In addition, CD accounts with FDIC-insured banks or NCUA-insured credit unions are protected up to $250,000 per person, per institution if the bank fails. “Although CDs might have penalties for early withdrawal, you could look at those penalties as an incentive to leave your savings alone if you don’t really need to touch it.” “ are a good place to keep short-term savings, like saving for a baby or to buy a home,” said Bola Sokunbi, founder of Clever Girl Finance and CNET Financial Review Board member. When you open a CD, you lock in the rate in exchange for agreeing to keep your funds in the account until the term is up.

CD rates are typically on par with high-yield savings account rates, but savings account rates are variable, which means your APY could change at any time.

The benefits of opening a CD nowĬDs are ideal for those who want a safe place to put their money while earning some extra interest. So, if you’ve been thinking of opening a CD, now is the time to do it before rates drop further. “Together with comments recently from the Federal Reserve chair, Jerome Powell, this has led to the expectation that we have reached the peak of the interest rate cycle.”ĬD rates aren’t likely to drop precipitously in the near future, but even the gradual erosion we’ve seen lately makes a difference in your bottom line. “Consumer Price Index (CPI) numbers for October showed below-expectation inflation for both headline CPI (3.7% to 3.2%) and core CPI (4.1% to 4.0%),” said Jesse Carlucci, Ph.D., CFP, Chief Investment Officer at Arrow Investment Management LLC. Several banks have lowered their long-term CD rates recently, and experts expect rates will continue to decline over the next several months. 27, rates have gone down slightly for one- and three-year CDs, continuing the trend we’ve seen over the past few weeks. Here’s where rates stand compared to last week: Term

As a result, banks have begun easing their rates. This rate affects how much it costs banks to borrow and lend money, so the higher it is, the higher banks raise their CD rates to attract new customers (and their money).īut with inflation finally cooling, the Fed has opted to pause rate hikes at its last two meetings. Where are CD rates heading?ĬD rates have steadily increased since March 2022 as the Federal Reserve regularly raised the federal funds rate to combat inflation. Earnings are based on APYs and assume interest is compounded annually. 1, 2023, based on the banks we track at CNET. Here are some of the top CD rates available right now and how much you could earn if you deposited $5,000 today.

Cd rate interest calculator