December 11, 2024 – Forbes Advisor


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Key Takeaways

  • Today’s highest CD rate is 5.37% for a 12-month CD.
  • CD rates from online banks are commonly twice as high as the national average rates.
  • CD ladders let you leverage high rates without locking up all of your money long-term.

The best interest rates on CDs—certificates of deposit—pay up to 5.37% today, based on certificate term lengths. Here’s an overview of how CD rates are changing, followed by a guide to the current top CD rates across different terms.

Highest CD Rates Today by Term

CD Rates Today

Source: Curinos. Rates are based on a $25,000 minimum deposit. Data accurate as of December 10, 2024.

A CD is a particular type of savings account that pays a fixed interest rate for a set period of time. The benefit is that you’ll typically receive a better yield than what you could find from a high-yield savings account. The drawback is that you can’t touch the money before the CD matures without paying a withdrawal penalty. For instance, you could lose an entire year’s worth of interest if you withdraw funds from a five-year CD before it reaches maturity.

Average CD Rates

Today’s 3-Month CD Rates

Three-month CDs are a good option for short-term savings goals. The current average rate on a three-month CD sits at 1.31%, but the highest rate is 4.96%. Last week, three-month CDs earned an average of 1.32%.

Today’s 6-Month CD Rates

A six-month CD offers a nice blend of high yields and short-term time commitment, and the highest yield you can find is 5.25%. That compares with 5.25% a week ago. The current average APY for a six-month CD is 1.85%, the same as last week at this time.

Today’s 1-Year CD Rates

The highest interest rate currently available on a one-year CD—one of the most popular CD terms—is 5.37%. If you land a 12-month CD with a rate in that vicinity, you’ve found a good deal. One week ago, the best rate was the same.

The average APY, or annual percentage yield, on a one-year CD is now 1.90%, the same as a week ago.

Today’s 2-Year CD Rates

If you can hold out for two years, 2-year CDs today are being offered at interest rates as high as 4.52%. The top rate last week at this time was a similar 4.52%.

Two-year CDs now have an average APY of 1.67%, the same as last week at this time.

Today’s 3-Year CD Rates

Within the last week, the highest rate on a three-year CD has been 4.65%, so you’ll want to shop around for that rate or something near it.

Today’s 5-Year CD Rates

On a five-year CD, the highest rate today is 4.25%, down from 4.31% one week ago. APYs are averaging 1.59%, the same as this time last week.

The longer the term, the higher 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 early. Be absolutely certain you understand the penalty before you make your investment.

Today’s Jumbo CD Rates

The best rate on today’s jumbo CDs is 5.37% for a 6-month term. The average APY for this category of CD is currently 1.90%, compared to 1.83% last week.

Most jumbo CDs require a minimum deposit of $100,000—and some even require $250,000. However, there’s no universally agreed-upon definition regarding what qualifies as a “jumbo” CD. Some banks and credit unions slap the label “jumbo” on CDs you can open with $50,000, $25,000 or even less.

Other Top CD Rates by Term

Related: CD Interest Rates Forecast: How Good Will They Get?

Best CD Rates Offered by Banks in December 2024

Digital banks tend to have an edge over traditional outfits thanks to lower overhead costs and the need to offer top-of-market yields to attract new customers.

Take Chase Bank (traditional), Capital One (hybrid) and Synchrony Bank (online).

Be sure to compare a few options with the types of banks you’re most comfortable with.

Other top CD rates by banks include:

How To Open a CD

Opening a CD account requires a lump-sum deposit, which you can also think of as an investment. Many CDs and share certificates (the credit union equivalent of CDs) have minimum deposit requirements, ranging from a few hundred to several thousand dollars.

Once your account is open, your principal starts earning the fixed interest rate for the entirety of the term. Banks and credit unions generally send you paper or electronic statements displaying how much interest you’ve earned.

Since the goal is to let your money grow, avoid tapping your cash before the term expires. Doing so will result in an early withdrawal penalty in the form of interest earned. In rare cases, you may also lose a percentage of your principal to early withdrawal penalties.

Are CD Rates Worth It?

CDs typically pay higher interest than other savings vehicles, even the best high-yield savings accounts and money market accounts. And while they may not offer the kind of enviable returns that are possible with stocks, CDs beat the more attention-getting investments in one regard: They’re one of the safest places to put your money.

Investors lost millions in the 2022 crypto crash, and putting your money into the stock market, real estate or gold and other commodities can be risky, too. But when you buy a certificate of deposit or credit union share certificate from a federally insured financial institution, you can sleep easily with the knowledge that your investment is protected.

The Federal Deposit Insurance Corp. provides you with up to $250,000 in coverage in the event the bank issuing your CD ever fails. For share certificates purchased from federal credit unions and most state-chartered credit unions, the National Credit Union Administration insures your money up to the same limit.

Traditional brick-and-mortar banks have far greater operating expenses than banks that only exist online. That’s why online banks are usually able to offer more attractive APYs on CDs—they have lower overhead costs, so they can afford to pay higher interest rates to customers.

Related: CD Interest Rates Forecast: How Good Will They Get?

Methodology

Curinos determines the average rates for certificates of deposit (CDs) by focusing on specific CDs and excluding others. Certain types, such as 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 are not considered in the calculation.

Frequently Asked Questions (FAQs)

How do you build a CD ladder?

You build a CD ladder by saving your money in multiple CDs with cascading term lengths. For instance, you might buy a one-year CD, a two-year CD, a three-year CD, a four-year CD and a five-year CD. As each of the shorter-term CDs matures, you replace it with a new five-year CD.

Follow this plan and you’ll have one better-yielding five-year CD maturing each year. If you’re ever having a bad year, you could take some of the cash from the expiring CD and use it to pay bills instead of pouring it all into a fresh CD.

Comparison shop to track down the best CD rates. Banks and credit unions compete by offering alluring yields to land your business, so shopping around is a must before you purchase any bank CD or credit union share certificate.

CDs usually come with zero fees, meaning your money won’t be nibbled at by the monthly maintenance fees that are typical with many savings, checking and money market accounts.

You will likely be charged an early withdrawal penalty if you end your CD term early. Make sure you won’t need access to your cash in the meantime.

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