Top CD rates today: Dec. 14, 2023 — Fed holds rates steady and what that means for CDs

The Federal Reserve announced it would hold rates steady on Wednesday, perhaps indicating its two-year streak of 11 rate hikes is finished. Savers may be left wondering what the latest Fed decision means for interest rates on certificates of deposit (CDs) and other deposit accounts.

Annual percentage yields (APYs) on competitive CD rates remain high, after they climbed each time the Fed nudged rates higher, which began in March 2022. Because CD rates have likely hit their peak, now is a good time for anyone who’s looking to boost their savings with a CD that earns a high, fixed interest rate.

“Every indication is that the Federal Reserve is done raising interest rates – even if they don’t say that,” says Greg McBride, CFA, Bankrate chief financial analyst. “How long interest rates remain at these levels and how much the Fed cuts interest rates are the key questions for 2024.”

Opening a fixed-rate CD now means you’ll continue to earn the set APY for its entire term, even if rates on brand new CDs start to drop in 2024 and beyond. The Fed has penciled in cuts that would leave its target range at the end of next year 0.75 percentage point lower than its current level of 5.25-5.5 percent.

CD rates often vary widely from bank to bank, so it’s important to shop around for a CD that earns a high APY. 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

  • Today's top APY on a CD is 5.75 percent and is offered on a nine-month CD.

  • 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

CD term

Institution offering top APY

Highest APY

National average APY

Estimated earnings on $5,000 with top APY

6-month

Bank5 Connect

5.50%

N/A

$136

9-month

Forbright Bank

5.75%

N/A

$214

1-year

Popular Direct

5.67%

1.73%

$284

18-month

Limelight Bank

5.35%

1.77%

$407

2-year

Sallie Mae Bank

5.25%

1.52%

$544

3-year

Popular Direct

5.00%

1.42%

$788

4-year

Popular Direct

4.60%

1.44%

$985

5-year

Popular Direct

4.65%

1.43%

$1,276

What does yesterday’s Fed decision mean for CD rates?

The Federal Reserve decided for its third straight meeting to leave rates untouched. This means there’s a good chance rates on competitive CDs (as well as savings accounts and money market accounts) are at their peak now. Opening a fixed-rate CD now (also known as guaranteed-rate CD) enables you to continue to earn its high APY until the CD matures. If the Fed begins to cut rates in 2024 or beyond, yields on many new CDs will start to fall, in turn.

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.

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. And because credit unions are not-for-profit, their profits are distributed among members (essentially shareholders in the credit union) in the form of dividends. Dividends act the same as yields on CDs, however some credit unions may offer higher rates or lower fees as a result of sharing profits.

    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.

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