Certificates of deposit (CDs) can be a great choice if you’re looking for a low-risk investment to generate interest on cash you don’t need to use immediately. Based on Curinos data, CD rates have been relatively stable over the past week even in the midst of a rate hike pause by the Federal Reserve.
Three-month CD rates
Rates on three-month CDs have increased by two basis points to 1.02% APY (as of August 10, 2023). The average APY is up six basis points from a month prior.
The current national high for a three-month CD is 5.83%, which would earn more than $355 in interest with a $25,000 deposit.
Six-month CD rates
By choosing a top-rated six-month CD, you benefit from a winning mix of competitive interest rates and a short-term commitment.
The national average APY for six-month CDs is 1.44%, up slightly from 1.42% last week and 1.38% one month ago.
The current top national rate for a 6-month CD is 5.60%, according to the data available from Curinos. Shopping around can help you find better deals.
With that rate, you’d earn almost $700 in interest if you deposited $25,000.
One-year CD rates
If you’re up for setting aside your savings for a full year, you’ll be able to find even more impressive rates. One-year CDs can give you returns as high as, or even higher than, longer-term options.
Rates on 12-month CDs are increasing. The national average APY is 1.70%, up two basis points from last week and seven basis points from a month before.
The current national high for a 12-month CD is 5.60%, which would earn roughly $1,400 in interest with a $25,000 deposit.
Two-year CD rates
Interest rates on CDs with longer terms, such as those spanning two years, are climbing.
The national average APY is 1.57%, a one basis point increase from last week and three basis points from one month ago.
The current national high for a 24-month CD is 5.35%. By locking in a rate close to this high, you’ll make the most of your returns on this longer-term investment.
If you invest $25,000 in a 24-month CD at the high rate of 5.35%, you’d earn around $2,750 in interest.
Three-year CD rates
The national average APY for a three-year CD stands at 1.51%, the same as last week and up from 1.48% a month ago.
The highest rate was 5.20%, which would net almost $4,105 in interest if you invested $25,000.
Methodology
To establish average certificate of deposit (CD) rates, Curinos focused on CDs intended for personal use. CDs that fall into specific categories are excluded, including 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. The average CD rates quoted above are based on a $25,000 deposit.
Frequently asked questions (FAQs)
In 2022, savers finally experienced some relief with the rise of CD yields.
That trend has largely continued throughout 2023, as the Federal Reserve has continued to raise interest rates to moderate inflation. However, the Fed paused its interest rate policy in its most recent meeting in order to see how the economy responds to such high rates.
You’ll need a few key details to open a CD: your name, address, Social Security number, government-issued ID and phone number. You can open a CD online or in person, but you’ll probably find better rates online. Once you get the green light, you can fund the CD with cash from a linked bank account or one that’s not affiliated with the bank at all.
CD rates change on a regular basis, but the higher the better. As of August 10, 2023, the national average interest rate for a 12-month CD sat at 1.70% APY, according to data from Curinos. But you can find plenty of banks advertising APYs well above this average, especially if you take a look at the top contenders in our ranking of the best CD rates.
A basis point is the term used to describe one hundredth of one percentage point. Therefore, if the yield on a CD increased from 1.50% to 1.60%, it increased by 10 basis points.
