Certificates of deposit (CDs) make sense if you’re in need of a low-risk investment that will earn income on cash you don’t need immediately. CD rates held mostly steady over the past week, according to data from Curinos, as the Federal Reserve put a pause on its effort to curb inflation by raising short-term rates.
Three-month CD rates
Rates on three-month CDs have seen no change since this time last week, remaining at 1.18% today.
Over the past month, rates on three-month CDs have climbed marginally.
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
The top six-month CDs can offer the best of both worlds: strong interest rates and a short-term commitment.
The national average APY for six-month CDs is 1.62%, the same as last week and up from 1.59% one month ago.
The current top national rate for a 6-month CD is 5.59%, according to the data available from Curinos. But you may be able to find better deals by shopping around.
You’d earn almost $690 in interest if you put $25,000 in a six-month CD with a rate of 5.59%.
One-year CD rates
If you’re willing to lock away your savings for 12 months, you can snag even better rates. One-year CDs can give you returns as high as, or even higher than, longer-term options.
Rates on 12-month CDs are moving up. The national average APY is 1.86%, up one basis point from last week and three basis points from a month before.
The current national high for a 12-month CD is 5.70%, which would earn around $1,420 in interest with a $25,000 deposit.
Two-year CD rates
Interest rates on CDs with longer terms have remained stable.
The nationwide average APY stands at 1.65%, the same as last week and a month ago.
The current national high for a 24-month CD is 5.51%. 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 5.51%, you’d earn around $2,840 in interest.
Three-year CD rates
The national average APY for a three-year CD stands at 1.57%, which is the same as last week and up from 1.56% a month ago.
The highest rate was 5.50%, which would net almost $4,353 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 December 5, 2023, the national average interest rate for a 12-month CD sat at 1.86% 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.
