Sunny pricing news for CD shoppers has been coming almost daily for months, but today’s development is the biggest yet: you can now get a historic 6.00% API on CD nationwide.
After hitting 4.00% a year ago and 5.00% in December, it’s a milestone where we wonder if the best CD rates will be reached. And for most of the past six weeks, the lead rate has been held at 5.75% API. But today you can score from 6.00% APY. America 1 Credit Union Within 1 year.
Key receivers
- The leading rate among the best CDs available nationwide has risen to 6.00% APY, available over a 1-year term.
- This is the first CD nationwide to offer at least 6.00% since the Fed began raising interest rates 17 months ago.
- Our list of CDs paying 5.50% API or higher has grown to 40 today, up from 15 in early August.
- CD rates could rise further this year as the Fed may raise interest rates again if inflation does not cool enough in the coming months.
You’ll find the highest CD rates from our partners to help you earn as much as possible, followed by more information on the best paying CDs available for US customers everywhere.
Always make sure you understand the bank or credit union’s early withdrawal penalty for the CD you are considering. The penalty policies vary widely – from mild to severe – and you are fully within your rights to ask for the policy to be explained to you before committing your funds.
Always make sure you understand the bank or credit union’s early withdrawal penalty for the CD you are considering. The penalty policies vary widely – from mild to severe – and you are fully within your rights to ask for the policy to be explained to you before committing your funds.
In addition to the new rate leader, you have several other options to earn a star rate. Winners of the contest will include a 5.75% API rate for one of three institutions offering 9, 10 or 12 month contracts. But if you have at least a $50,000 jumbo deposit, that’s about 5.80% APY for 12 or 18 months — or 5.85% APY for 170-days, though you’ll need $100,000 or more for that top jumbo rate.
Looking to maintain a record rate for more than two years? You can score a 5.13% API from the top 3-year CDs-rated leader, or a 5.22% API from the 3-year jumbo leader. Or you can extend that to four years with a 5.12% APY Jumbo Certificate.
Despite the perception that a larger deposit entitles you to higher fees, that’s not always the case for jumbo certificate prices, which pay less than standard CDs. Although today’s best jumbo offers, which typically require a deposit of $100,000 or more, beat the best standard rates in five CD terms, you can do as well or better with a standard CD in the remaining three terms. So always make sure to buy each certificate before making a final decision.
Despite the perception that a larger deposit entitles you to higher fees, that’s not always the case for jumbo certificate prices, which pay less than standard CDs. Although today’s best jumbo offers, which typically require a deposit of $100,000 or more, beat the best standard rates in five CD terms, you can do as well or better with a standard CD in the remaining three terms. So always make sure to buy each certificate before making a final decision.
Will CD prices rise this year?
This year has seen CD rates hit record highs, but they could rise even higher. That’s because some banks and credit unions are reacting to the central bank raising the federal funds rate at its July 26 meeting. It’s also important that the Federal Reserve keeps the door open for hikes, especially in 2023.
The Fed has been aggressively fighting the high inflation rate since March of last year. The Fast and the Furious increased in 2022, with a moderate increase in 2023. It reached its highest level since 2001. That created historic conditions for CD buyers, as well as anyone with cash in a high-yielding savings or money market account.
The Fed’s official July announcement gave no firm indication that it would raise the benchmark rate this year. The written statement simply reiterated the Fed’s commitment to returning inflation to the 2 percent level it has been at.
In a speech at the Jackson Hole Economic Symposium on Friday, Fed Chairman Jerome Powell said that if inflation does not fall sufficiently in the coming months or if economic growth is too rapid (which would put more pressure on inflation). .) He stated that the Fed can maintain the rate, and pointed out that raising this rate will unnecessarily harm the economy. The next meeting of the federation is scheduled for September 19-20. Recent public comments from other members of the federation suggest they may be divided on the issue.
Currently, only 10% of traders are expecting the Fed to raise interest rates at the September meeting, according to the future prospects of the Fed Fund published by the CME Group. The Fed is likely to raise the benchmark rate in November, giving markets a 45% chance of a rate hike announcement.
Another hike by the Fed will certainly add a little more fuel to CD prices. But if the September decision is a rate hike, markets — and CD buyers — may be left wondering if that will be a temporary or permanent pause. With the Fed finally looking like it’s ready to end its rate hike campaign for good, that means CD prices have reached record highs.
Note that the “peak rates” quoted here are the highest rates nationwide that Investopedia has identified in its daily rate survey of hundreds of banks and credit unions. This is very different from the national average, where all banks that offer CDs with that term, including many large banks, charge a small fee in interest. So, while national averages are always very low, the highest price you can get by trading is often five, 10 or 15 times higher.
Note that the “peak rates” quoted here are the highest rates nationwide that Investopedia has identified in its daily rate survey of hundreds of banks and credit unions. This is very different from the national average, where all banks that offer CDs with that term, including many large banks, charge a small fee in interest. So, while national averages are always very low, the highest price you can get by trading is often five, 10 or 15 times higher.
Disclosure of collection method
Each business day, Investopedia tracks rate data from more than 200 banks and credit unions nationwide that offer CDs to their customers and determines the highest-paying certificates for each major period. To qualify for our listings, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD’s minimum initial deposit must not exceed $25,000.
Banks must be present in at least 40 states. 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 (for example, you don’t live in a certain area or work in a certain occupation), credit unions don’t have a donation requirement of $40 or more. For more on how we choose the best rates, read our full methodology.
Investopedia / Alice Morgan and Sabrina Jiang
