Today’s Certificate of Deposit (CD) Interest rates are some of the highest we’ve seen in more than a decade thanks to several rate hikes by the Federal Reserve. However, the Fed finally cut its target rate in September, so now may be your last chance to lock in a competitive rate.
CD rates vary widely among financial institutions, so it’s important to make sure you’re getting the best rate when shopping for a CD. Below is a breakdown of today’s CD rates and where to find the best offers.
Historically, longer-term CDs have offered higher interest rates than shorter-term CDs. Typically, this is because banks will pay better rates to encourage savers to keep their money on deposit for longer. However, in today’s economic climate, the opposite is true.
Check out our picks for the best CD accounts available today>>
As of January 5, 2025, CD rates remain high by historical standards. However, the highest CD rates can be found for shorter terms of about a year or less.
Today, the highest CD rate is 4.25% APY, offered by Marcus through Goldman Sachs on its 1-year CD. A minimum deposit of $500 is required.
Here’s a look at some of the best CD rates available today from our certified partners:
The amount of interest you can earn from a CD depends on it Annual percentage rate (APY). This is a measure of your total earnings after one year when considering the base interest rate and how often the interest is compounded (CD interest is usually compounded daily or monthly).
Say you invest $1,000 in a one-year CD with 1.81% APY, and interest compounds monthly. At the end of that year, your balance will be $1,018.25 — your initial $1,000 deposit, plus $18.25 in interest.
Now let’s say you choose a one-year CD that offers 4% APY instead. In this case, your balance would increase to $1,040.74 over that period, including $40.74 in interest.
The more you deposit into a CD, the more you stand to earn. If we take our same example of a one-year CD at 4% APY, but deposit $10,000, your total balance when the CD matures will be $10,407.42, meaning you’ll earn $407.42 in interest.
read more: What is a good CD rate?
When choosing a CD, the interest rate is usually top of mind. However, rate is not the only factor you should consider. There are several types of CDs that offer different benefits, although you may need to accept a slightly lower interest rate in exchange for more flexibility. Here’s a look at some common types of CDs you might consider beyond the traditional CD:
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Bump-up CD: This type of CD allows you to request a higher interest rate if your bank’s rates go up during the term of the account. However, you are usually only allowed to “bump up” your rate once.
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No-Penalty CD: Also known as a liquid CD, this type of CD gives you the option to withdraw your funds before the maturity date without paying any penalty.
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Jumbo CD: These CDs require a higher minimum deposit (usually $100,000 or more), and often offer a higher interest rate in return. In today’s CD rate environment, however, the difference between traditional and jumbo CD rates may not be that great.
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Brocade CD: As the name suggests, these CDs are not bought directly from the bank but through a brokerage. Brokered CDs can sometimes offer higher rates or more flexible terms, but they also carry more risk and may not be FDIC-insured.
