- You can earn up to 4.75% APY on a high yield CD.
- CD APYs have been falling all year and may fall again in December if the Fed cuts rates.
- Locking in a high APY now can protect your money from further rate drops.
Certificates of deposit have offered sky-high interest rates on your savings over the past few years. Now, as interest starts to return to the Federal Reserve’s 2% target and the central bank has begun cutting rates, CD rates have been coming down. With another possible rate cut on the horizon for December, CD rates could drop further.
If you’ve been thinking about opening a certificate of deposit, you can still get a competitive return on your savings by fixing a high rate now. Today’s best CDs offer up to 4.75% annual yield, more than double that national average for some terms. When you lock in a high CD rate now, you can protect your earnings from future rate drops.
You’ll find the best APYs at credit unions. Here are some of the highest rates based on the banks we follow at CNET and how much you could earn by depositing $5,000 right now:
Today’s best CD rates
| term | Highest APY* | bank | Estimated earnings |
|---|---|---|---|
| 6 months | 4.75% | Federal credit union at the community level | $117.37 |
| 1 year | 4.50% | Federal credit union at the community level | $225.00 |
| 3 years | 4.15% | America First Credit Union | $648.69 |
| 5 years | 4.25% | America First Credit Union | $1,156.73 |
Experts recommend comparing rates before opening a CD account to get the best possible APY. Enter your information below to get the best rate from CNET partners for your area.
Will CD rates drop in December?
All eyes are on the Fed to see where interest rates will go. The Fed could make another interest rate cut in December, which would mean CD’s fall even lower.
The Fed does not directly affect CD rates, but it does control the federal funds rate. The federal funds rate is the overnight lending rate that banks charge each other to borrow. When the federal funds rate falls, rates on consumer products like CDs and savings account fees tend to follow.
After the Fed’s post-pandemic rate hike mandate, interest rates hit record highs and CD rates soared above 5% APY. Since the beginning of the year, CD and savings rates have been slowly decreasing. After the Fed first order cut as after the September pandemic, CD and savings rates began to fall faster.
The Fed has cut rates twice this year, but Federal Reserve Chairman Jerome Powell hinted at a slow pace of rate cuts earlier this month. So experts are divided over whether the Fed will cut rates or keep them steady at its Dec. 17-18 meeting.
Bobbi Rebell, CFP® and personal finance expert a BadCredit.orghe believes a rate cut is likely, but does not rule out a pause, “due to continued concerns about inflation and a sense that the economy is not as weak as many had believed.”
What do current CD rates mean to you?
If you’re working to increase your savings, there’s still time to earn a high APY. If you already have money saved that you won’t need to dip into for a few years, you can now get a high, guaranteed return with a CD.
Even with another rate cut looming, CD rates will likely drop, but they won’t plummet overnight. You’ll likely get a higher return on your money by locking in a CD sooner, but you can also get competitive rates by increasing your savings with a high-yield savings account.
Here’s where CD rates stood at the start of this week compared to the start of last week:
How CD rates have changed in the last week
| term | CNET average APY last week | CNET Average APY This Week* | Weekly change* |
|---|---|---|---|
| 6 months | 4.21% | 4.18% | -0.71% |
| 1 year | 4.09% | 4.11% | +0.49% |
| 3 years | 3.55% | 3.55% | No change |
| 5 years | 3.48% | 3.49% | +0.29% |
How to choose the right CD
A competitive APY is important when comparing CD accounts, but it’s not the only thing you should look at. To find the right account for you, also consider these things:
- When you need your money: Penalties for early withdrawal may affect your interest earnings. So make sure you choose a term that fits your savings schedule. Alternatively, you can select a CD without penaltyalthough the APY may not be as high as a traditional CD of the same term would have.
- Minimum deposit requirement: Some CDs require a minimum amount to open an account, usually between $500 and $1,000. Others don’t. The amount of money you have to set aside can help you narrow down your options.
- Rates: Maintenance and other expenses can affect your earnings. many online banks they don’t charge fees because they have lower overhead costs than banks with physical branches. Still, read the fine print on any account you’re evaluating.
- Federal Deposit Insurance: Make sure that any bank or credit cooperative you are considering that you are a member of the FDIC or NCUA, so your money is protected if the bank fails.
- Customer ratings and comments: Visit sites like Trustpilot to see what customers are saying about the bank. You want a bank that is responsive, professional and easy to work with.
Methodology
CNET reviews CD rates based on the most recent APY information from issuer websites. We’ve evaluated the CD rates of over 50 banks, credit unions and finance companies. We evaluate CDs based on APYs, product offerings, affordability and customer service.
Current banks included in CNET’s weekly CD averages include Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MYSB Direct , Quontic, Rising Bank, Synchrony, EverBank, Popular Bank, First Internet Bank of Indiana, America First Federal Credit Union, CommunityWide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America and Connexus Credit Union.
*APYs as of December 1, 2024, based on banks we track at CNET. Earnings are based on APY and assume interest is compounded annually. Weekly percentage increase/decrease from November 25, 2024 to November 29, 2024.
