Lock in a High APY Before the Fed Cuts Rates Again. Today’s CD Rates, Dec. 10, 2024
- Today’s best CDs offer up to 4.70% APY.
- APY has been declining for several months, a trend that could continue if the Fed cuts interest rates next week as expected.
- Opening a CD today allows you to lock in a high APR and protect your income from additional interest rate drops.
one Certificate of deposit This can be a great way to get a guaranteed return on your money, which you won’t need to touch for a while. When you open a CD, your annual percentage yield (APY) is fixed, so you’ll continue to earn the same amount of interest even if overall interest rates decrease. And interest rates are falling.
Annualized yields on CDs have been declining since the Federal Reserve cut interest rates in September. Many experts believe that the Federal Reserve will cut interest rates again at next week’s meeting, which means that the APY may continue to decline. Therefore, the sooner you open the CD, the higher interest rate you lock in.
Here are the top CD rates right now, and how much you can earn by depositing $5,000, according to the banks we track at CNET.
Today’s Best CD Rates
| semester | Maximum annualized interest rate* | bank | Estimated revenue |
|---|---|---|---|
| 6 months | 4.70% | rise bank | $117.50 |
| 1 year | 4.45% | America First Credit Union; Community Federal Credit Union | $222.50 |
| 3 years | 4.15% | America’s First Credit Union | $648.69 |
| 5 years | 4.25% | America’s First Credit Union | $1,156.73 |
Experts recommend comparing interest rates before opening a CD account to get the best possible annual return. Enter your information below to get the best prices in your area from CNET partners.
Where will interest rates go next?
The Fed does not directly set deposit rates, but it does control the federal funds rate. The federal funds rate is the overnight lending rate that banks charge each other to borrow funds. When the federal funds rate falls, interest rates on consumer products such as CDs fall. savings account tend to follow.
After the Federal Reserve raised interest rates in the wake of the pandemic, CD rates for maturities between 6 and 18 months that we track at CNET surged above 5%. But deposit rates and savings rates have been falling slowly this year.
Fed September interest rate cutThis is the first rate cut since March 2020. Since then, deposit and savings rates have fallen faster. At the start of 2024, the average annualized yield on six-month CDs was 4.92%, but after the rate cut in September, it fell to 4.38%. Last week it was 4.15%.
Here’s how CD rates looked at the beginning of this week compared to the beginning of last week:
What happened to CD rates last week?
| semester | CNET average APY last week | CNET average APY this week** | Weekly changes*** |
|---|---|---|---|
| 6 months | 4.15% | 4.14% | -0.24% |
| 1 year | 4.07% | 4.07% | no change |
| 3 years | 3.53% | 3.52% | -0.28% |
| 5 years | 3.46% | 3.46% | no change |
If the Fed cuts interest rates on December 18, CD rates could fall further. For now, experts say the Fed is likely to cut interest rates again this month unless we see a sharp rise in inflation in Wednesday’s consumer price index report.
Why now is still a good time to crack open a CD
If you’re trying to grow your savings, there’s still time to earn an attractive annual interest rate. If you’ve saved money that you won’t need for a few years, you can lock in high, guaranteed returns with CDs now.
If you need access to your funds, you can also get competitive interest rates by: High Yield Savings Account. HYSA is better suited for your application emergency fund.
Things to consider when choosing a CD
Competitive APY is important when comparing CD accounts, but it’s not the only factor you should focus on. To find the account that’s right for you, also consider the following:
- When you need money: Early withdrawal penalties It will eat into your interest income. So be sure to choose a term that fits your savings schedule. Alternatively, you can choose a No penalty CDalthough 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 banking There are no 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 bank or credit union You are considering becoming an FDIC or NCUA member so your money is protected if the bank fails.
- Customer ratings and reviews: Check out sites like Trustpilot to find out what customers are saying about your bank. You want a bank that is responsive, professional and easy to work with.
methodology
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 and Connexus Credit Union.
*APY as of December 9, 2024, based on banks we track at CNET. Earnings are based on APY and assume interest compounded annually. Weekly percentage increase/decrease from December 2, 2024 to December 9, 2024.
