If you’re looking for a safe place to keep your savings, a certificate of deposit (CD) can be a great option. These accounts typically offer higher interest rates than traditional checking and savings accounts. However, CD rates can vary widely. Learn more about CD rates today and where to find high-yield CDs at the best rates available.
CD rates are relatively high compared to historical averages. This is especially true for shorter time frames (about a year or less). For short-term CDs, you can expect the best deals to be around 4% APY. Long-term CDs, however, are a bit lower.
Today, the highest CD rate, 4.27% APY, offered by NexBank on its 1-year CD. However, a large minimum initial deposit of $25,000 is required.
The next highest rate can be found at two banks: Synchrony (13 month term) and Marcus by Goldman Sachs (1 year). Both banks offer an APY of 4.25%.
Below are some of the best CD rates available today from our verified partners:
The Federal Reserve began reducing the federal funds rate in light of slowing inflation and a general improvement in the economic outlook. It cut its target rate three times by the end of 2024 by a total of one percentage point.
The Federal Reserve has indicated it will continue to cut its target rate in 2025. However, it is now projecting a total of two cuts, down from its previous projection of four.
The federal funds rate does not directly affect deposit interest rates, although they are correlated. When the Federal Reserve cuts rates, financial institutions typically follow suit (and vice versa). So now that the Federal Reserve has lowered its rate, CD rates are starting to fall again. That’s why now may be a good time to put your money in a CD and lock in the best current rates.
The process for opening a CD account varies by financial institution. However, there are some general steps you can expect to follow:
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Research CD Rates: One of the most important factors to consider when opening a CD is whether the account offers a competitive rate. You can easily compare CD rates online to find the best deals.
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Choose an account that meets your needs: While the interest rate on a CD is a key consideration, it shouldn’t be the only one. You should also evaluate the length of the CD term, minimum opening deposit requirements, and fees to make sure a particular account fits your financial needs and goals. For example, you want to avoid choosing a CD term that is too long; Otherwise, you will be subject to an early withdrawal penalty if you need to withdraw your funds before the CD matures.
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Prepare your documents: When opening a bank account, you’ll need to provide some information, including your Social Security number, address, and driver’s license or passport number. Having these documents on hand will help speed up the application process.
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Complete the application: Today, many financial institutions allow you to apply for an account online, although in some cases you may need to visit the branch. Either way, the request for a new CD should only take a few minutes to complete. And in many cases, you’ll get your approval decision instantly.
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Fund the account: Once your CD application is approved, it’s time to fund the account. This can usually be done by transferring money from another account or mailing a check.
Read more: Step-by-step instructions for opening a CD