21 December 2024

Maximize Your Savings: Earn Up to 5.39% with Today's Top CD Rates

Explore the latest CD rates and learn how to earn up to 5.39% on your savings with today's top certificates of deposit.

Key Takeaways

The highest Certificate of Deposit (CD) rate available today is 5.39% for a 3-month term.
Online banks often offer CD rates that are twice the national average.
Consider using a CD ladder strategy to take advantage of high rates without tying up your funds for long periods.

As of September 30, 2024, the best interest rates on CDs, also known as certificates of deposit, can reach up to 5.39%, depending on the term length. This article provides an overview of current CD rates and offers guidance on how to choose the right CD for your financial goals.

Understanding CDs

A CD functions similarly to a savings account, but with a key difference: the interest rate is fixed rather than variable. To earn interest on a CD, you must keep your funds untouched for the duration of the term, which can range from a few weeks to several years.

Withdrawing money from a CD before it matures can result in steep penalties, such as losing six months' worth of interest on a one-year CD. If you're aiming to maximize your interest earnings, consider opting for long-term CDs, which typically offer higher Annual Percentage Yields (APYs). However, this requires a commitment to not accessing your funds for an extended period.

Short-Term vs. Long-Term CDs

For those with short-term savings goals, a 3-month CD may be ideal. Currently, the average rate for a 3-month CD is 1.32%, but the highest available rate is 5.39%. Just last week, the average stood at 1.34%.

If you're considering a 6-month CD, the top rate today is 5.25%, consistent with last week's best rate. The average APY for this term is currently 1.85%, a slight decrease from 1.88% the previous week.

For a 1-year CD, the highest rate is 5.37%, which remains unchanged from last week. The average APY for this term is now 1.91%, down from 1.96%.

If you can afford to lock your money away for two years, you can find rates as high as 4.76% for 24-month CDs, although the average APY has dropped to 1.66% from 1.69% last week.

Long-Term Investment Considerations

Longer-term CDs often come with more attractive rates, but they also carry harsher penalties for early withdrawal. For instance, breaking a 5-year CD too soon may result in losing a full year's worth of interest. Always review the penalty structure of your chosen CD issuer before committing.

Currently, the highest rate for a 3-year CD is 4.65%, while the best rate for a 5-year CD is 4.41%, with average APYs of 1.59% and 1.61%, respectively.

Jumbo CDs

For those looking to invest larger sums, the best jumbo CD rate today is 5.26% for a 6-month term, with an average APY of 1.91%. Jumbo CDs typically require a minimum deposit of $100,000, though some institutions may accept lower amounts.

Safety and Security

CDs generally offer higher interest rates than traditional savings accounts, making them a safer investment option compared to riskier assets like stocks or cryptocurrencies. With federal insurance from the FDIC covering up to $250,000, your investment is protected in the event of a bank failure.

Conclusion

CD rates are influenced by a bank's operational costs, giving online banks a competitive edge. For example, Chase Bank offers rates from 0.01% to 4.75%, while Capital One and Synchrony Bank provide rates between 3.50% to 4.30% and 0.25% to 4.80%, respectively.

To find the best CD rates, compare options across various banks and consider your financial needs and comfort level with different institutions.