CD Rates Are High, Shop Around to Get the Best Returns
High-interest CD rates are back — shop around for the best 5%+ deals.


To combat inflation, the Federal Reserve has raised interest rates 11 times since March 2022. And as interest rates keep rising, so do rates on high-yield savings accounts and CDs.
As was expected, the Federal Reserve held interest rates steady for the second consecutive time at its November policy-setting meeting. This pause in rate hikes means the fed funds rate remains at a target range of 5.25% to 5.5%, the highest it’s been in 22 years. However, the Federal Reserve has signaled there will likely be another rate hike later this year. While inflation is down from last summer, when it surpassed 9%, it’s not at the Fed’s desired 2%.
The Federal Reserve’s decision means that for most high-yield accounts, rates will remain constant. However, if the Fed decides to raise rates again before the year is through, there's a chance savings rates could also rise. Keep in mind that as inflation starts to cool, it’s a good idea to take advantage of savings rates while they remain high, as yields on CDs are expected to peak and then level by the end of the year.
According to Bankrate, by the end of 2023, the national average for one-year CDs is estimated to increase to 1.8% up from 1.38% at the end of 2022. Further, the national average for five-year CDs will reach 1.5% by the end of this year, with some of the highest-yielding accounts offering rates of 4.1%.
And, if you research your options and shop around, you'll find that some 1-year CDs are already offering APY rates of over 5%. Often, in order to get the top rates on CDs you'll need to forgo your brick-and-mortar bank and instead opt for an online "challenger" bank. And sometimes, but not always, you may need a higher deposit ($1,000 minimum) to access these best CD rates.
Check out our tool — in partnership with Bankrate — which lets you search for the best CD rates available now.
What is a CD?
A certificate of deposit, or CD, is a type of savings account that holds a fixed amount of money for a fixed period of time. Interest rates on CDs are typically higher than they are for regular savings accounts, and the rate that you sign up for stays the same rate for the whole term. Meaning, if rates drop for new CDs, you’ll still keep your rate. Keep in mind that if you decide to withdraw before the term is up, you’ll be stuck with pretty hefty exit fees that can offset any interest you've already earned.
CDs are good options when saving for a specific goal, but they're not great for savings that you’ll need immediate access to — so it's best to avoid putting your emergency fund in a CD. Typical term lengths for CDs range anywhere from three months to five years.
Determining what CD term you should plump for is easier if the money is going towards a particular savings goal. For example, if you plan on getting married in three years, then opening a 3-year CD makes sense.
However, you may be looking to open a CD with no particular savings goal in mind, so you’ll have to decide whether to get a short-term or long-term CD. To do so, you should consider interest rates, early withdrawal penalties and the amount of time you’re willing to commit. Typically, longer-term CDs have higher interest rates than short-term CDs, but you’ll have to wait longer to access those funds or risk incurring a fee.
Why open a CD
CDs are a great option if you’re looking for a guaranteed rate of return on your savings. They’re geared toward earning interest on money that’s already been saved, often for a future purchase, like a down payment on a vehicle or home. With a CD, you’re making an up-front payment, rather than contributing monthly, so it's not a useful tool for those looking to save gradually. Therefore, if you’re planning to make continuous deposits into a savings account, a traditional or high yield savings account would be a better option for you.
Pros of CDs
- Safe, no-risk, investments
- There's a guaranteed rate of return
- Offer higher interest rates on deposits than traditional savings accounts
- Usually have no monthly fees
Cons of CDs
- Money cannot be easily accessed, without facing early withdrawal penalties.
- You’ll pay taxes on interest accumulated in the CD.
- Fixed interest rates on CDs mean that if rates rise, you won’t be able to take advantage of these higher interest rates.
- Lower returns than if investing in stocks or mutual funds (but always remember the value of your investment can go down as well as up).
Some of the best CD rates available now
Credit Human
APY: 6.00%
Minimum Deposit: $500
Term: 12 months
Finworth
APY: 5.70%
Minimum Deposit: $50,000
Term: 16 months
Limelight Bank
APY: 5.50%
Minimum Deposit: $1,000
Term: 12 months
Forbright
APY: 5.75%
Minimum Deposit: $1,000
Term: 9 months
All In Credit Union
APY: 5.75%
Minimum Deposit: $25
Term: 12 months
Related content

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.
-
Holiday Shopping? Here’s Why Some Stores May Let You Keep Your Returns
With the holiday shopping season in full swing, you're likely to find more stores shunning returns in favor of a 'keep-it' policy, study finds.
By Jamie Feldman Published
-
Stock Market Today: Stocks Swing Higher After Powell Speech
Fed Chair Powell poured cold water on potential rate cuts, but stocks jumped anyway.
By Karee Venema Published
-
Best 3-Month CD Rates
Check out the best 3-month CD rates available today. 3-month CDs are great for investors looking for short-term investments that yield strong results.
By Erin Bendig Published
-
This 12-Month CD Offers a 6% APY — But You’ll Want to Lock in Rates Soon
CD rates are exceptionally high — but they won’t stay this way forever. Lock in this 6% rate while you can.
By Erin Bendig Published
-
High-Yield Savings Accounts Luring Spenders. Should You Move Your Cash?
High-yield savings accounts are offering rates as high as 5.33%, drawing 3 in 5 Americans to save rather than spend, new survey shows.
By Seychelle Thomas Published
-
What is FDIC, NCUA and SIPC Insurance? How Much Does it Cover?
FDIC, NCUA, and SIPC insurance provides important protection for your savings and investments but what are the limits? How much of your money is covered?
By Erin Bendig Published
-
Have You Saved Enough For Retirement?
At least half of workers surveyed by Bankrate think they haven't saved enough for retirement. One-third think they are significantly behind in their savings. Are you?
By Seychelle Thomas Published
-
CD or Money Market: Where to Stash Your Cash
Both CDs and money market accounts offer good prospects right now. What's the difference and which should you choose?
By Seychelle Thomas Published
-
How To Get the Best Savings Account Bonuses
By opening the right savings account today, you could be maximizing your earnings through both compound interest and cash bonuses.
By Erin Bendig Last updated
-
You Can Now Get 3 CD Deals For Over 5.6%
These CD accounts currently have an APY of over 5.6%, some of the highest rates on the market.
By Erin Bendig Published