The Best CD Rates Are Still Very High

Though certificate of deposit (CD) rates have come down a bit this winter—since climbing to a record 6.50% in late October—today's top CD rates are still historically high. The current national leader is 5.75%, available from Andrews Federal Credit Union for 6 months.

Although today saw two more certificates drop off our list of nationwide CDs that pay a benchmark rate of 5.50% or better, the elite list still contains 26 options. You'll find them in our daily ranking of the best nationwide CDs.

Returns like these could be smart to lock in now, before the Federal Reserve decides to lower the federal funds rate—as that will put increasing downward pressure on CD rates. While we don't know exactly when the Fed will start reducing its benchmark rate, the central bank's Dec. 13 dot plot showed a median prediction among committee members of three rate cuts—totaling 0.75%—sometime during calendar year 2024.

If you want to lock in a stellar rate for a longer term than you can get with the national leader, you may like the 18-month rate of 5.45% APY from . Want to extend your rate guarantee even further? In addition to the leading 2-year rate of 5.27% APY, the best 3-year CD is paying 5.10% APY. You can also lock in an upper 4% return in the 4-year and 5-year CD durations.

While the yields on these longer certificates are lower than shorter-term CDs, securing an extended return means you'll be able to enjoy it until 2026—or even until 2029—when it's likely that rates on high-yield savings accounts and new CDs will have fallen.

Top Bank, Credit Union, and Jumbo CD Rates Today

The best jumbo CD rate remains 5.65% APY on a 17-month term, available from . Beware that the best jumbo CD rates don't always pay more than standard certificates. Often, you can do just as well—or better—with a standard CD. That's the case right now in three of the eight terms below, so it's always wise to shop both certificate types before making a final decision.

Where Are CD Rates Headed This Year?

The Federal Reserve announced last Wednesday that it is holding rates steady, the fourth meeting in a row it's done so. To combat decades-high inflation, the Fed aggressively hiked interest rates between March 2022 and July 2023, raising the federal funds rate to its highest level in 22 years.

This in turn created historically favorable conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account. Rates on CDs continued rising to a peak this fall, reaching their highest levels in two decades.

But with inflation cooling and the Fed in a holding pattern since July, many banks and credit unions have begun lowering their CD rates. And that's likely to continue after this last Fed announcement. That's because the central bank's statement last week abandoned previous language about future rate hikes still being possible. It now appears clear the Fed's rate-hike campaign is finished.

This means we have entered a new phase, where the Fed committee is focused on deciding the right timing to pull the trigger on a first rate cut. But Fed Chair Jerome Powell stated that, though the economy has seen promising progress, inflation is still too high, and the committee therefore won't discuss implementing a rate cut until it feels assured inflation's downward trajectory is both sufficient and sustainable.

Friday's job market report surely won't help on that front. New jobs and wage growth were way higher than expected, which may prompt the Fed to keep rates high longer than investors thought a few days ago.

"The job gains, if not revised down in future releases, will definitely put a dampener on early rate-cut prospects," wrote Scott Anderson, chief U.S. economist for BMO Capital Markets. "The Fed was right to be cautious in signaling near-term rate cuts at (last) week’s FOMC meeting."

The Fed's next rate announcement will be made on March 20. During his press conference last week, Chair Powell indicated he doesn't predict a rate cut will come as soon as the first quarter, saying, "I don't think it's likely the committee will reach a level of confidence by the time of the March meeting."

What this means for CD rates is that they are likely to soften further, since it appears confirmed the Fed will make no further increases. But the declines are likely to be gradual, at least until a Fed rate cut appears imminent. Once that seems to be in the cards, banks and credit unions will likely begin lowering rates more substantially.

How We Find the Best CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, 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 available 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 (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.