Certificates of deposit (CDs) can be valuable options for savers looking to earn good returns on funds they don’t need presently. CD rates have held tight over the past week but remain much higher than last year’s levels.
Three-month CD rates
Rates on three-month CDs have increased since last week, rising by one basis point to 0.92% today.
Over the past month, rates on three-month CDs have climbed by six basis points.
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 1.37%, from 1.34% last week and 10 basis points from one month ago.
The current top national rate for a 6-month CD is 5.41%, according to the data available from Curinos. But you may be able to find better deals by shopping around.
You’d earn almost $670 in interest if you put $25,000 in a six-month CD with a rate of 5.41%.
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 rising. The national average APY is 1.63%, up three basis points from last week and nine basis points from a month before.
The current national high for a 12-month CD is 5.37%, which would earn roughly $1,340 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 also climbing.
The nationwide average APY stands at 1.53%, a tick higher than a week prior and up four basis points from one month ago.
Right now, the highest national rate for a 24-month CD is 5.15%, which would earn nearly $2,650 on $25,000 in savings.
Three-year CD rates
The national average APY for a three-year CD stands at 1.48%, which is up one basis point from last week and up four basis points from a month ago.
The highest rate was 5.63%, which would net almost $4,465 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 July 6, 2023, the national average interest rate for a 12-month CD sat at 1.63% 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.
