Top CD rates today: January 3, 2025 | Lock in 4.52% APY until next year
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Key takeaways
- Today's highest CD rate across terms is 4.65 percent APY, offered on a three-month term.
- Competitive APYs for some terms are currently several times greater than national averages.
- Opening a fixed-rate CD now can help you lock in a relatively high yield before APYs potentially drop further.
Opening a fixed-rate certificate of deposit (CD) now should give you peace of mind that your savings will continue to earn the same annual percentage yield (APY) should rates continue to retreat. APYs on competitive CDs decreased gradually in 2024, and they could drop further if the Federal Reserve lowers its benchmark rate again in 2025.
For today, the leading APY across CD terms is 4.65 percent, which is available on a three-month CD from Popular Direct. In all, APYs currently range from 4.20 percent to 4.65 percent on popular CD terms between six months and five years.
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 | Popular Direct | 4.65% | 1.28% | $57 |
| 6-month | Popular Direct | 4.61% | 1.68% | $114 |
| 9-month | America First Credit Union | 4.45% | N/A | $166 |
| 1-year | TAB Bank | 4.52% | 1.75% | $226 |
| 18-month | Popular Direct | 4.30% | 1.81% | $326 |
| 2-year | Popular Direct | 4.25% | 1.51% | $434 |
| 3-year | Popular Direct | 4.25% | 1.42% | $665 |
| 4-year | America First Credit Union | 4.20% | 1.46% | $894 |
| 5-year | America First Credit Union | 4.25% | 1.42% | $1,157 |
Note: Annual percentage yields (APYs) shown are as of January 3, 2025. 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.
When is a CD a good idea?
A CD can be a good place for money you’re saving for future purchases or expenses. For instance, you might put money into a 12-month CD for a vacation you’re planning for next year. Or, you might deposit funds into a five-year CD to make a down payment on a house soon after the CD matures. A benefit of locking in your money is you’ll be less tempted to use it for impulse purchases in the meantime.
What the current interest rate environment means for CDs
Recent federal funds rate changes: The Federal Reserve lowered its benchmark interest rate three times in recent months, and the federal funds rate currently stands at a target range of 4.25-4.5 percent. Prior to these rate cuts, the Fed had gradually raised rates 11 times in 2022 and 2023, and rates stood at a 23-year high leading up to the September cut.
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. The Fed’s recent December rate cut could spur further decreases in CD APYs.
Prior to the September 2024 rate cut, the Fed had held rates steady since July 2023. Meanwhile, top CD APYs peaked in late 2023 and have since been decreasing gradually, as illustrated below.
CD glossary
Here are some terms you’ll likely come across when choosing a CD.
- Add-on CD: A CD that enables you to make additional deposits after your initial investment. This feature affords more flexibility than traditional CDs, which only allow one deposit at the beginning of the term.
- Annual percentage yield (APY): A percentage that indicates how much interest a CD earns in one year, which takes into account the effect of compounding.
- Brokered CD: A type of CD issued by a bank but sold through a brokerage firm or other financial institution.
- CD ladder: An investment strategy that involves purchasing multiple CDs with varying maturity dates to provide liquidity and take advantage of higher rates.
- Early withdrawal penalty: A fee charged if funds are withdrawn from a CD before the maturity date. Penalties often range anywhere from 90 days to 365 days’ worth of interest.
- Grace period: A specific time after the maturity date during which an account holder can make changes to the CD without penalties. A grace period typically ranges from five to 14 days.
- IRA CD: A CD that’s held within an individual retirement account.
- Minimum opening deposit: The lowest amount of money required to open a CD account, which can vary by institution. Some institutions don’t have a minimum deposit requirement.
- No-penalty CD: A type of CD that allows you to withdraw your money without facing a penalty while providing a fixed APY.
- Promotional CD: Also known as a bonus or special CD, it’s a CD with an above average APY. These may be offered by banks and credit unions as a way to obtain new customers.
- Jumbo CD: A CD that has a high minimum balance requirement, typically $100,000, sometimes as low as $95,000. This type of CD tends to offer a higher interest rate than regular CDs with the same term.
- Bump-up CD: Also known as a “raise-your-rate CD,” a bump-up CD provides savers with the option to increase the CD’s APY without having to change its term. Generally, only one rate increase is allowed during its term.