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Top CD rates today: November 6, 2024 | Highest APYs hold steady before Fed rate decision

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Key takeaways

  • Today's top CD rate across terms is 4.95 percent APY, offered on a three-month CD.
  • Rates close to 5% APY can be found on various CD terms.
  • For some CD terms, national averages are only yielding around one-third of the highest rates.

After having lowered interest rates by a larger-than-expected half percentage point in September, the Federal Reserve may lower rates further this week — with market watchers expecting officials to cut rates by a quarter percentage point on Thursday. Such a move could set off additional dips in high-yield certificate of deposit (CD) rates, many of which decreased both before and after the September Fed rate cut.

A fixed-rate CD earns the same annual percentage yield (APY) throughout its entire term, which is why some savers are turning to high-yield CDs now before the going rates potentially drop further.

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 top 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 Quontic Bank 4.95% 1.30% $61
6-month Bank5 Connect 4.85% 1.72% $120
9-month America First Credit Union 4.60% N/A $172
1-year Limelight Bank 4.50% 1.75% $225
18-month Schools First Federal Credit Union 4.20% 1.84% $318
2-year Schools First Federal Credit Union 4.20% 1.51% $429
3-year Schools First Federal Credit Union 4.20% 1.41% $657
4-year Schools First Federal Credit Union 4.20% 1.45% $894
5-year Schools First Federal Credit Union 4.35% 1.42% $1,186

Note: Annual percentage yields (APYs) shown are as of November 6, 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.

 

Where to find the highest-paying CDs

As seen in our table above, all of the top-paying CDs are available from banks and credit unions that operate mostly or entirely online. Online-only financial institutions are known for offering higher yields than big brick-and-mortar banks. Common reasons for this are:

  • Relatively new online-only banks may pay highly competitive yields as a way to attract customers. (Conversely, established brick-and-mortar banks that don’t have a strong need for new deposits generally don’t offer high APYs.)
  • Financial institutions operating entirely online don’t bear the cost of maintaining branches, and some may pass along the savings to customers through higher yields.

Whether or not they maintain branches, credit unions are commonly a source of high yields. This is because they’re not-for-profit institutions, so profits are distributed to members through dividends.

What the current interest rate environment means for CDs

Recent federal funds rate changes: The Federal Reserve lowered its benchmark interest rate by 50 basis points, or half a percentage point, on Sept. 18, which brought down the Federal Funds rate target range to 4.75-5 percent. Prior to this rate cut, the Fed had gradually raised rates 11 times in 2022 and 2023, and rates stood at a 23-year high leading up to the latest 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 Sept. 18 rate cut of 50 basis points could spur decreases in CD APYs, in addition to decreases that have already taken place in 2024 as banks anticipated Fed rate cuts.

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.

How inflation factors in

After holding its key benchmark rate steady since July 2023 to combat high inflation, officials cut the federal funds rate by half a percentage point, or 50 basis, points on Sept. 18. The rate cut comes at a time when the consumer price index (CPI), a measure of inflation, has decreased significantly from its decades-high annual rate of 9.1 percent in June 2022. It’s currently at 2.4 percent.

“Inflation is now much closer to our objective, and we have gained greater confidence that inflation is moving sustainably toward 2 percent,” Fed Chair Jerome Powell said in remarks following the Fed’s latest decision to lower rates on Sept. 18.

The current rate of inflation is a significant factor that affects what the Fed decides to do with rates. A decrease in the federal funds rate, say close to or below the current inflation rate of 2.4 percent, can be bad for savers. Namely, it can translate to lower APYs on many CDs and savings accounts. Meanwhile, a fed rate cut can be good for borrowers as interest rates tend to decrease on loans.

Is now still a good time to open a new CD?

This year, top CD rates have been declining gradually due to strong signals from the Fed that it would cut interest rates. Now that the Fed has cut rates by 50 basis points, it remains to be seen how much lower CD APYs will decline, and how soon. Currently, however, top APYs are earning yields well above the rate of inflation.

Investing in a CD now means potentially being able to lock in high rates prior to a drop in interest rates,” says Kurt Whitesell, a certified financial planner and CFP Board ambassador.

CD FAQs

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.

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.