a CD. 

We’re already seeing banks drop APYs across CD terms in anticipation of future cuts. With Fed rate cuts on the horizon, this trend is likely to continue. So, the sooner you lock in a high APY, the greater your earning potential could be.

Things to consider before choosing a CD account

A competitive APY is important, but there are other things you should consider when comparing CDs to get the best product for your needs:

• When you’ll need your money: Early withdrawal penalties can eat into your interest earnings. So, be sure to choose a term that fits your savings timeline. 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 bank or credit union 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 the bank. 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.