Top CD rates today: Dec. 6, 2023 — It’s still a good time to lock in a fixed APY now

Certificate of deposit (CD) rates are currently high at competitive banks, thanks to the Federal Reserve’s key benchmark borrowing rate sitting at a 22-year high. When the Fed hikes rates, many banks follow suit by increasing annual percentage yields (APYs) on deposit accounts.

The Fed will announce on Dec. 13 whether it plans to increase rates again or leave them untouched — while most market participants believe the Fed is done with rate hikes. For savers, now is still a good time to take advantage of a CD with a fixed, guaranteed yield.

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-yielding CD is a nine-month option that earns 5.75 percent APY.

• The highest rates for four- and five-year CDs have decreased slightly from a week ago.

• Top CD yields are more than three times the national average rates.

Today’s CD rates by term

How have top CD rates changed from last week?

Last week, Limelight Bank started offering a rate on its one-year CD that tied Forbright Bank’s nine-month CD for the highest rate available — which is an APY of 5.75 percent. However, Limelight’s high rate proved to be short-lived because the bank lowered it down to 5.6 percent this week, placing Forbright’s nine-month CD in the top spot by itself.

Popular Direct is back in the Number One spot for a one-year term with an APY of 5.67 percent. Limelight also lowered its 18-month CD rate to 5.4 percent APY, so Popular Direct’s CD also became the new leader for that term, with a 5.5 percent APY.

An inverted yield curve remains in place for CDs, with many shorter-term CDs, typically three years or less, outearning longer-term ones of four and five years. The top-earning four- and five-year CDs both had APYs of 4.75 percent, until late last week. Those APYs were from Bread Savings, which has lowered its rates. The new leader for those terms is Popular Direct, which pays APYs of 4.65 percent and 4.7 percent for four- and five-year CDs, respectively.

In all, Popular Direct is offering the highest APY for six of the eight terms Bankrate tracks between six months and five years. However, savers should take note that Popular Direct requires a minimum deposit of $10,000, which is significantly higher than what many other banks require.

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.

Featured CD of the day

Delta Community Credit Union currently offers a one-year CD with a high rate of 5.15 percent and a manageable minimum deposit of $1,000. In all, five terms of CD are offered that range from six months to five years. To join Delta Community, you need to live or work in select Georgia counties or be employed by one of more than 150 businesses, such as Delta Air Lines, Chick-fil-A and United Parcel Service (UPS).

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.