Top CD rates today: 4.20% APY

The best CD rates offer an annual percentage yield reaching up to 4.20%. Opening an account now allows you to secure these elevated rates for an extended period, contingent upon the term aligning with your financial objectives. Given that experts anticipate the Fed might lower rates further at their December meeting, it's advisable to invest without delay.

Today's top CD yields: Secure as much as 4.20%

Bread Savings provides the top CD rate at 4.20% for its six-month term. A six-month CD from Newtek Bank is available with a 4.20% APY, though it has a greater minimum deposit requirement. Coins2Day tracks the leading rates from major U.S. Banks to assist readers in maximizing their CD returns. Below are the best available rates:

Pro tip

Looking for the best CD to fit your investment needs? See rates from top institutions:
–Wells Fargo
–Capital One
–Chase
–Bank of America
–Discover Bank
–Northern Bank Direct
–Ally Bank
–Newtek Bank
–Popular Direct
–Citibank
–Sallie Mae Bank

Examine interest rates for Certificates of Deposit at leading national financial institutions

The reason you likely don't recognize most of the names listed is simple: Certificates of Deposit, on their own, don't usually generate significant revenue for large banks. 

Major financial institutions such as Chase, PNC, and U.S. Bank focus on drawing in clients with higher-yield offerings like loans and credit cards, as opposed to Certificates of Deposit (CDs). As a result, the annual percentage yields (APYs) on CDs from these banks are frequently significantly less competitive than those found at smaller community banks or digital-only banks, and securing a favorable rate might necessitate opening additional savings accounts or meeting substantial minimum deposit requirements.

CD rates news 2025

It's important for investors to recognize that average CD rates generally mirror the Federal Reserve's monetary policy choices, particularly adjustments to the fed funds rate. For those investing in CDs, staying informed about the central bank's policy shifts is crucial for anticipating rate modifications.

The federal funds rate currently stands at 3.75%-4.00%.

The Federal Reserve lowered interest rates on three occasions last year, resulting in fed funds being set at 4.25%-4.50% by December 2024. With inflation from the post-pandemic era subsiding, the FOMC made these cuts to support economic momentum. Consequently, CD annual percentage yields (APYs) declined from their highest levels in twenty years following the Fed's rate reductions.

As the Fed implements its initial 2025 rate reduction during the September 16-17 session and a subsequent one on October 28-29, certificate of deposit rates are once more exhibiting a downward trend. Further declines are anticipated if the Federal Reserve proceeds with a third reduction at its December gathering. The subsequent FOMC meeting is scheduled for December 9-10.

The central bank's rate hike efforts in 2022 and 2023 led to those 20-year peaks in CD yields. The pandemic's economic disruptions caused inflation to climb to its highest level since the early 1980s. The FOMC increased interest rates eleven times between March 2022 and July 2023, moving them from zero to 5.25%-5.50% in an attempt to curb inflation.

CD rates currently remain close to their peak levels. You can still lock in favorable rates for both short and long-term certificates of deposit. Depositing a significant sum into your CD allows for considerable interest earnings.

Historical CD rates

During the early 1980s, Certificates of Deposit (CDs) offered double-digit returns due to escalating inflation and elevated interest rates. However, by 2019, the annual percentage yield (APY) for a five-year CD was just a little over 3.00%. 

Prior to the early 2020s, the highest rates typically stayed under 1.00% APY. More recently, rates have been on the rise, with the most attractive options for 1-year CDs surpassing 5.00% APY.

How to get a good CD rate

Figuring out an attractive CD rate is a personal matter. It's influenced by your investment amount, the duration you're willing to commit your funds to a certificate, and the current market rates at the time you plan to establish an account.

For instance, a 5.00% APY CD over five years might not be the right choice if you need liquidity sooner or if rates rise, leaving you with a lower return. Generally, rates above the national average are advantageous. Compare rates across banks for your desired term to find the best option.

When comparing CDs, key elements to assess are minimum balance requirements, available durations, interest rates offered (often better with online banks), penalties for early withdrawal, and any associated charges. Choosing a bank over a broker could potentially save you from extra fees.

Consider these factors:

• Term length: Ensure they match your savings goals.
• APY: Higher rates are available for longer CD terms.
• Minimum deposit: Ensure you can meet minimum deposit requirements.
• Penalties: Understand early withdrawal costs, in case you need to withdraw money before a CD matures.
• Deposit insurance: It's crucial to confirm that your chosen bank or credit union is covered by The Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA).

Explore what online banks have to offer

Online banks and fintech companies generally provide superior rates compared to traditional national banks. Major financial institutions primarily derive their income from the interest collected on loans, various fees, and investments in securities. 

Smaller financial institutions and digital financial service providers, on the other hand, are actively drawing in new clients by providing appealing annual percentage yields on savings and checking accounts. Furthermore, digital banks generally incur reduced operational expenses, which enables them to extend more favorable interest rates to their customers.

Set up a CD ladder

CD ladders are ideal for savers who are reluctant to commit their funds for extended periods. By distributing savings among CDs with different maturity dates, individuals can achieve a balance between immediate access to some funds and more favorable rates for longer-term investments. 

For example, if you begin by investing $3,000 in three staggered CDs (1-year, 2-year, and 3-year), then as each matures you reinvest the money in a 3-year CD. With this plan, you get access to your money (plus the interest you’ve earned) every year. 

CD types explained

Various CD types cater to different needs, such as:

• Brokered CDs are bought and sold via brokerage accounts rather than banks or credit unions. They are typically issued by banks and sold to brokerages, which offer them to customers at higher APYs compared to conventional CDs.
• Callable CDs include a call feature allowing the issuing financial institution to end the CD before its maturity. Upon such a call, investors retain their principal along with any accrued interest up to that point.
• Bump-up CDs allow you to request a higher APY if interest rates increase after you've opened your account. Generally, you can adjust the rate on your CD once or twice during its term.
• No-penalty CDs do not impose penalties for withdrawing funds before maturity. They are less prevalent than other CD varieties and may also feature lower APYs compared to traditional CDs.
• Jumbo CDs usually require a minimum initial deposit of at least $100,000 but generally provide higher APYs than standard CDs.
• Variable-rate CDs offer changing APYs that are indexed to prevailing interest rates. They carry higher risk compared to traditional CDs because a decrease in interest rates before maturity can lead to a lower yield.

Series on daily CD rates created by former Coins2Day editor Cassie Bottorff. This edition has been updated by Editor, Evergreen Content Glen Luke Flanagan.