Certificate of deposits (CDs) are a great way to maximize earning potential, especially with today’s best CDs offering up to 5.30% annual percentage yield (APY). As inflation cools and a Federal Reserve rate cut seems likely in September, locking in a high APY now can protect your earnings from future rate cuts. By comparing rates and opening a CD account, you can secure a competitive APY and potentially earn more interest.
Some of the highest rates available on today’s best CDs include a 5.30% APY for a 6-month term at CommunityWide Federal Credit Union, earning $130.79 by depositing $5,000. For a 1-year term, options include CommunityWide Federal Credit Union, First Internet Bank of Indiana, and Limelight Bank with a 5.15% APY, earning $257.50. Longer terms like a 3-year CD from NexBank at 4.55% APY or a 5-year CD from First Internet Bank of Indiana at 4.35% APY offer higher earnings of $714.02 and $1,186.32, respectively, based on a $5,000 deposit.
When choosing a CD, factors to consider include the term length to fit your savings timeline, minimum deposit requirements, fees that could impact earnings, federal deposit insurance, and customer ratings and reviews of the bank. Early withdrawal penalties should be taken into account, and no-penalty CDs may be an option but typically have lower APYs. Checking the bank’s membership in FDIC or NCUA can ensure your money is protected, and researching customer feedback can help find a responsive and reliable bank.
The Federal Reserve adjusts the federal funds rate to stabilize the economy, influencing how much it costs banks to borrow and lend money. As the Fed prepares for a potential rate cut in September, the sooner you lock in a high APY on a CD, the greater your earning potential could be. Recent reports showing cooling inflation make a rate cut more likely, leading to decreasing rates across CD terms. By opening a CD now, you can take advantage of current high APYs before they drop further.
CNET reviews CD rates based on the latest APY information from issuer websites, evaluating offerings from over 50 banks, credit unions, and financial companies. Factors such as APYs, product offerings, accessibility, and customer service are considered. Some of the current banks included in CNET’s weekly CD averages are Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, and many others. By staying informed on the best CD rates available, you can make informed decisions to maximize your savings and earnings.
