Long-term CDs allow you to earn current interest rates for up to five or even 10 years. Getty Images/iStockphoto
If you're saving money for a big expense in the future, you may have run into a challenge. With inflation continuing, it's important to get a meaningful return on your savings. If you earn less than the current rate of inflation, your money's purchasing power will decrease. But that's where certificates of deposit (CDs) come in. Many of today's leading CDs offer returns well above the current rate of inflation.
But current high yields aren't the only reason to invest in these savings vehicles. You can lock in the current high interest rate for the term of the CD. Plus, they're safe investments, typically insured by the FDIC or NCUA on balances up to $250,000.
Compare the best CD rates and increase your earnings today.
What are CD interest rates today?
There's a wide range of CD interest rates available today, depending on the type of CD, terms, and other details. The following CD interest rates are national averages for certain terms as of July 5, 2024, according to Bankrate.
1-year CD Yield: 1.81% APY3-year CD Yield: 1.43% APY5-year CD Yield: 1.43% APY
However, these averages vary widely from the rates actually available with the top CDs today. Below are some of the best current CD rates by term.
6 month CD
Basque Bank: 5.35% APYPopular Direct: 5.35% APYAmerica First Credit Union: 5.25% APY
1 year CD
Basque Bank: 5.30 APY
Popular Direct: 5.30% APY First Internet Bank of Indiana: 5.26% APY
3 Year CD
First Internet Bank of Indiana: 4.61% APYPopular Direct: 4.50% APYQuantic Bank: 4.40% APY
5 Year CD
First Internet Bank of Indiana: 4.50% APYSchool First Federal Credit Union: 4.35% APYQuantic Bank: 4.30% APY
Looking for the best CDs for savings? Compare the best interest rates here and start making money today!
How to get good CD rates
Use these strategies to secure the best CD rates today.
View Online Banking
There's a big difference between the national average savings rate and the best interest rate available, in part because interest rates often vary widely between different types of banks.
Online banks, or the online divisions of major banks, have less overhead to maintain their day-to-day operations because they don't have physical branches. Typically, these banks offer interest rates that track the Federal Reserve's changes over the past few years. Today, you're most likely to find CDs with competitive interest rates from online banks.
In contrast, large banks with branches nationwide often offer lower CD and savings interest rates because they offer easy access to branches and ATMs, and the ability to open checking accounts. Many of the CD rates at these banks are below average, and in some cases close to zero.
Consider short-term CDs
CD terms vary from about one to three months to as long as 10 years, but short-term CDs are often the best way to get the best interest rates right now.
However, due to the overall economic environment, interest rates on short-term CDs (roughly six months to one year) are currently higher than longer-term CDs. In fact, data from Bankrate shows that one-year CD yields have consistently exceeded five-year CD yields since October 2022.
This phenomenon is called an inverted yield curve. “It means that short-term CDs and Treasuries have the highest interest rates, and the longer you get, the lower the interest rates actually are,” says Donald F. Dempsey, CFP, founder of Dempsey Investment Management.
To take advantage of these higher interest rates while still saving for the long term, “buying CDs in increments may be a viable option,” Dempsey says. “Purchase a one-year, two-year, three-year, etc.”
See all of the best short-term CD rates you're eligible for here.
Conclusion
Both CD and savings rates are currently offering higher interest rates than we've seen in years. Take advantage of the opportunity to lock in a great interest rate with flexible terms to help you reach your savings goals faster. To maximize your balance with the best CD interest rates currently available, be sure to compare different banking options and terms that work for you.