Yesterday’s Federal Reserve interest rate pause — widely expected for over a month — hasn’t stopped banks and credit unions from raising CD rates. Just a week after we began counting CDs nationwide that offer an interest rate of 5.65% APY or higher, the number in this elite tier has increased from 15 to 21.
At the top of this list is the highest CD rate available nationwide at 5.80% APY, and it comes in a flexible package. Offered by Credit Human, you can get this plan for any CD term you choose between 12 and 17 months. You also have the opportunity to earn 5.80% APY on a 1-year Federal Savings Bank certificate.
The central theses
- The industry-leading interest rate in our daily ranking of the best CDs remains 5.80% APR, available with terms of 12 to 17 months.
- The number of CDs available nationwide that cost 5.65% or more rose again today, now standing at 21. That’s up from 15 a week ago.
- Anyone with a huge deposit can earn the highest nationwide interest rate of all – 5.85% APR, available for a 170-day term.
- The Fed announced yesterday that it was leaving interest rates unchanged for now, having last raised rates in July. But a possible Fed rate hike in November or December is still on the table.
If you want to extend one of today’s record-breaking interest rates further into the future, you can get a 5.23% APR with the best 3-year CD. But for the first time since the Fed began raising interest rates in early 2022, last week there was an opportunity to earn 5.00% on a four-year CD. Previously, the key interest rate for 4- and 5-year CDs was only in the upper range of 4.00%.
Click on the desired term in the left column above to display the 15-20 best tariffs nationwide for any term.
Do you have a huge deposit? You have the opportunity to earn even more. The highest jumbo interest rate is currently 5.85% APY – available for a 170-day certificate if you have a deposit of at least $100,000.
*Indicates the highest APY offered in each term. Click the column headings above to view our lists of the highest paying CDs by term for bank, credit union and jumbo certificates.
Note that jumbo CDs do not always provide a higher return than standard certificates. Sometimes you can work just as well or better with a standard CD, as you can see from five of the terms above. Therefore, always make sure to purchase both types of certificates before making a final decision.
What will CD prices be this year?
The Federal Reserve has been aggressively battling decades-long inflation since March last year, raising the key interest rate rapidly in 2022 and then with more moderate hikes in 2023. The Fed has implemented 11 hikes in 13 meetings – the most recent hike on July 26 – for a cumulative increase of 5.25%. This has created record interest rates for CD buyers as well as anyone who holds cash in a high-interest savings or money market account.
Yesterday, the Fed announced a rate hike, keeping the central bank’s key interest rate at its highest level since 2001. But in his post-announcement press conference, Fed Chairman Jerome Powell made it clear that the rate hike is simply about pausing to see. what impact this has Previous rate hikes will remain in place and more economic data may be received for the Fed’s consideration. He noted that September’s dovishness should not be interpreted as a signal that the Fed’s rate-hiking campaign is inevitably over.
“We are prepared to raise interest rates further if necessary,” Powell said.
Yesterday’s meeting also included a quarterly release of the Fed’s “Summary of Economic Forecasts,” which includes a “dot plot” chart showing where each Fed member believes the federal funds rate will be at the end of the coming years. The current dot chart shows that nearly two-thirds of Fed policy committee members (12 out of 19) believe another rate hike will be implemented this year. The remaining seven members assume that the key interest rate will remain stable until 2023.
For 2024, the dot plot shows that 13 of the 19 committee members expect one or more interest rate cuts, with an average decline of 0.50% expected. But that’s a change from the June dot plot, which expected a more significant decline in interest rates in 2024. This suggests that Fed members are currently assuming that interest rates will have to remain elevated for longer than before.
For now, we know that another possible hike by the Fed in 2023 would certainly push CD rates slightly above their already record levels. But until then, markets and CD buyers will have to guess whether today’s ban is temporary or permanent. Once the end of the Fed’s campaign finally appears to be in sight, it will be a sign that CD rates have reached a peak.
Note that the “peak interest rates” mentioned here are the highest interest rates available nationwide, as determined by Investopedia in its daily interest rate research at hundreds of banks and credit unions. This is significantly different from the national average, which includes all banks that offer CDs with this term, including many large banks that pay low interest rates. As a result, national averages are always quite low, while the top prices you can find when shopping are often five, ten or even 15 times higher.
Disclosure of tariff collection methodology
Every business day, Investopedia tracks rate data from more than 200 banks and credit unions that offer CDs to customers across the country and daily ranks the best-paying certificates in each key time period. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions) and the minimum CD deposit cannot exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require that you donate to a specific charity or association in order to become a member, if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or do a certain type of work ), We exclude credit unions whose donation needs are $40 or more. For more information on how we choose the best plans, see our full methodology.
Investopedia / Alice Morgan & Sabrina Jiang