October 31, 2024 – Forbes Advisor – Technologist

As of today, the best interest rates on CDs—certificates of deposit—pay up to 5.37%, based on certificate term lengths. Here’s an overview of how CD rates are changing, followed by a guide to the current top CD rates across different terms.

Related: Compare the Best CD Rates

Highest CD Rates Today

A CD is a savings account with a fixed interest rate and a maturity period, which is what makes them time deposit accounts. When you open a CD, you agree to lock up your deposit without touching it until the CD’s term is up, whether that’s in six months or five years. Your patience is rewarded with interest that’s usually better than what you’d earn from a regular savings account.

Withdraw money from a CD before “maturity”—when it reaches the end of its term—and you can be slapped with stiff penalties. For example, you can lose up to six months’ worth of interest if you make an early withdrawal from a one-year CD.

The longer the term, the harsher the early withdrawal penalty. It’s not unusual to lose one full year’s worth of interest or more if you break open a five-year CD too soon. Be absolutely certain you understand the penalty before you make your investment.

Today’s 3-Month CD Rates

For short-term savings goals, three-month CDs might make sense. The current average rate on a three-month CD sits at 1.34%, but the highest rate is 5.00%. Last week, three-month CDs were earning 1.32% on average.

Today’s 6-Month CD Rates

If you’d prefer a CD with a shorter term than one year, today’s best rate on a six-month CD is 5.25%. That’s unchanged from a week ago. The current average APY for a six-month CD is 1.88%, compared to 1.86% last week at this time.

APY provides a more accurate depiction of the annual interest you’ll earn with a CD because it takes into account compound interest. That’s the interest you earn not only on your deposit (or principal) but also on the interest in the account.

Today’s 1-Year CD Rates

The highest interest rate currently being offered on a one-year CD—one of the most popular CD terms—is 5.37%. If you find a 12-month CD with a rate in that vicinity, you’ve found a good deal. One week ago, the best rate was the same.

The average APY, or annual percentage yield, on a one-year CD is now 1.92%, up from 1.87% a week ago.

Today’s 2-Year CD Rates

If you can hold out for two years, 24-month CDs today are being offered at interest rates as high as 4.76%. The top rate last week at this time was a similar 4.76%. Two-year CDs now have an average APY of 1.67%. That’s a jump from 1.64% last week at this time.

Today’s 3-Year CD Rates

CDs with longer terms often have some of the most attractive interest rates and APYs—if you’re willing to keep your money locked up for years.

Within the last week, the highest rate on a three-year CD has been 4.65%, so you’ll want to shop around for that rate or something near it.

Today’s 5-Year CD Rates

On a five-year CD, the highest rate today is 4.31%, down from 4.46% one week ago. APYs are averaging 1.59%, up from 1.57% at this time last week.

The longer the term, the harsher the early withdrawal penalty. It’s not unusual to lose one full year’s worth of interest or more if you break open a five-year CD too soon. Be absolutely certain you understand the penalty before you make your investment.

Today’s Jumbo CD Rates

The best rate on today’s jumbo CDs is 5.25% for a 6-month term. The average APY for this category of CD is currently 1.91%, compared to 1.81% last week.

Most jumbo CDs require a minimum deposit of $100,000—and some even require $250,000. However, there’s no universally agreed-upon definition regarding what qualifies as a “jumbo” CD. Some banks and credit unions slap the label “jumbo” on CDs you can open with $50,000, $25,000 or even less.

Other Top CD Rates by Term

Related: CD Interest Rates Forecast: How Good Will They Get?

The Benefits of Building a CD Ladder

If you want to earn great returns without sacrificing access to your hard-earned cash, a CD ladder might be just what you’re looking for. This simple savings strategy involves spreading your funds across several CDs instead of putting all of your eggs in one basket.

Say you have $5,000 to invest in CDs. Rather than putting that entire amount in a single, high-yield CD, consider putting $1,000 in five CDs with terms ranging from one to five years. As each CD reaches maturity, reinvest the funds into a new five-year CD. If you manage to do this for five years, you’ll then have one, high-yield CD maturing every 12 months.

If you experience financial difficulties during any particular year, you can withdraw your funds from the maturing CD instead of starting a new one. This degree of flexibility can give you peace of mind by providing a steady flow of maturing CDs.

To ensure you get the best CD rates, compare offers from leading banks and credit unions. The current CD landscape is highly competitive, so it’s worth taking time to research your options. Once you identify the financial institution that best suits your needs, start a ladder by splitting your money across several CDs.

Best CD Rates Offered by Banks in October 2024

CD rates are rarely the exact same between any two banks, so you should comparison shop when looking for a new account. You may decide to stick with your current bank because it’s convenient or join a new bank to take advantage of higher rates. To find the right CD, look at the specific term you’re interested in with a few different banks.

Traditional, brick-and-mortar banks tend to offer lower CD rates, in general, than online banks without any branches. For example, Chase Bank CD rates currently range from 0.01% to 4.00% while Discover Bank CD Rates currently range from 2.00% to 4.10%, Bank of America CD Rates currently range from 0.03% to 4.00% and Marcus By Goldman Sachs CD Rates currently range from 3.75% to 4.20%.

Be sure to compare a few options with the types of banks you’re most comfortable with.

Other top CD rates by banks include:

Do CDs Cost Anything?

You must fork over funds to open a CD account, but you get all of that money back—plus interest—when the CD reaches maturity. You won’t have to worry about any one-time or recurring fees, but you may sacrifice some of all of the interest you’ve earned if you withdraw from a CD before its term is over.

Methodology

Curinos determines the average rates for certificates of deposit (CDs) by focusing on specific CDs and excluding others. Certain types, such as promotional offers, relationship-based rates, private, youth, senior, student/minor, affinity, bump-up, no-penalty, callable, variable, step-up, auto transfer, club, gifts, grandfathered, internet-only and IRA CDs are not considered in the calculation.