Current Top CD Rates and Trends
The CD market is continuously evolving, with various opportunities to secure competitive rates across different terms. Here are some key takeaways:
- The highest CD rate available nationwide is 5.51% APY for a 3-month or 6-month term from TotalDirectBank.
- NexBank offers a top 1-year CD rate of 5.40% APY, while Credit Human provides a 2-year option at 5.25% to lock in rates until 2026.
- BMO Alto leads the 5-year CD rates at 4.80%, offering a strong option for longer-term investments.
- While CD rates have softened slightly from past highs, recent inflation data suggests stability in rates for the near future.
Lock-In 5.35% to 5.51%—On Terms of 3 to 15 Months
TotalDirectBank stands out in the national CD market with a leading rate of 5.51% APY for 3-month or 6-month certificates. This rate, while competitive, requires a minimum deposit of $25,000. For more accessible options, there are five runner-up CDs offering 5.50% with lower minimums. Additionally, multiple CDs with rates above 5.35% can lock in rates until 2025, such as NASA Federal Credit Union’s 15-month offer at 5.40%.
Longer CDs Guarantee Your Rate Until 2026 or Beyond
Considering longer-term CDs can be a strategic move, especially with the potential for declining interest rates in the coming years. Credit Human offers a 5.25% rate for 18 to 23 months, ensuring rate stability until spring 2026. Opting for a 3-year term or securing rates in the 4% range for 4-5 years ahead are also viable options for long-term investments.
Insights from Major Banks and Credit Unions
While smaller institutions often offer top CD rates, a large U.S. Bank like BMO Alto stands out with competitive rates on various CD terms. BMO Alto, the online division of banking giant BMO, provides leading rates in the 5-year term, along with attractive rates on other CD durations.
Current CD Rate Trends and Forecast
CD rates have seen a slight decline from recent highs but remain lucrative compared to the past two decades. The current plateau in rates presents an opportunity to secure favorable yields for future financial goals. It is essential to consider longer-term CDs before potential rate cuts take effect in 2024 and 2025.
Charting the Course for Future CD Rates
The Federal Reserve’s actions in response to inflation have a direct impact on CD rates. While rates have remained stable after recent hikes, the Fed’s cautious approach indicates a potential delay in further rate adjustments. With uncertainty surrounding future rate cuts, CD rates are expected to stay consistent in the near term.
Methodology for Finding the Best CD Rates
Investopedia tracks rate data from over 200 banks and credit unions daily to identify the top-paying certificates across various terms. Criteria for selection include federal insurance, maximum initial deposit limits, and availability in at least 40 states. By adhering to strict criteria, reliable and accurate rankings of the best CD rates are provided for informed financial decisions.