If you're looking for a safe place to store your savings, a certificate of deposit (CD) can be a great choice. These accounts often provide higher interest rates than traditional checking and savings accounts. However, CD rates can vary widely. Learn more about today's CD rates and where to find them High yield CDs with the best rates available.
CD rates are relatively high compared to historical averages. This is especially true for shorter periods (around a year or less). For short-term CDs, you can expect the best offers to hover around 4% APY. Longer term CDs, however, are slightly lower.
Today, the highest CD rate 4.27% APY, offered by NexBank on its 1-year CD. However, a large opening deposit of $25,000 is required.
The next highest rate can be found at two banks: Synchrony (13 month term) and Marcus by Goldman Sachs (one year). Both banks offer 4.25% APY.
Here's a look at some of the best CD rates available today from our trusted partners:
The Federal Reserve began lowering the federal funds rate in light of slowing inflation and a generally better economic outlook. It cut its target rate three times at the end of 2024 by a total of one percentage point.
The Fed has indicated that it will continue to cut its target rate in 2025. However, it now forecasts a total of two cuts, down from its previous projection of four.
The federal funds rate does not directly affect deposit interest rates, although they are correlated. When the Fed lowers rates, financial institutions usually follow suit (and vice versa). So now that the Fed has lowered its rate, CD rates are starting to drop again. That's why now could be a good time to put your money in a CD and lock in today's best rates.
The process for opening a CD account varies by financial institution. However, there are some general steps you can expect to follow:
-
CD research rates: One of the most important factors to consider when opening a CD is whether the account provides a competitive rate. You can easily compare CD rates online to find the best offers.
-
Choose an account that meets your needs: Although the CD interest rate is a key consideration, it is not the only one. You should also evaluate the length of the CD term, minimum opening deposit requirements, and fees to ensure that a particular account fits your financial needs and goals. For example, you want to avoid choosing a CD term that is too long, otherwise you will be text early withdrawal penalty if you need to withdraw your money before the CD matures.
-
Prepare your documents: When opening a bank account, you'll need to provide a few pieces of information, including your Social Security number, address, and driver's license or passport number. Having these documents to hand will help streamline the application process.
-
Complete the application: These days, many financial institutions allow you to apply for an account online, although in some cases you may have to visit the branch. Either way, the new CD request should only take a few minutes to complete. And in many cases, you'll get your approval decision immediately.
-
Funding the account: Once your CD application has been approved, it's time to fund the account. This can usually be done by transferring money from another account or posting a cheque.
Read more: Step by step instructions for opening a CD