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The best certificates of deposit (CDs) currently earn up to 5.67 percent annual percentage yield (APY). The high rate is available on a one-year CD from Popular Direct and requires a minimum deposit of $10,000. Such yields are many times greater than national average CD rates.
Competitive CD yields rise when the Federal Reserve raises interest rates, which it has done 11 times since March 2022. The guide below shows average and competitive rates for different terms, as well as how to find a CD with the best rate.
Key takeaways
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The highest one-year CD APY is 5.67 percent, while the average one-year APY is 1.75 percent.
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The best CD rates are often found from online-only banks, while brick-and-mortar banks tend to pay the bottom line.
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Another feature to look for when choosing a CD is the minimum deposit.
Today’s CD prices by maturity
| Account | Highest APY | National average APY |
|---|---|---|
| 1-year CD | 5.67% | 1.75% |
| 2-year CD | 5.15% | 1.48% |
| 3-year CD | 4.85% | 1.39% |
| 4-year CD | 4.65% | 1.46% |
| 5-year CD | 4.65% | 1.44% |
* Note: Annual Percentage Yields (APYs) shown are per October 16, 2023. APYs for some products may vary by region.
How to find the best CD prices
You’ll often find the best CD rates from online-only banks that don’t have the fixed costs of running branches — and can also offer competitive rates to draw customers away from traditional brick-and-mortar banks. Credit unions also often offer high rates because their profits go back to the members. Yields can vary significantly between banks, so it pays to shop around for the best CD prices.
Today’s featured CD
Ally Bank’s 18-month CD currently earns a competitive 5.15 percent yield and has no minimum deposit required. In total, Ally Bank offers seven terms for CDs ranging from three months to five years, as well as one no-penalty CD and two terms for Raise Your Rate CDs. The early withdrawal penalty for Ally’s 18-month CD is 60 days of interest.
When a CD is not the best choice
A CD locks in your money for the duration of the term, and you will likely be charged an early withdrawal penalty if you take the money out earlier. As such, a CD should not be used for money that you may need in the interim for living expenses or emergencies.
Remember:
CDs typically charge an early withdrawal penalty, so only put money into a CD that you won’t need during the term.
Frequently asked questions
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A CD is a deposit account that earns a fixed rate of return in exchange for locking in your funds for the duration of the term. CD terms often range from three months to five years, although it is possible to find them with shorter or longer terms than that. A CD can be a good place to store money for savings goals, such as a down payment on a house or a new car. When choosing the best CD term, consider when you need access to the money.
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Since a CD typically comes with an early withdrawal penalty, it’s best to only put money into a CD that you don’t need in the meantime for living expenses or emergencies. Money you may need sooner is best kept in a liquid account, such as a high-yield savings account, which allows access to your funds at any time.
Methodology
Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.
In June 2023, Bankrate updated its methodology that determines national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are widely available and offer high returns, as well as some of the country’s largest banks.