CD rates are exceptionally high — but they won’t stay this way forever. Rates on savings vehicles like CDs and high-yield savings accounts have skyrocketed since 2022, with many of the top accounts offering rates of return of over 4% to 5%. If you wait too long to lock in rates, however, you could miss out on these high rates of savings.
The Federal Reserve has been raising interest rates over the last 18 months in an effort to fight high inflation, lifting the federal funds rate a total of 11 times. The fed funds rate, a key overnight bank lending rate that impacts all kinds of other rates, is currently set at a target range of 5.25% to 5.5%, which is the highest its been in 22 years. The bright side, however, is that when interest rates rise, savings rates typically do as well.
At its last meeting, the Federal Reserve decided to hold off on another rate hike and keep the federal funds rate steady. However, the possibility of another rate hike later this year is on the table. If that happens, rates on savings accounts could inch a little bit higher. On the other hand, as inflation starts to cool, the Federal Reserve may decide to hold rates steady once again and rates on savings accounts could drop. For this reason, it's a good idea to lock into a CD account while rates are still outstandingly high.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
12-month CD, Credit Human — 6% APY
Currently, Credit Human is offering one of the highest rates available on the market. The 12-month CD from Credit Human offers a 6% APY, a rate you aren't likely to find elsewhere. Plus, you won’t have to meet any steep deposit requirements, you’ll just need to maintain a balance of $500 to earn the APY. Deposits at Credit Human are federally insured up to $250,000 by the National Credit Union Administration (NCUA), letting you keep your savings safe.
Normally, longer-term CDs offer higher rates of return than shorter-term CDs. However, the market is experiencing what is called an "inverted yield curve," meaning you’ll earn more from a 1-year CD compared to a 5-year CD. Plus, if you're hesitant about locking away your cash for too long, a 12-month CD can provide a good middle ground between shorter-term and longer-term CDs.
Use our tool below, in partnership with Bankrate, to compare the best CD, widely available rates for you today. It's updated daily.
Related Content
-
Harris Proposes Medicare Cover In-Home HealthcareVice President Kamala Harris proposed a plan for Medicare to cover in-home healthcare.
-
Meta and Microsoft Highlight Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
Why You Need to Open a CD Right NowLooking to open a CD in 2024? Now's a great time to lock-in CD rates and earn interest on your cash.
-
Best 3-Month CD RatesCheck 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.
-
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.
-
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?
-
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?
-
CD or Money Market: Where to Stash Your CashBoth CDs and money market accounts offer good prospects right now. What's the difference and which should you choose?
-
How To Get the Best Savings Account BonusesBy opening the right savings account today, you could be maximizing your earnings through both compound interest and cash bonuses.
-
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.
