With it appearing increasingly likely that a Federal Reserve interest rate plateau is nearing, CD shoppers are starting to feel the effects. Three CD terms saw their top nationwide rate tumble today, and instead of two institutions offering the market-leading rate of 5.35% APY, we’re down to just one.
Adding insult to injury, CBC Federal Credit Union, which just three days ago launched term-leading rates of 4.95% APY for 4 years and 5.00% APY for 5 years, has already abandoned those market leaders. The top rates in those two terms are now reduced to 4.73% APY and 4.68% APY, respectively, both on offer from Lafayette Federal Credit Union.
- The industry-leading rate across terms is still 5.35% APY, but that rate is now only available from one credit union instead of two.
- The top rate on 4-year and 5-year CDs dipped under 5% today, meaning 35 months is the longest term currently offering a rate of at least 5.00% APY.
- The number of nationwide CDs paying 5.25% APY or more has dropped to just six, after starting the week at 12.
- Top returns for jumbo CDs showed no movement today.
|CD Term||Yesterday’s Top National Rate||Today’s Top National Rate||Day’s Change (percentage points)|
|3 months||5.00% APY||5.00% APY||No change|
|6 months||5.25% APY||5.25% APY||No change|
|1 year||5.25% APY||5.25% APY||No change|
|18 months||5.25% APY||5.25% APY||No change|
|2 years||5.35% APY||5.35% APY||No change|
|3 years||5.35% APY||5.00% APY||– 0.35|
|4 years||4.95% APY||4.73% APY||– 0.22|
|5 years||5.00% APY||4.68% APY||– 0.32|
|10 years||4.30% APY||4.30% APY||No change|
Credit Human had been offering 5.35% APY on certificates of 24 to 35 months. It was the top nationally available rate you could earn in any CD term, an honor it shared with Langley Federal Credit Union, which is still paying that annual percentage yield (APY) on 22-month certificates. But Credit Human dropped its rate today to 5.00% APY.
Several of the top CD rates still beat the 5% March inflation rate released this week. This is a relatively rare occurrence, at least in recent years. No one knows what the April inflation figure will be, but this may be a good time to lock in an inflation-busting CD rate.
|CD Term||Today’s Top National Bank Rate||Today’s Top National Credit Union Rate||Today’s Top National Jumbo Rate|
|3 months||5.00% APY||4.50% APY||3.91% APY|
|6 months||5.25% APY||5.01% APY||5.25% APY|
|1 year||5.25% APY||5.15% APY||5.15% APY|
|18 months||5.20% APY||5.25% APY||5.25% APY|
|2 years||5.28% APY||5.35% APY||5.04% APY|
|3 years||4.60% APY||5.00% APY||4.99% APY|
|4 years||4.55% APY||4.73% APY||4.89% APY|
|5 years||4.50% APY||4.68% APY||4.84% APY|
|10 years||4.10% APY||4.30% APY||None|
Jumbo certificate rates are holding steady, with a high rate of 5.25% APY in two terms. It’s often smart not to limit your search to jumbo CDs when you have a large deposit because you can typically find better rates among standard certificates. But right now the best jumbo 4-year and 5-year options are actually paying more than the best standard CDs in those terms.
Below you can see how the top CD rates have trended over the last several weeks. The points on the graph indicate a Monday-to-Monday look at the highest nationally available CD rate in each term.
Will CD Rates Rise or Fall?
CD rates skyrocketed as a result of the Federal Reserve aggressively hiking the federal funds rate to combat inflation. Although the Fed has raised the fed funds rate twice this year, both times by 0.25%, that’s far lower than the cumulative 4.25% in increases it implemented last year. As a result, rates on deposit accounts surged in 2022, and then have creeped slightly higher this year.
Economic data released this week on inflation, retail sales, and manufacturing all show increasing evidence of a slowing economy, suggesting the Fed’s rate campaign is beginning to take meaningful hold. This in turn fuels market predictions that the Federal Reserve will wrap up its rate hikes soon. In fact, the leading forecast at the moment is for “one and done,” meaning just one more hike when the Fed meets in a few weeks, followed by a rate plateau and ultimately a decline.
The Fed’s rate-setting committee will conclude its next meeting on May 3. Though it looks likely it will make another increase that day, current movement in the top CD rates suggests that some institutions aren’t waiting to start dialing back their aggressive rates. That means now is likely a good time to lock in a rate you’ll be happy to have for months or years to come.
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often five, 10, or even 15 times higher.
Rate Collection Methodology Disclosure
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD’s minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.