After the Federal Reserve’s most recent rate hike, interest rates are now at 22-year highs — meaning that the cost of borrowing is much higher than it was just one year ago. While that may be bad news for borrowers or those with high-interest debt from credit cards, it’s good news for savers. With interest rates this high, opening a certificates of deposit (CD) today can help savers maximize their interest earnings.
In recent months, many banks have increased APYs on CDs. And, with a little research, you can lock in a great CD right now on nearly all CDs terms — whether a few months or a few years. By putting your savings in a high-earning CD today, that move will typically help you boost your balance by hundreds of dollars or more over the CD term — helping you to more quickly reach your savings goals.
Start your journey by comparing top CD rates and earn more today.
What are today’s CD interest rates?
Depending on your CD type, terms and other details, there’s a varying range of CD rates you can qualify for today. The following CD rates are the current national averages for specific terms as of August 9, 2023, according to Bankrate.
- 1-year CD yield: 1.61% APY
- 3-year CD yield: 1.30% APY
- 5-year CD yield: 1.36% APY
These averages look much different from the actual rates available on top CDs today, though. Here are some of the best CD rates by term today:
6-month CD
- Popular Direct: 5.35% APY
- Bank5 Connect: 5.30% APY
- Bask Bank: 5.25% APY
1-year CD
- Popular Direct: 5.50% APY
- Bread Savings: 5.35% APY
- First Internet Bank of Indiana: 5.35% APY
5-year CD
- Popular Direct: 4.60% APY
- First Internet Bank of Indiana: 4.59% APY
- Barclays Bank: 4.50% APY
Want the best CD for your savings? Compare top rates here and start earning more money today!
How to get a good CD rate
Use these strategies to lock in the best CD rate right now.
Look at online banks
There’s a big difference between national average savings rates and the top interest rates available. In part, that’s because different types of banks often have very different rates.
Online banks and online divisions of larger banks have fewer overhead costs to keep up their day-to-day operations, since there are no physical bank branches. Typically these are the banks with rates that have kept up with Fed changes over the past several months. Today, you’re most likely to find CDs with competitive rates from online banks.
By contrast, large banks with branches across the country — where you may keep your checking account for convenience and easy access to branches and ATMs — often have lower CD and savings rates. Many of these banks’ CDs are below average and may even still be close to zero.
Consider short-term CDs
CD terms can range from around one to three months to 10 years. But often, short-term CDs are the best way to get a top rate today.
But the overall economic environment has made it so short-term CDs (around six months to one year) have higher interest rates than longer terms right now. Bankrate’s data actually specifies that one-year CD yields have surpassed five-year yields consistently since October 2022.
The phenomenon is called the inverted yield curve. “This means rates are highest for short term CDs and treasuries and actually are lower as you go out further in time,” says Donald F. Dempsey, CFP, founder of Dempsey Investment Management.
In order to take advantage of those high rates while also saving for the long-term, “A practical approach could be to ladder your CDs,” Dempsey says. “Buy some one year, some two years, some three years, etc.”
See all the best short-term CD rates you can qualify for here.
The bottom line
Right now, both CD rates and savings rates in general offer higher rates than have been seen in years. You can take advantage of the opportunity to lock in a great rate with flexible terms to help you reach your savings goals more quickly. Just make sure you compare different banking options and the term lengths that work for you in order to start maximizing your balance with the best CD rates available today.