Are CDs Still Worth It? Yes, They Are—But Don't Sleep on These Top Rates

Published October 02, 2024

Key Takeaways

Though today's best CD rates have come down from 20-year peaks last fall, they still offer historically high returns in the 4% and 5% ranges.
The magic of CDs is that they lock in a rate that's yours to keep until the certificate matures—whether that's 6 months or 5 years from now.
On a $5,000 deposit, today's best 6-month CD will pay $126 in interest over its term, while you can earn $513 with the leading 2-year CD.
Want a different term, or have a different deposit amount? We lay out various options based on today's best CD rates.
Since Fed rate cuts are expected later this year and next, the sooner you can lock in a guaranteed CD rate, the more you'll earn.

The full article continues below these off𓆏ers from our partners.

How Much Do Today's Best CDs Pay?

Thanks to the 澳洲幸运5官方开奖结果体彩网:Federal Reserve's aggressive rate-hike campaign in 2022–2023, 澳洲幸运5官方开奖结果体彩网:certificate of deposit (CD) rates surged to historic highs last fall—briefly reaching above 6%. But the Fed has now started lowering its benchmark interest rate🌼, and CD and savings account rates are falling as a result, with the best options a bit above 5%.

If you've heard this news and thought you'd missed the boat on opening a CD, let us set you straight. CDs are still an excellent pla♛ce to stash some of your savings, for🍃 two reasons:

You can still earn returns in the 4% and 5% ranges across every CD term—which is historically very high.
CDs provide a locked-in rate that's predictable for the life of the CD. So whether you choose a short 6-month term or a long 5-year duration, your rate is guaranteed until maturity.

This rate lock is why CDs are smart when interest rates are falling, as they are now. Future CD rates, as well as savings account rates, are expected to keep drifting lower. But if you lock in one of today's high rates you'll be able to enjoy that return far into the future.

So how much exactly can you earn with 澳洲幸运5官方开奖结果体彩网:today's best CDs? The table below shows how much different deposit amounts will earn with the top nationwide CD in each major term. As you can see, many options will deliver returns in the hundreds of dollars, and some into the thousands.

Amount You Can Earn With Today's Best CD Rates

Total earnings at the end of each CD term
CD Term	Today's Best APY	$1,000 deposit	$2,500 deposit	$5,000 deposit	$10,000 deposit	$15,000 deposit	$25,000 deposit
6 months	5.10%*	$25	$63	$126	$252	$378	$630
1 year	5.05%	$51	$126	$253	$505	$758	$1,263
2 years	5.00%	$103	$256	$513	$1,025	$1,538	$2,563
3 years	5.00%	$158	$394	$788	$1,576	$2,364	$3,941
4 years	4.09%	$174	$435	$870	$1,739	$2,609	$4,348
5 years	4.06%	$220	$550	$1,101	$2,202	$3,302	$5,504

*The highest nationally available 6-month CD rate is currently 5.50% APY, but the offer is limited to deposits only up to $5,000. To avoid confusion, we have based all of the 6-month calculations above on the runner-up rate of 5.10%.

Choosing the Right CD Term

Opening a CD requires choosing how long you can live without your money—and it's a commitment with teeth. Cash out the CD before it reaches maturity and you'll be hit with an 澳洲幸运5官方开奖结果体彩网:early withdrawal penalty. So, carefully consider your personal financ♔ial timeline when deciding which ꩵCD term is most manageable for you.

What About a High-Yield Savings Account Instea♏d?

The 澳洲幸运5官方开奖结果体彩网:best high-yield savings account in the country is currently paying 5.50%, with several other options paying 5.00% or better. This can sound appealing because 5.50% is higher than the best CD rates quoted above. But savings account rates are variable, meaning the bank or 澳洲幸运5官方开奖结果体彩网:credit union can drop your rate at any time, and with😼out warning.

Given the Fed's expected rate cuts later this year and in 2025, savings account rates are almost certain to decline. So while you can earn up to a 5.50% 澳洲幸运5官方开奖结果体彩网:annual percentage yield (APY) right now, that top rate might be closer to 5% by year-end, and could easily dip into the 4% range next year. In contrast, a 5% CD you open now will k𝔍eep paying that rate until its term ends.

Win by Combining Strategies

A smart way to balance higher earnings with access to your money is to split your savings into two buckets: a high-yield savings account and a CD. By keeping some money in a savings account, you'll have cash you can withdraw in an emergency. Meanwhile, putting a portion of your savings in a CD lets you earn one of today's high rates for months or years down the road, protecting your earnings from future Fed rate cuts.

Daily Rankings of the Best CDs and Savings Accounts

We update the💦se rankings every business day to give you the best deposit rates available:

澳洲幸运5官方开奖结果体彩网:Best 3-Month CD Rates

澳洲幸运5官方开奖结果体彩网:Best 6-Month CD Rates

澳洲幸运5官方开奖结果体彩网:Best 1-Year CD Rates

澳洲幸运5官方开奖结果体彩网:Best 18-Month CD Rates

澳洲幸运5官方开奖结果体彩网:Best 2-Year CD Rates

澳洲幸运5官方开奖结果体彩网:Best 3-Year CD Rates

澳洲幸运5官方开奖结果体彩网:Best 4-year CD Rates

澳洲幸运5官方开奖结果体彩网:Best 5-Year CD Rates

澳洲幸运5官方开奖结果体彩网:Best High-Yield Savings Accounts

澳洲幸运5官方开奖结果体彩网:Best Money Market Accounts

Important

Note that the "top rates" quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.

Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, 澳洲幸运5官方开奖结果体彩网:read our full methodology.

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