Today’s Best CD Rates – APY Remains High Ahead of Inflation Data Release on July 8, 2024

High deposit rates won’t last forever. The best CDs consistently offer annual yields in excess of 5%, but with interest rate cuts expected in the coming months, now is the time to open a CD and lock in a higher APR.

“I advise consumers to open a CD in today’s environment knowing that interest rates in the future will likely be lower than today’s rates,” said Dana May, CFP, founder and chief financial planner at Twin Cities Wealth Strategies Dana Menard said.

Read on to learn where to find today’s best CD rates.

Experts recommend comparing interest rates before opening a CD account to get the best possible annual return. Enter your message below to get the best prices in your area from CNET partners.

Today’s Best CD Rates

Here are some of the best CD rates available right now and how much you can get by depositing $5,000 right now:

How inflation affects CD interest rates

CD rates are largely affected by the federal funds rate set by the Federal Reserve, which determines the cost for banks to lend to each other. When the Federal Reserve raises interest rates, banks often raise annual interest rates on consumer products such as savings accounts and certificates of deposit to increase cash reserves and stay competitive. When the Fed cuts interest rates, the annualized returns on these products also fall.

Starting in March 2022, the Federal Reserve raised the federal funds rate 11 times in response to record high inflation, while CD rates soared, entering the fall of 2023, with some accounts offering APYs in excess of 5.5%. The Fed paused interest rates at its September 2023 meeting and at every meeting since. As a result, CD rates stabilized and then began to decline as experts predicted rate cuts in the second half of 2024.

How long will CD rates stay high?

CD rates have remained relatively stable as banks await and respond to the Federal Reserve’s decision to pause interest rate increases for the seventh consecutive time in June.

Compared to last week, CD rates are as follows:

Experts expect at least one rate cut later this year, which means today’s CD rates could be the best rates for the rest of 2024. The next Consumer Price Index report measuring changes in inflation will be released on July 11.

Faron Daugs, CFP, founder and CEO of Harrison Wallace Financial Group, said: “The Fed is starting to get the economic data they think they need to justify cutting interest rates this year. “I believe that will be after the election. However, if new data continues to show that inflation is slowing, we may see a rate cut at the September meeting. Doing so in September may appear too political, but This may depend on upcoming data on the timing of rate cuts.

Why you shouldn’t wait to open a CD

Whenever the Federal Reserve starts cutting interest rates, one thing is certain: Opening a CD today allows you to lock in a high APR and protect your earnings if rates fall.

A fixed interest rate isn’t the only perk you can enjoy by opening a CD today.

If the certificate of deposit is issued by a bank insured by the Federal Deposit Insurance Corporation or a credit union insured by the National Credit Union Administration, deposit insurance may cover up to $250,000 per bank. This means that if the bank fails, your funds are safe within your deposit limits.

Additionally, CDs carry lower risks. Unlike investments like stocks, you won’t lose your principal or interest earned unless you encounter an early withdrawal penalty, which you can easily avoid by choosing a term that suits your needs.

How to choose the CD that’s right for you

Competitive APY is important, but there are other things you should consider when comparing CD accounts:

• When you need money: Early withdrawal penalties reduce your interest income. So be sure to choose a term that fits your savings schedule. “I recommend locking for whatever term you’re willing to lock in, as long as you don’t need the money to be liquid during the term,” says Dana Menard, CFP, founder and chief financial planner at Twin Cities Wealth Strategies. Or, you It is also possible to choose a no-penalty CD, although the APY may not be as high as a traditional CD of the same term.
• Minimum deposit requirements: Some CDs require a minimum amount to open an account, usually $500 to $1,000. Others don’t. How much money you need to set aside can help you narrow down your options.
• cost: Maintenance fees and other expenses eat into your income. Many online banks don’t charge fees because their administrative costs are lower than banks with physical branches. However, please read the fine print of any account you are evaluating.
• Federal Deposit Insurance: Make sure any institution you consider is a member of the FDIC or NCUA so that your money is protected in the event of a bank failure.
• Customer ratings and reviews: Check out sites like Trustpilot to see what customers are saying about any bank you’re considering. You want a bank that is responsive, professional and easy to work with.

method

CNET reviews CD rates based on the latest APY information from the issuer’s website. We evaluated CD rates from more than 50 banks, credit unions and finance companies. We evaluate CDs based on APY, product offerings, accessibility, and customer service.

Current banks included in CNET’s weekly CD averages include: Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MYSB Direct , Quontic, Rising Bank, Synchrony, EverBank, Popular Bank, First Internet Bank of Indiana, First American Federal Credit Union, CommunityWide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America, Connexus Credit society.