Top CD rates today: Jan. 3, 2024 — 5.66% is the highest APY across terms

At the start of the new year, the top rates on many certificates of deposit (CDs) remain unchanged from the end of last year, although the leading annual percentage yields (APYs) are down slightly for three- and four-year terms.

Yields on CDs could follow suit if the Federal Reserve cuts rates this year, although it’ll likely be a solid year for CD investors with overall high CD APYs and an inflation rate that continues to cool.

Locking in a high APY now on a CD guarantees you’ll earn that fixed yield should the going rates start to decrease. Bankrate monitors top and average CD rates every weekday, and you’ll find today’s rates in the table below.

Key takeaways

• Today's top CD rate remains 5.66% APY with a term of one year.

• Top APYs for terms of three and four years have declined slightly in recent weeks.

• National averages are still significantly lower than top rates, so it pays to shop around.

Today’s CD rates by term

Where can I find the best CD rates in 2024?

High CD rates are often found at online-only banks, such as Ally Bank and Quontic Bank. Online-only banks often pay attractive rates to help bring customers over from established big banks that pay lower-than-average yields. In addition, you’ll often find high APYs at credit unions, such as Pentagon Federal Credit Union, because their profits go back to members. Don’t settle for lackluster yields when the best CD rates are more than triple the national averages.

What happened with average CD rates in 2023?

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

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.