Opening a certificate of deposit (CD) is very similar to opening any bank deposit account. Locking in a high CD rate now could help you maximize your savings. If and when the Fed lowers its target rate, then CD rates may also decrease. By November 2023, the fed funds rate was a target of 5.25%-5.50%, and the best CD rates were between 5.25% and 6.00%.

Over the next two years, the Fed increased the fed funds rate to combat high inflation. In November 2021, the best CD rates nationwide across terms of 6 months to 5 years ranged from 0.70% to 1.35% APY. In 2020, the Federal Reserve lowered the fed funds rate to near zero. When the fed funds rate is higher, CD rates tend to be higher.ĬD rates hit historic highs in 2023, but that was not always the case. So when the fed funds rate is low, CD rates tend to be lower. For example, if the rate is 5.50% for a 1-year CD, the bank or credit union will pay you 5.50% in interest on your money for keeping it in the account, untouched, for 12 months.ĬD rates typically follow the trend of the fed funds rate. What Is a CD Rate?Ī CD rate is an interest rate that shows what a bank or credit union will pay you for depositing your money with them for a certain period of time. These accounts are more liquid, so if you feel you may need access to your money sooner, consider a savings or money market account rather than a CD.

Many of the banks and credit unions in our best CD rates rankings above also offer high-yield savings accounts and/or money market accounts with competitive rates. Ranked by highest APY, then shortest term, then lowest minimumįor more options, see our in-depth 3-month CD rankingsįor more options, see our in-depth 6-month CD rankingsįor more options, see our in-depth 1-year CD rankingsįor more options, see our in-depth 18-month CD rankingsįor more options, see our in-depth 2-year CD rankingsįor more options, see our in-depth 3-year CD rankingsįor more options, see our in-depth 4-year CD rankingsįor more options, see our in-depth 5-year CD rankingsĭepartment of Commerce Federal Credit Unionįor more options, see our in-depth 10-year CD rankings

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