Top CD rates today: Dec. 7, 2023 — Lock in APYs above 5%

Chances are good that the Federal Reserve won’t opt for a rate hike when it meets next week, so we may not see further increases in yields on certificates of deposit (CDs). In fact, top CD rates decreased slightly last week on four- and five-year terms. Rates remain elevated, though, so now is still a good time to lock in high annual percentage yields (APYs) on CDs.

Unlike savings accounts, which typically feature variable rates that the bank may change at any time, most CDs have a fixed, guaranteed APY that will remain the same until the term ends, even if the Fed lowers rates. This makes a CD a great investment if deposit account rates start to fall.

“The price paid for keeping money in a liquid account is that the returns are subject to change at any time, while a CD offers the ability of locking in a fixed rate of return, particularly attractive now with interest rates near a peak,” says Greg McBride, CFA, Bankrate chief financial analyst.

The guide below lists average rates and competitive ones for various terms, as well as how to find a CD with the best rate. A CD calculator also comes in handy in determining how much interest the account will earn by the time its term ends.

Key takeaways

• The top CD rate remains a nine-month option that earns 5.75 percent APY.

• Some top CD yields have decreased slightly, yet overall yields remain high.

• Competitive CDs offer APYs more than triple the national averages.

Today’s CD rates by term

* Note: Annual percentage yields (APYs) shown are as of Dec. 7, 2023. APYs for some products may vary by region.

N/A: Not available; Bankrate doesn’t track national averages for the 6-month and 9-month CD terms due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.

What’s happened with average CD rates in 2023?

National average CD yields have risen steadily in 2023, as the Federal Reserve has hiked interest rates four times this year. (In all, national averages began increasing after the Fed started hiking rates in March 2022. It raised rates seven times last year.)

How to find the best CD rates

You’ll often find the best CD rates from online-only banks, such as Synchrony Bank, which don’t have the overhead costs of running branches — and which also may offer competitive rates to draw customers away from traditional brick-and-mortar banks. Credit unions, such as Alliant Credit Union, also commonly offer high rates because their profits go back to members. Yields can vary significantly among banks, so it pays to shop around for the best CD rates.

How to make the most of today’s CD rates

When shopping for the right CD, pay attention to rates over all available terms. Currently, you can find one-year CDs that pay higher yields than longer terms of three, four and five years. Another benefit of a shorter-term CD is that the funds are freed up sooner, which can make them a good investment for anyone who wants access to the funds relatively soon for reinvestment or for a planned expense. Consider a CD ladder if you prefer locking in some funds for the long term as well as freeing up some funds sooner.

CD FAQs

• How do CDs work?

  A CD is a deposit account that earns a fixed rate of return in exchange for locking in your funds for the entire term. CD terms often range from three months to five years, although it’s possible to find ones with terms shorter or longer than that. A CD can be a good place to stash money for savings goals, such as a down payment on a house or a new car. When choosing the best CD term, consider when you’ll need access to the money.

• Who should get a CD?

  Because a CD typically comes with an early withdrawal penalty, it’s best to only put money into a CD that you won’t need in the meantime for living expenses or emergencies. Money you may need sooner is best kept in a liquid account, such as a high-yield savings account, which provides access to your funds anytime.

• Why are CDs from credit unions called “share certificates”?

  Both CDs and share certificates are deposit accounts where your money typically grows at a fixed rate for a set amount of time. The main difference between the two is in the name: CDs are offered from banks, whereas share certificates are offered from credit unions. What’s more, CD earnings are referred to as interest, while share certificate earnings are called dividends.
  
  CDs and share certificates are insured through banks and credit unions, respectively, that are federally insured. For example, banks are insured by the Federal Deposit Insurance Corp. (FDIC), whereas credit unions are insured through the National Credit Union Administration (NCUA). Under such federally insured banks and credit unions, CDs and share certificates are each insured for up to $250,000 per depositor, per insured bank, for each account ownership category.

Methodology

Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.

In June 2023, Bankrate updated its methodology that determines the national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.