November 21, 2023—Earn 5% Or More – Forbes Advisor

As of today, the best interest rates on CDs—certificates of deposit—pay up to 5.83%, based on certificate term lengths. Here’s an overview of how CD rates are changing, followed by a guide to the current top CD rates across different terms.

Related: Compare the Best CD Rates

Highest CD Rates Today

A CD is a savings account with a fixed interest rate and a maturity period, which is what makes them time deposit accounts. When you open a CD, you agree to lock up your deposit without touching it until the CD’s term is up, whether that’s in six months or five years. Your patience is rewarded with interest that’s usually better than what you’d earn from a regular savings account.

Withdraw money from a CD before “maturity”—when it reaches the end of its term—and you can be slapped with stiff penalties. For example, you can lose up to six months’ worth of interest if you make an early withdrawal from a one-year CD.

The longer the term, the harsher the early withdrawal penalty. It’s not unusual to lose one full year’s worth of interest or more if you break open a five-year CD too soon. Be absolutely certain you understand the penalty before you make your investment.

Current 3-Month CD Rates

For short-term savings goals, three-month CDs might make sense. The current average rate on a three-month CD sits at 1.19%, but the highest rate is 5.83%. Last week, three-month CDs were earning 1.19% on average.

Current 6-Month CD Rates

If you’re interested in a shorter-term CD, today’s best six-month CD rate is 5.59%. That compares with 5.60% a week ago. The current average APY for a six-month CD is 1.61%, compared to 1.60% last week at this time.

APY provides a more accurate calculation of the yearly interest you’ll earn with a CD because it factors in compound interest. That’s the interest you earn not only on your deposit (or principal) but also on the interest in the account.

Current 1-Year CD Rates

The highest interest rate currently being offered on a one-year CD—one of the most popular CD terms—is 5.70%. If you find a one-year CD with a rate in that neighborhood, you’ve found a good deal. One week ago, the best rate was the same.

The average APY, or annual percentage yield, on a one-year CD is now 1.85%, up from 1.84% a week ago.

Current 2-Year CD Rates

If you can hold out for two years, 24-month CDs today are being offered at interest rates as high as 5.51%. The top rate last week at this time was a similar 5.51%. Two-year CDs now have an average APY of 1.65%. That’s a fall from 1.66% last week at this time.

Current 3-Year CD Rates

CDs with longer terms tend to have some of the most attractive interest rates and APYs—if you’re willing to keep your money locked away for years.

Within the last week, the highest rate on a three-year CD has been 5.50%, so you’ll want to shop around for that rate or something near it.

Current 5-Year CD Rates

On a five-year CD, the highest rate today is 5.20%, the same as one week ago. APYs are averaging 1.58%, the same as this time last week.

The longer the term, the harsher the early withdrawal penalty. It’s not unusual to lose one full year’s worth of interest or more if you break open a five-year CD too soon. Be absolutely certain you understand the penalty before you make your investment.

Related: CD Interest Rates Forecast: How Good Will They Get?

Are CDs a Good Deal?

CDs typically pay higher interest than other savings vehicles, even the best high-yield savings accounts and money market accounts. And while they may not offer the kind of enviable returns that are possible with stocks, CDs beat the more attention-getting investments in one regard: They’re one of the safest places to put your money.

Investors lost millions in the 2022 crypto crash, and putting your money into the stock market, real estate or gold and other commodities can be risky, too. But when you buy a certificate of deposit or credit union share certificate from a federally insured financial institution, you can sleep easily with the knowledge that your investment is protected.

The FDIC provides you with up to $250,000 in coverage in the event the bank issuing your CD ever fails. For share certificates purchased from federal credit unions and most state-chartered credit unions, the NCUA insures your money up to the same limit.

Do CDs Cost Anything?

There are no one-time or recurring costs associated with CDs, but you may pay a penalty fee in the form of reduced interest if you withdraw from your CD before it matures. You are required to deposit a minimum amount of cash when you open a CD, but get all of that money back—plus interest—at the end of the CD’s term.

Methodology

Curinos determines the average rates for certificates of deposit (CDs) by focusing on specific CDs and excluding others. Certain types, such as promotional offers, relationship-based rates, private, youth, senior, student/minor, affinity, bump-up, no-penalty, callable, variable, step-up, auto transfer, club, gifts, grandfathered, internet-only and IRA CDs are not considered in the calculation.