Top CD rates today: Jan. 10, 2024 — Highest APY is now 5.6%

If you’re considering a certificate of deposit (CD), now could be a good time to lock in a high yield. Annual percentage yields (APYs) on CDs are expected to remain high in 2024 and continue to outpace inflation.

That said, we’ve seen slight declines on top APYs for CDs in recent weeks. In fact, the overall highest APY, which was for a one-year term, decreased yesterday from 5.66 percent to 5.55 percent. This leaves the new top APY across all terms at 5.6 percent, which is for a nine-month CD.

Bankrate monitors leading CD rates each weekday, and the table below shows top widely available rates for terms from six months to five years. It also shows national averages, for comparison, as well as how much you can earn in interest with a $5,000 deposit.

Key takeaways

• The top rate for a one-year CD is now 5.55 percent APY, having decreased yesterday from 5.66 percent APY.

• This rate decrease means the top overall CD APY is now 5.6 percent, which is for a nine-month term.

• In all, leading APYs on terms up to two years are 5 percent and above, while APYs for terms of three to five years are 4.54 percent to 4.75 percent.

Today’s CD rates by term

How much does a CD earn in a year?

Our table above shows how much you’ll earn by depositing $5,000 in CDs of various terms. But what if you want to invest more? How much more can you earn in interest with a larger amount of money saved in a CD? Here’s how much you’d earn in interest based on how much you deposit in a one-year CD that earns the top APY of 5.55 percent:

• $5,000 deposit: earn $278 in interest

• $10,000 deposit: earn $555 in interest

• $15,000 deposit: earn $833 in interest

• $20,000 deposit: earn $1,110 in interest

Thanks to the principle of compound interest — in which you generate interest on your interest — investing in a longer-term CD can help you earn substantially more on your savings. Here, for example, is the approximate amount of interest you’d earn by depositing various amounts of money in a five-year CD that earns the current top APY of 4.6 percent:

• $5,000 deposit: earn $1,261 in interest

• $10,000 deposit: earn $2,522 in interest

• $15,000 deposit: earn $3,782 in interest

• $20,000 deposit: earn $5,043 in interest

You can use Bankrate’s CD calculator to calculate the interest you’ll earn on a CD by entering the deposit amount, term length and APY.

CD rates from 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

• 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.