November 27, 2024—Earn 5% Or More – Forbes Advisor – Technologist

The best interest rates on CDs—certificates of deposit—range as high as 5.37% today, which is far higher than CD rates were a few years ago. Here’s an overview of the best CD rates for you.

Highest CD Rates Today by Term

CD Rates Today

A CD is a kind of savings account with a fixed interest rate for a given term. You can access your principal and interest payments once the CD term expires; if you withdraw money before that time, you’ll incur an early withdrawal penalty. Traditionally, the longer a CD term, the higher the yield, but that dynamic hasn’t held in recent years. Make sure you select a CD that matches up with when you’ll need the money.

Average CD Rates

Today’s 3-Month CD Rates

Three-month CDs are a good option for short-term savings goals. The current average rate on a three-month CD sits at 1.31%, but the highest rate is 5.00%. Last week, three-month CDs earned an average of 1.32%.

Today’s 6-Month CD Rates

A six-month CD offers a nice blend of high yields and short-term time commitment, and the highest yield you can find is 5.25%. The top rate was the same last week. The current average APY for a six-month CD is 1.86%, consistent with last week at this time

Today’s 1-Year CD Rates

The highest interest rate currently available on a one-year CD—one of the most popular CD terms—is 5.37%. If you discover a one-year CD with a rate in that neighborhood, you’re getting 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 1.90%, the same as 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 4.52%. The top rate last week at this time was a similar 4.52%.

Two-year CDs now have an average APY of 1.67%, the same as last week at this time.

Today’s 3-Year CD Rates

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%. APYs are averaging 1.59%, the same as this time last week.

The longer the term, the higher 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 early. 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 5.37% for a 6-month term. The average APY for this category of CD is currently 1.92%, compared to 1.82% 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?

Best CD Rates Offered by Banks in November 2024

CD rates are rarely the 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:

Other top CD rates by banks include:

How CDs Work

To open a CD, start by establishing an account with a bank and making a one-time, upfront payment, which constitutes your principal. Many banks require you to deposit a minimum amount—which can be anywhere from hundreds to thousands of dollars—to open a CD. At credit unions, CDs are often referred to as share certificates.

The timer on your CD term begins once you deposit your principal. You begin earning interest, and the bank or credit union will provide you with monthly or quarterly statements reflecting how much you’re accumulating.

Since early withdrawal penalties eat into your earnings, it’s in your best interest to avoid tapping your CD before the term matures. In some cases, you may even face early withdrawal penalties so stiff they cut into your principal.

Are CD Rates Worth It?

If you want the best interest rate on your savings, CDs are usually your best bet, outpacing even the best high-yield savings accounts and best money market accounts. You will have to do without the money for as long as the term lasts; otherwise you’ll owe an early withdrawal penalty.

Even still, you may not be that impressed since potential investments, such as stocks, tend to outperform CDs over the long haul. Why settle?

The issue is that stocks, and even bonds, are much more volatile than CDs. Stocks crashed nearly 20% in 2022, while bonds dropped 13%. Imagine a fifth of your savings going “poof” over the course of a year. Not a happy thought, is it?

CDs and stocks perform different roles in your overall financial plan. CDs are a depot for a portion of your savings you don’t need immediately, while stocks provide solid long-term returns. You don’t want to risk cash you’re depending on.

The Federal Deposit Insurance Corp. provides you with up to $250,000 in coverage in the event the bank issuing your CD ever fails. For share certificates purchased from federal credit unions and most state-chartered credit unions, the National Credit Union Administration insures your money up to the same limit.

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

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.

Frequently Asked Questions (FAQs)