Updated: Aug 27, 2024, 12:50pm
The best CD rate is 5.25% on a six-month CommunityWide Federal Credit Union CW Certificate Account, but other financial institutions offer similar rates on CDs with different term lengths.
According to the FDIC, average APYs on CDs range from 0.23% to 1.43%, depending on the term. Our list of the best CDs features rates that are far higher.
Best CD Rates of August 2024
We compared 142 CD and certificate accounts at 84 nationally available banks and credit unions to find some of the best CD providers in the U.S. Here’s a summary of our best CDs, organized by the highest annual percentage yield (APY) range.
- Best for 3-Month CDs: EverBank Basic CD — 3.95% APY
- Best for 6-Month CDs: CommunityWide Federal Credit Union CW Certificate Account — 5.25% APY
- Best for 1-Year CDs: Bread Savings Certificate of Deposit — 5.10% APY
- Best for 18-Month CDs: Synchrony Bank Certificates of Deposit — 4.25% APY
- Best For 2-Year CDs: Marcus by Goldman Sachs High-Yield Certificates of Deposit — 4.20% APY
- Best for 3-Year CDs: Quontic Bank Certificate of Deposit — 3.75% APY
- Best for 5-Year CDs: First National Bank of America Certificates of Deposit — 4.17% APY
- Best for 7-Year CDs: PenFed Credit Union Money Market Certificates — 3.00% APY
- Best for 10-Year CDs: Discover® Certificates of Deposit — 3.60% APY
- Best for Jumbo Certificates: Connexus Credit Union Share Certificate — 3.41% to 5.15% APY
- Best for Promotional CDs: Consumers Credit Union Certificate Account — 0.50% to 5.00% APY
- Best for CD Ladders: EverBank Basic CD — 3.65% to 4.95% APY
Annual percentage yields (APYs) and account details are accurate as of August 27, 2024.
Summary of Best CD Rates of August 2024
Other than looking for the highest CD rates, what should I consider when choosing a CD?
Complete Guide To CD Rates
- Highest CD Rates Today
- Promotional CD Rates
- Bank CD Rates
- CD Rates by State
- Are CD Rates Going Up in 2024?
- CD Rates: All You Need To Know
- Pros and Cons of CDs
- How Much Interest Will I Earn on a CD?
- How To Choose a CD
- Is Now a Good Time To Buy a CD?
- How To Maximize Your CD Rate of Return
- Alternatives to Certificates of Deposit
- Methodology
- Frequently Asked Questions (FAQs)
Highest CD Rates Today
The highest CD rates today reach 5.39% APY, but the best rates depending on the term. CD rates are not static, and banks may adjust them up or down to keep pace with changes to benchmark rates. The banks offering the best CD rates can change from day to day.
CD Rates Today
TERM | HIGHEST APY | AVERAGE APY |
---|---|---|
3 Months | 5.39% | 1.32% |
6 Months | 5.26% | 1.88% |
1-Year CD (12 M) | 5.37% | 1.98% |
2-Year CD (24 M) | 4.88% | 1.70% |
3-Year CD (36 M) | 4.67% | 1.62% |
5-Year CD (60 M) | 4.49% | 1.62% |
Jumbo CD | 5.37% | 1.89% |
Promotional CD Rates
Banks and credit unions occasionally offer promotional CD rates to attract new and existing customers to open a CD account. Promotional CDs typically come with term lengths and rates outside of the bank’s traditional term and rate structure. These special CDs operate like a standard CD but offer a higher APY than many of the bank’s other CD offerings. Promotional CD requirements vary between banks and offers, with some requiring a higher opening deposit or carrying special stipulations.
What kind of rates can you earn with a promotional CD? Promotional CDs are typically available for a limited time and vary by bank and offer. Here’s a look at special CD offers currently available.
FINANCIAL INSTITUTION | SPECIAL CD TERM | APY | MINIMUM DEPOSIT |
---|---|---|---|
Wells Fargo | 4 Months | 4.50% | $5,000 |
4-Months Relationship Rate | 4.76% | $5,000 | |
7 Months | 4.25% | $5,000 | |
7-Month Relationship Rate | 4.01% | $5,000 | |
11 Months | 3.75% to 4.01% | $5,000 | |
11-Month Relationship Rate | 3.75% | $5,000 | |
U.S. Bank | 7 Months | 4.50% | $1,000 |
11 Months | up to 4.00% | $1,000 | |
15 Months | 3.75% | $1,000 | |
Navy Federal Credit Union | 12 Months | 4.80% | $50 |
18 Months | 4.50% | $50 | |
24 Months | 4.20% | $50 | |
12-Month Special EasyStart | 4.75% | $50 |
Rates are accurate as of August 27, 2024
Bank CD Rates
Banks can vary greatly in the CD rates they offer, with online banks tending to offer higher rates than national brick-and-mortar banks. Here are some of the current CD rates at top banks:
CD Rates by State
Banks sometimes offer different rates for the same CD term based on your location. The CD rates available may depend on the state where you live and bank.
Are CD Rates Going Up in 2024?
CD rates were on an upward trend last year, but current CD rates have plateaued, and the CD rates forecast suggests they’ve topped out. The Federal Reserve will likely cut rates at least once before the end of the year. This means CD rates may also begin to fall at some point in 2024.
Recent News on Federal Reserve Interest Rate Changes
On June 12, 2024, the FOMC decided to hold rates steady again, keeping the target rate at 5.25% to 5.50%—where it’s been since September of last year. While the Fed has stated that rates will likely be cut this year, it’s unclear when those cuts will begin and how drastic they will be.
CD Rates: All You Need To Know
What Is a Certificate of Deposit?
Certificates of deposit are time deposit accounts. They earn a fixed rate of interest on the money you invest for a fixed period of time. Unlike a savings account, CDs generally don’t allow you to withdraw the principal at any time during the term. If you withdraw money before the maturity date, you’ll often pay an early withdrawal penalty fee.
How Do CDs Work?
CDs lock up your money for a set period. In exchange, the bank or credit union pays an interest rate generally higher than rates found on a savings account. Banks and credit unions offer CDs and certificates in a variety of terms.
Typically, the longer the term, the higher the interest rate. However, recent pandemic-fueled uncertainty in the U.S. economy has caused some banks to price CDs differently, such as paying the same rate for all terms, or paying a higher APY for a shorter term.
How Are CD Rates Determined?
Banks and credit unions often use an index rate, typically the federal funds rate (also known as the “fed rate”), as a base to set rates for all interest-bearing accounts, including CD rates. When the federal funds rate rises, banks and credit unions will generally increase the interest rates on CDs. When the fed funds rate falls, banks will then lower their CD rates. Banks and credit unions also set rates differently for short- and long-term CDs depending on future interest rate projections.
Pros and Cons of CDs
PROS | CONS |
---|---|
Guaranteed returns. CDs come with fixed rates, making it easy to know exactly how much interest you’ll earn over the CD term. | Fixed rates. Fixed rates mean guaranteed returns over the CD term, but that also means you could miss out on potential rate hikes. |
Competitive rates. Banks typically offer higher rates on CDs to reward customers for agreeing to leave their deposits alone for a set period of time. | Inflation. While CDs generally earn great rates among bank accounts, investments like stocks and bonds may yield better long-term returns. |
CD laddering. You can build a CD ladder by opening multiple CD accounts with varying rates and maturity dates. A CD ladder is a technique that keeps more of your money liquid while it still earns interest. | Withdrawal penalties. Most CDs require you to keep your money in the account until the end of the CD term. Withdrawing your funds before then could mean that you’ll pay an early withdrawal fee, eating up the interest earned by the account. |
No monthly fees. CD accounts typically don’t charge a monthly maintenance fee. | Can’t add money. Typically, you can only make one initial deposit with a CD and can’t add money again until your CD matures. |
Acknowledge the trade-offs between risk and reward. CDs offer guaranteed returns and the security of FDIC insurance, making them attractive for those prioritizing stability. However, they come with limitations like early withdrawal penalties, which can impact flexibility. Investors valuing stability may find comfort in CDs, while those with higher risk tolerances might seek more dynamic investment options.
– Michael Hershfield, Founder and CEO of Accrue Savings
How Much Interest Will I Earn on a CD?
The amount of interest you’ll earn on a CD depends on the amount you invest, the term of the CD and the interest rate. The easiest way to estimate how much you could earn on a CD is to use a CD calculator, as the math can get a bit tricky. Here are some examples demonstrating the effects an increased investment and compound interest can have on your bottom line.
OPENING DEPOSIT | APY | TERM | INTEREST EARNED |
---|---|---|---|
$1,000 | 3.50% | 6 months | $17.34 |
$1,000 | 3.50% | 1 year | $35 |
$1,000 | 3.50% | 5 years | $187.68 |
$10,000 | 3.50% | 6 months | $173.49 |
$10,000 | 3.50% | 1 year | $350 |
$10,000 | 3.50% | 5 years | $1,876.86 |
A CD ladder is one savings strategy that can help you earn more interest while maintaining liquidity. It involves opening several certificates of deposit with varying maturity dates so you can take advantage of higher APYs on longer CD terms while still having access to your funds regularly.
How To Choose a CD
Banks and credit unions offer CDs in a wide range of terms and types. While APY may be the main factor in play when shopping for a CD, there are other factors to consider as well. Here’s what to keep in mind when choosing a CD:
- APY. The best CDs offer annual percentage yields that keep your money safely growing while meeting your savings goals.
- Compounding schedule. The faster your interest compounds, the more money you earn. Look for a CD that compounds daily.
- Minimum deposit. Requirements for minimum deposits vary by bank and credit union. Decide what you can realistically deposit before opening an account.
- Term. Your time horizon is a significant factor in the CD account you choose. CDs are time deposit accounts. Align the CD’s term with when you’ll need access to your money. If you’re interested in using a CD laddering strategy, look for a bank or credit union that carries terms that can help you reach that goal.
- Early withdrawal penalty. You’ll generally have to pay an early withdrawal penalty if you need access to the money in your CD before its maturity date. These penalties vary by institution and term, but they can often be costly—eating up interest earned and occasionally some of your principal investment.
- Broker fees. Unlike traditional CDs, brokered CDs can be traded on a secondary market, so you can cash out your CD at any time by selling it. However, doing so may incur a broker fee—often a flat-rate fee of around $1 per transaction.
- Customer experience. Should a question or problem arise, the institution’s customer service department should be reachable, helpful and responsive.
- Digital banking. Because online institutions tend to offer the best CD rates, it’s important to find banks and credit unions that provide innovative online and mobile banking services.
- Safety. Look for the Federal Deposit Insurance Corporation (FDIC) to insure your account at a bank. In the event of a bank failure, it protects up to $250,000 per depositor, per bank, for each account ownership category. At federal credit unions, and the majority of state-chartered credit unions, the National Credit Union Administration (NCUA) insures your account for the same amount.
Perhaps most importantly, consider your goals. CDs generally work best for short-term financial goals, like saving up for a down payment on a car. The CD you choose should closely match the financial goal you’re trying to meet. For example, if you plan on purchasing a vehicle in a year, consider investing in a one-year CD with a high yield. This allows you to access your money when you need it, and it’s also an excellent way to keep you from dipping into your savings prematurely.
Traditional CDs aren’t your only option. There are a number of different types of CDs available, all of which are beneficial in different ways. If you need more liquidity out of a CD, for example, you may benefit from a no-penalty CD.
Is Now a Good Time To Buy a CD?
If you’re eyeing today’s CD rates, it’s a prime moment to seize the opportunity. Locking in a CD now ensures you’ll continue reaping the benefits of these elevated APYs, even as rates decline. Whether you’re saving for a near-term goal or safeguarding a hefty sum, a CD offers a low-risk, high-reward avenue to grow your savings.
– Michael Hershfield, Founder and CEO of Accrue Savings
The best time to open a CD is when interest rates are nearing or at their peak. Because CDs pay guaranteed interest, buying one when interest rates are high allows you to earn competitive returns for months or years to come. If interest rates fall during your CD term, savings products may stop offering attractive yields, but you’ll still be earning those high APYs.
Regardless of timing, a CD may be a good option when you’re saving for a specific goal, whether it’s a down payment on a house or a new car you’re planning to buy in the next few years.
Thanks to the combination of low risk and high returns, a CD may also be worth considering when you have a large sum of money you want to keep safe. This way, you can earn more than you would with a regular savings account and avoid the value fluctuation of the stock market.
How To Maximize Your CD Rate of Return
CDs can be a useful way to grow savings for the short- and long-term. When opening CD accounts, it’s helpful to know how to make the most of those deposits.
Here are some simple tips for maximizing CD returns.
- Shop around. Comparing options at different banks is a simple way to find the highest CD rates. Online banks tend to offer the best CD rates, but it’s still worth considering traditional banks and credit unions.
- Choose the right term. Leaving money in your CDs until they mature is another smart way to maximize returns. Remember, withdrawing money early can result in the loss of some or all of the interest earned if you’re paying an early withdrawal penalty.
- Consider specialty CDs. As mentioned, bump-up and step-up CDs let you raise your CD rates once or twice during the maturity term. You may consider these CD options to maximize your rate of return if you expect CD rates to rise again.
- Build a CD ladder. Laddering allows you to keep pace with changing CD rates. When a rung in your CD ladder matures, you can deposit it into a new CD with a higher rate to earn even more interest.
Remember, you don’t have to keep your CDs at the same bank. Spreading deposits across accounts at different banks is another way to potentially maximize returns if you’re getting the best CD rates each institution has to offer.
Alternatives to Certificates of Deposit
CDs aren’t always the best option for savings, especially if you need more accessibility or want to maximize your investment long term. Here are some alternative accounts to consider and how they stack up compared to CDs.
While CDs offer security, diversifying across different assets can balance risk and potentially enhance returns over time. By aligning investment decisions with individual needs and objectives, you can harness the benefits of CDs while managing associated trade-offs.
– Michael Hershfield, Founder and CEO of Accrue Savings
CD vs. Savings Account
SAVINGS ACCOUNT | CD | |
---|---|---|
Common term lengths | None | 3 months – 5 years |
FDIC-insured? | Yes | Yes |
Fees for early withdrawal? | No | Yes |
Most CDs earn higher rates than traditional savings accounts, but high-yield savings accounts often come with similar or higher interest rates than CDs. Online banks are a great place to find competitive rates on savings accounts, often with no monthly fees and low minimum balance requirements. Savings accounts carry withdrawal limits, but still offer more flexibility than a standard CD account.
IRA vs. CD
IRA | CD | |
---|---|---|
Common term lengths | None | 3 months – 5 years |
FDIC-insured? | No | Yes |
Fees for early withdrawal? | Yes | Yes |
An IRA is a tax-advantaged investment account. IRAs are often used as retirement vehicles or to complement other retirement accounts. While CDs offer returns over a specific period, IRAs are better for long-term investing. There are penalties on traditional IRAs if you withdraw funds before age 59½, although there are some exceptions. IRAs also carry annual contribution limits. The better choice depends on your savings goals.
Money Market Account vs. CD
MONEY MARKET ACCOUNT | CD | |
---|---|---|
Common term lengths | None | 3 months – 5 years |
FDIC-insured? | Yes | Yes |
Fees for early withdrawal? | No | Yes |
Money market accounts are hybrid bank accounts that offer the benefits of savings and checking accounts. An MMA offers much more flexibility than a CD. It’s also a better option if you want to earn a high APY while keeping your money accessible.
CD vs. Bond
BOND | CD | |
---|---|---|
Common term lengths | 1 year – 30 years | 3 months – 5 years |
FDIC-insured? | No | Yes |
Fees for early withdrawal? | Yes | Yes |
Savings bonds work like loans, except you act as the lender. You’ll earn interest for lending money to the government or a corporation for a set period. Like CDs, bonds come with guaranteed interest returns. Both account types could cost you money if you cash in before the term ends. Also, bonds can lose value if they are sold on the secondary market, especially if interest rates have increased.
When interest rates are high, CDs typically offer better returns. When interest rates are lower, bonds may end up being the better option to earn interest.
Methodology
To create this list, Forbes Advisor analyzed 142 CD and share certificate accounts across 84 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. For the star rating, we ranked each account on 11 data points within the categories of APY, minimums, compound interest schedule, customer experience, digital experience, available terms and overall availability. We also analyzed and ranked each account by individual term.
The following is the weighting assigned to each category:
CD accounts with higher APYs rose to the top of the list. Minimum deposit requirements of $10,000 or higher affected scores negatively. Accounts with daily compounding interest schedules were scored higher than those with monthly or quarterly schedules. To appear on this list, the account must be nationally available.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.
Banks We Monitor
These financial institutions were included in our research for the best CD rates: ableBanking, Affinity Federal Credit Union, Ally Bank, American Express, Axos Bank, Apple Federal Credit Union, Bank of America, Bank5 Connect, BankDirect, BankPurely, BankUnitedDirect, Barclays, Bethpage Federal Credit Union, BrioDirect Banking, Capital One, Charles Schwab Bank, Chase, Chevron Federal Credit Union, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comenity Direct, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Credit Union of Denver, Discover, Dollar Savings Direct, EmigrantDirect, Financial Partners Credit Union, Financial Resources Federal Credit Union, First National Bank of America, Georgia's Own Credit Union, Golden1 Credit Union, Greenwood Credit Union, HSBC Direct, Hughes Federal Credit Union, Ideal Credit Union, iGoBanking, Investors eAccess, Keybank, Kinecta Federal Credit Union, Limelight, Live Oak Bank, MAC Federal Credit Union, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My eBanc, MySavingsDirect, Navy Federal Credit Union, nbkc Bank, Northern Bank Direct, Northpointe Bank, Nuvision Federal Credit Union, Pacific National Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Quontic, Quorum Federal Credit Union, Radius Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Spectrum Federal Credit Union, State Bank of Texas, State Department Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, TIAA Bank, TotalBank, U.S. Bank, USAA, USAlliance Federal Credit Union, Vio Bank, Virtual Bank, Wells Fargo and Truist.
Frequently Asked Questions (FAQs)
Which banks have the best CD rates?
Online banks typically offer the best CD rates, although you can also find competitive rates at credit unions and other financial institutions. The best rates also depend on the length of the CD term. Long-term CDs usually earn higher rates than short-term CDs.
What is a good CD rate?
A good CD rate is one that is highly competitive, but that quality largely depends on market conditions. For instance, a rate that’s low today might be considered high a year from now, or that same rate could be considered low in 12 months if the Federal Reserve raises rates between now and then. Generally, however, a good CD rate is one that’s at least twice as high as the average rate for that term, according to the FDIC.
What is a high-yield certificate of deposit?
A high-yield certificate of deposit (CD) is a CD account that earns an above-average interest rate. The national average rate on one-year CDs is 1.85% as of August 2024, but some of the best one-year CDs offer rates above 4.00%. Some banks may also offer higher promotional interest rates on specific CD terms.
How much do CDs pay?
Payouts on CDs depend on several factors including your initial deposit, the interest rate, CD term length and compounding frequency. The amount you should put into a CD depends on the minimum deposit required to open it and how comfortable you are leaving the funds alone until the CD matures. It may be a good idea to keep some of your savings separate in a high-yield savings account or money market account. In case of emergencies, you can tap into those accounts without having to break into your CD early and potentially pay a penalty.
What are current CD rates?
You can currently find extremely competitive rates on several CDs. Specific rates vary between banks and generally depend on the CD term. Compare the best CD rates above for an idea of what’s currently available.
What is the penalty for early withdrawal of a CD?
Banks typically charge an early withdrawal penalty for pulling funds out of a CD account before it reaches maturity. The penalty varies depending on the bank, term length, and type of CD account. Typically, the penalty equals a percentage of the interest earned on the CD account.
How long can you leave money in a CD?
CDs pay a fixed interest rate on an investment for a fixed term. Once your CD matures, you can choose to reinvest the principal and interest into a new CD. If your bank offers a rollover or renewal feature, your CDs may roll over automatically if you do nothing. Whether you choose to purchase a new CD or roll over your CD investment, current interest rates will apply.
Are CDs taxable?
Any amount of CD interest over $10 is taxable and must be reported to the IRS. The IRS treats CD earnings as income even if you reinvest that money in another CD. At the end of each tax year, the financial institution that issued the CD will send you a 1099-INT statement showing how much interest you earned. Report this amount on your taxes. Even if you don’t receive a form, you are required by the IRS to report interest earned on CDs and other deposit accounts on your federal tax return. Interest is taxable in the year it is received.
How Much Does a $10,000 CD Make in a Year?
Several factors determine how much you earn with a CD. The interest earned on a $10,000 CD in a year depends on the CD rate and compounding frequency. CDs that compound daily earn more than those that compound monthly.
The difference in interest earned on a CD can be significant. For example, a $10,000 CD with a 2.00% APY would make $200 in the first year, while the same CD with a 5.00% APY would earn $500.
Our CD calculator can help you determine how much interest you’ll earn on a fixed-rate CD. It shows the total interest earned and a breakdown of the earning schedule over the course of the CD term.