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Currently, the best interest rates on CDs (certificates of deposit) pay 4.50% and higher, based on the CD’s specific term. You can now find 12-month CDs paying 5.00% or more. Below, you’ll find a summary of how CD rates are leaning—plus a guide to the best rates across CDs of various lengths.
Related: Compare the Best CD Rates
Highest CD Rates
Current 6-Month CD Rates
The current average APY for a six-month CD is 1.87%, up from 1.83% last week at this time.
APY provides a more accurate view of the yearly interest you’ll earn with a CD because it factors in compound interest. That’s the interest you earn not only on your deposit (or principal) but also on the interest in the account.
Current 9-Month CD Rates
Nine-month CDs today are being offered at an average APY of 2.50%, the same as a week ago.
Current 1-Year CD Rates
The highest interest rate currently being offered on a 12-month CD—one of the most popular CD terms—is 5.00%. If you land a 12-month CD with a rate in that vicinity, you’re getting a good deal. One week ago, the best rate was a lower 4.88%.
The average APY, or annual percentage yield, on a one-year CD is now 2.40%, up from 2.37% a week ago.
Current 2-Year CD Rates
If you can hold out for two years, 24-month CDs today are being offered at interest rates as high as 4.50% APY. The top rate last week at this time was 4.40%. Two-year CDs now have an average APY of 2.51%, an increase from 2.48% last week.
Current 3-Year CD Rates
CDs with longer terms tend to have some of the most attractive interest rates and APYs—if you’re willing to keep your money locked up for years.
The average APY on a three-year CD is now 2.72%, up from 2.69% a week ago.
Current 5-Year CD Rates
On a five-year CD, the highest rate today is 3.20%. APYs are averaging 2.82%, compared to 2.79% at this time last week.
The longer the term, the harsher the early withdrawal penalty. It’s not unusual to lose one full year’s worth of interest or more if you break open a five-year CD too soon. Be absolutely certain you understand the penalty before you make your investment.
Related: CD Interest Rates Forecast: How Good Will They Get?
Build a CD Ladder
If you want to earn great returns without sacrificing access to your hard-earned cash, a CD ladder might be just what you’re looking for. This simple savings strategy involves spreading your funds across several CDs instead of putting all of your eggs in one basket.
Say you have $5,000 to invest in CDs. Rather than putting that entire amount in a single, high-yield CD, consider putting $1,000 in five CDs with terms ranging from one to five years. As each CD reaches maturity, reinvest the funds into a new five-year CD. If you manage to do this for five years, you’ll then have one, high-yield CD maturing every 12 months.
If you experience financial difficulties during any particular year, you can withdraw your funds from the maturing CD instead of starting a new one. This degree of flexibility can give you peace of mind by providing a steady flow of maturing CDs.
To ensure you get the best CD rates, compare offers from leading banks and credit unions. The current CD landscape is highly competitive, so it’s worth taking time to research your options. Once you identify the financial institution that best suits your needs, start a ladder by splitting your money across several CDs.
Do CDs Cost Anything?
You must fork over funds to open a CD account, but you get all of that money back—plus interest—when the CD reaches maturity. You won’t have to worry about any one-time or recurring fees, but you may sacrifice some of all of the interest you’ve earned if you withdraw from a CD before its term is over.
