August 24, 2022 – Forbes Advisor


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Today’s best interest rates on CDs—certificates of deposit—range as high as 3.25%, depending on the CD’s term. Plus, the average yields are climbing. Take a look at the top rates being offered on CDs of various durations.

Related: Compare the Best CD Rates

Highest CD Rates Today: 1-Year, 6-Month, 9-Month Terms

The highest interest rate currently being offered on a one-year CD—one of the most popular CD terms—is 2.85%, according to data from Bankrate.com. If you land a one-year CD with a rate in that neighborhood, you’re getting a good deal. One week ago, the best rate was the same.

The average APY, or annual percentage yield, on a one-year CD is now 1.37%, up from 1.33% a week ago. APY provides a more accurate portrait of the annual interest you’ll earn with a CD because it takes into account compound interest. That’s the interest you earn not only on your deposit (or principal) but also on the interest in the account.

If you’d like a CD with a shorter term than one year, today’s best rate on a six-month CD is 2.25%. The average rate was the same last week. The current average APY for a six-month CD is 0.91%, up from 0.88% last week at this time.

On nine-month CDs, the highest interest rate is now 1.98%; last week at this time, it was higher—2.57%. Nine-month CDs today are being offered at an average APY of 0.90%, up from 0.78% a week ago.

Highest CD Rates Today: 15-Month, 18-Month and 2-Year Terms

On a 15-month CD, today’s best interest rate is 2.66%; you’ll do well if you can find a rate close to that. One week ago, the top rate also was 2.66%.

The highest rate on an 18-month CD is currently 2.76%—the same as a week ago. The average APY is 2.02%, up from 1.96% a week ago.

If you can hold out for two years, 24-month CDs today are being offered at interest rates as high as 2.96% APY. The top rate last week at this time was a similar 2.96%. Two-year CDs now have an average APY of 1.58%, an increase from 1.56% last week.

A CD is a type of savings account that comes with a fixed interest rate and a time lock. Investors are discouraged from touching their deposit until a CD’s term is up. Your patience is rewarded with interest that’s usually better than what you’d earn from a regular savings account.

If you withdraw money from a CD before “maturity”—when it hits the end of its term—and you can be slapped with stiff penalties. For example, you can lose up to six months’ worth of interest if you make an early withdrawal from a one-year CD.

Highest CD Rates Today: 3-Year and 5-Year Terms

CDs with longer terms tend to have some of the most attractive interest rates and APYs—if you’re willing to keep your money locked up for years.

The average APY on a three-year CD is now 1.70%, up from 1.64% a week ago.

On a five-year CD, the highest rate today is 3.25%, the same as one week ago. APYs are averaging 1.88%, up from 1.83% at this time last week.

The longer the term, the harsher the early withdrawal penalty. It’s not unusual to lose one full year’s worth of interest or more if you break open a five-year CD too soon. Be absolutely certain you understand the penalty before you make your investment.

How CDs Work

CDs may seem a little exotic as bank accounts go, but how they work is actually pretty simple. You open the account with an amount of money, leave your deposit alone for a period of months or years, and let the compound interest work its magic.

Many CDs and their cousins, the share certificates offered by credit unions, require you to deposit hundreds, thousands or even tens of thousands of dollars to open your account. Other financial institutions have no minimum deposit requirement, meaning you could open the account with as little as a penny.

But banks and credit unions typically won’t allow you to add to your deposit once the term begins and the clock starts ticking. And they’re serious about not letting you crack open your CD or share certificate too soon. The early withdrawal penalties can be so tough they’ll eat into your principal, not just take back some of your interest.

Do CDs Cost Anything?

CDs usually come with zero fees, meaning your money won’t be nibbled at by the monthly maintenance fees that are typical with many savings, checking and money market accounts.

The big cost is—obviously—the deposit, particularly if there’s a minimum deposit you must meet. But as long as you don’t withdraw money from your CD before it matures, you’ll get to keep all of the interest you earn. That makes CDs a great fee-free way to grow your money.



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