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Today’s best interest rates on CDs—certificates of deposit—are as high as 3.25%, depending on the CD’s term. Plus, the average yields are climbing. Take a look at the top rates and typical yields being offered across 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 12-month CD—one of the most popular CD terms—is 2.86%, according to data from Bankrate.com. If you find a one-year CD with a rate in that neighborhood, you’ve found a good deal. One week ago, the best rate was a lower 2.85%.
The average APY, or annual percentage yield, on a one-year CD is now 1.41%, up from 1.36% a week ago. APY provides a more accurate portrait of the yearly interest you’ll earn with a CD because it factors in compound interest. That’s the interest you earn not only on your deposit (or principal) but also on the interest itself.
If you’d prefer a CD with a shorter term than one year, today’s best rate on a six-month CD is 2.25%. The top rate was the same last week. The current average APY for a six-month CD is 0.94%, up from 0.90% last week at this time.
On nine-month CDs, the highest interest rate is now 1.98%; last week at this time, it was the same. Nine-month CDs today are being offered at an average APY of 0.96%, up from 0.90% 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 2.76%; you’ll do well if you can find a rate close to that. One week ago, the top rate also was 2.76%.
The highest rate on an 18-month CD is currently 2.95%—up from 2.81% a week ago. The average APY is 2.03%, up from 1.99% 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 1.62%, 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. You’re not supposed to touch your deposit until the CD’s term is up, whether that’s in six months, one year or five years. 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 away for years.
The average APY on a three-year CD is now 1.69%, up from 1.68% 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%, compared to 1.86% 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.
The Beauty of a CD Ladder
Want to earn higher yield, but wary of keeping your money chained up for years? A CD ladder can help you earn good returns and make your investment feel more liquid.
You build a ladder by investing your money in multiple CDs with terms of different lengths. You might buy a one-year CD, a two-year CD, a three-year CD, a four-year CD and a five-year CD. As each of the shorter-term CDs matures, you replace it with a new five-year CD.
Follow this course, and in a few years you’ll have one better-yielding five-year CD maturing each year. If you’re ever having a bad year, you could take some of the cash from the expiring CD and use it to pay bills instead of pouring it all into a fresh CD.
You must comparison shop to track down the best CD rates. Banks and credit unions compete by offering alluring yields to land your business, so shopping around is a must before you purchase any bank CD or credit union share certificate.
Are CDs a Good Deal?
CDs typically pay higher interest than other savings vehicles, even the best high-yield savings accounts and money market accounts. And while they may not offer the kind of enviable returns that are possible with stocks, CDs beat the more attention-getting investments in one regard: They’re one of the safest places to put your money.
Investors lost millions in the 2022 crypto crash, and putting your money into the stock market, real estate or gold and other commodities can be risky, too. But when you buy a certificate of deposit or credit union share certificate from a federally insured financial institution, you can sleep easily with the knowledge that your investment is protected.
The FDIC provides you with up to $250,000 in coverage in the event the bank issuing your CD ever fails. For share certificates purchased from federal credit unions and most state-chartered credit unions, the NCUA insures your money up to the same limit.