Top CD rates today: Feb. 2, 2024 — It’s still a good time to lock in a fixed APY now

Key takeaways

• Today's top CD yield across terms is 5.51% APY on a one-year term.

• Due to slight recent drops, the leading APYs for six-month and an 18-month terms are now 5.35% and 5.15%, respectively. Meanwhile, the top three-month term recently increased to 5.50% APY.

• Highest APYs are currently found on shorter-term CDs with terms of up to 18 months.

• Top APYs remain around triple the national averages, so be sure to shop around.

After the Federal Reserve’s decision to leave rates untouched this week, savers looking to open a certificate of deposit (CD), especially one with a high fixed interest rate, would do well to seize on the moment now, after the Fed has penciled in plans to lower rates at some point in 2024. Yields on CDs tend to increase when the Fed raises rates, yet often go down when the Fed cuts rates.

This week, we saw some banks scaling back on interest rates, as there were slight dips in the leading annual percentage yields (APYs) on six-month and 18-month CDs. Last week, we also saw a slight drop in the top nine-month yield, while the top APY for a three-month term actually rose a bit. Today, the highest APY you’ll find across terms remains 5.51 percent on a one-year CD.

The guide below lists the top APYs for various CD terms, as well as how much you can earn by the time the CD matures. A CD calculator also comes in handy in determining how much interest the account will earn by the time its term ends.

Today’s CD rates by term

Keep in mind:The Federal Reserve decided to leave rates unchanged this week. Fed rate moves often impact CD APYs.

Featured CD of the day

BrioDirect is currently offering a promotional CD to new customers that has a term of one year and a competitive yield of 5.35 percent. A relatively manageable amount of $500 is required to open the CD, which is the same amount needed to open all BrioDirect CDs (which range in terms from 30 days to five years). BrioDirect also offers savings and money market accounts that earn above-average rates of return.

CD rates in 2022 through 2024

National average CD yields rose steadily in 2023, as the Federal Reserve continued to hike interest rates at the fastest pace since the 1980s. In all, Fed officials increased rates 11 times between 2022 and 2023, bringing the federal funds rate to its current target range of 5.25-5.5 percent. Along with these rate hikes, average CD APYs rose to the highest they’d been in many years, with APYs on some competitive CDs climbing as high as 7 percent.

This year is expected to be a banner one for CD savers. Greg McBride, CFA, Bankrate’s chief financial analyst, predicts two Fed rate cuts in 2024, yet he says CD yields will continue to top inflation. “Savers have another good year in which their returns will shine, with inflation expected to decline further,” he says.

McBride also stresses the importance of shopping around for the highest APY. “Top-yielding offers are still going to deliver a notable advantage [over lower-yielding ones],” he adds.

CD FAQs

• Is a CD a good idea right now?

  Although Federal Reserve rate cuts are widely expected in 2024, and banks may lower deposit account rates as a result, CD yields are expected to remain strong and outpace inflation. Overall, average yields remain higher than they’ve been in years, while the top APYs on many terms are more than triple the national averages.
  
  Opening a competitive CD now means you won’t be missing out on a high APY should rates start to fall later this year. Because a CD typically earns a fixed rate, you’ll continue to earn the same yield throughout its entire term, even if rates on new CDs start to drop.

• What should you consider when choosing a CD?

  Before committing money to a CD, make sure you’re comfortable parting with the funds for the entire term; withdraw the funds early and you’ll likely be hit with an early withdrawal penalty. As such, a CD isn’t a good place for your emergency fund. Other factors to consider include:

  • Annual percentage yield, or APY: Not all banks are equal when it comes to APYs, so it pays to check out what various banks are offering. Online-only banks are known for paying high yields, so they’re a good place to start your search.

  • When you’ll need access to the money: CDs commonly come in terms between three months and five years, although you’ll sometimes be able to find terms as short as one month and as long as 10 years. Make sure you choose a term that corresponds with when you’ll want the money for a planned purchase or other investment.

  • Minimum deposit requirement: Some banks, such as Ally Bank and Synchrony Bank, don’t require a set minimum deposit, while others may require $1,000, $5,000 or even as much as $10,000. When shopping around, find a CD with a minimum deposit that aligns with your saving goals.

  • Federal deposit insurance: Before opening a CD, make sure the bank is insured by the Federal Deposit Insurance Corp. (FDIC). Likewise, if it’s a credit union, make sure it’s insured through the National Credit Union Administration (NCUA). This way, should the financial institution close its doors, your funds will be insured for up to $250,000 per depositor, per insured bank or credit union, for each account ownership category.

• Can you lose money in a CD?

  Your money is protected in a CD when it’s with a bank insured by the Federal Deposit Insurance Corp. (FDIC) or a credit union insured through the National Credit Union Administration (NCUA). When institutions are covered by this federal insurance, CDs and share certificates are each insured for up to $250,000 per depositor, per insured bank or credit union, for each account ownership category.
  
  CDs typically require that you lock in your money for a set term, and taking out the money before the term ends usually results in an early withdrawal penalty. This penalty causes you to lose some of your interest — and possibly also some of your principal, which is the money you originally deposited in the account.

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.