Top CD rates today: August 14, 2024 | APYs fall on 2 popular terms
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Key takeaways
- Top yields have fallen slightly today on terms of six months and nine months.
- The highest CD rate across terms remains 5.25% APY, offered on a three-month term.
- The best rates on most terms are more than triple the national average yields, so it pays to shop around.
Many savers who expect the Federal Reserve to lower interest rates this year are locking in a fixed yield now on a certificate of deposit (CD). Opening a CD now ensures you’ll reap the benefit of a high annual percentage yield (APY) for the entire length of the CD’s term.
Today, we see a decrease in top rates on six-month and nine-month terms, due to America First Credit Union lowering its rates slightly. Among the CD terms Bankrate monitors, the top rate remains 5.25 percent APY, which is available on a three-month term. So far, leading rates have decreased eight times in the month of August. For perspective, we only saw six drops in highest rates in the entire month of July. Various banks are lowering their APYs in anticipation of a September Fed rate cut.
Bankrate’s table below shows the highest yields offered on widely available CDs, by term. It also lists national average CD rates and how much you’d earn for each term with a $5,000 investment.
Today's CD rates by term
CD term | Institution offering top APY | Highest APY | National average APY | Estimated earnings on $5,000 with top APY |
---|---|---|---|---|
3-month | America First Credit Union | 5.25% | 1.28% | $64 |
6-month | America First Credit Union | 5.15% | 1.77% | $127 |
9-month | Synchrony Bank | 5.15% | N/A | $192 |
1-year | First Internet Bank of Indiana | 5.15% | 1.83% | $258 |
18-month | LendingClub | 5.00% | 1.93% | $380 |
2-year | Bask Bank | 4.75% | 1.56% | $486 |
3-year | First Internet Bank of Indiana | 4.45% | 1.45% | $698 |
4-year | First Internet Bank of Indiana | 4.29% | 1.50% | $915 |
5-year | Schools First Federal Credit Union | 4.35% | 1.45% | $1,186 |
Note: Annual percentage yields (APYs) shown are as of August 14, 2024. APYs for some products may vary by region.
N/A: Not available; Bankrate doesn’t track national averages for the 9-month CD term due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.
Is a CD a safe place to keep your money?
When shopping around for a CD, be sure to go with one in which the funds are federally insured. This means you won’t lose your money if the financial institution were to fail. Choose a bank that’s insured by the Federal Deposit Insurance Corp. (FDIC) or a credit union insured by the National Credit Union Administration (NCUA). Under such federally insured institutions, CDs and share certificates are each insured for up to $250,000 per depositor, per insured bank or credit union, for each account ownership category.
What the current rate environment means for CDs
Recent federal funds rate changes: To combat high inflation, the Federal Reserve raised its benchmark interest rate 11 times in 2022 and 2023, before leaving rates unchanged for eight straight meetings. Before the string of rate hikes began in March 2022, the target range was at 0-0.25 percent, and it currently stands at a 23-year high of 5.25-5.50 percent.
What this means for deposit accounts such as CDs: Yields on competitive savings accounts and CDs tend to move in lockstep with the Fed’s interest rate moves. As such, many banks increase their yields when the Fed raises rates, and they lower yields when the federal funds rate drops. While the Fed has held rates steady since July 2023, top CD APYs ended up peaking in late 2023 and have since been decreasing gradually, as illustrated below.
How inflation factors in
The Fed has held its key benchmark rate steady since July 2023, due to inflation not slowing as quickly as it has in the past. Fed officials’ goal is to bring the annual inflation rate down to 2 percent. While the consumer price index (CPI), a measure of inflation, has decreased significantly from its decades-high annual rate of 9 percent in June 2022, it’s currently at 3 percent.
“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” Fed Chair Jerome Powell said in remarks following the Fed’s latest decision not to change rates on July 31.The current rate of inflation is a significant factor that affects what the Fed decides to do with rates. An increase in the federal funds rate can be good for savers — translating to higher APYs on many CD and savings accounts — while it can be bad for borrowers as interest rates tend to increase on loans.
Is now still a good time to open a new CD?
As of late, top CD rates are declining due, in part, to strong signals from the Fed that it plans to cut interest rates in September, if not sooner, and fears arising from recent market downturns. It's best to take advantage of still-high CD rates now while you still can.
"Now is the time to lock in attractive returns on CDs as the Federal Reserve is poised to begin cutting interest rates,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The top-yielding CDs currently earn in excess of the inflation rate and savers have the ability to lock in that inflation-beating return for multiple years. If you have money you won’t need to touch for a period of time, now is a great time to consider a CD."
CD FAQs
Research 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 the 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 broadly available and offer high yields, as well as some of the nation’s largest banks.