| CD Term | CD Rate | Initial Deposit | Interest Earned at Term End | Total Value of CD After Term |
| 3 months | 5.12% APY | $5,000 | $62.81 | $5,062.81 |
| 6 months | 5.50% APY | $5,000 | $135.66 | $5,135.66 |
| 1 year | 5.35% APY | $5,000 | $267.50 | $5,267.50 |
| 18 months | 5.25% APY | $5,000 | $398.87 | $5,398.87 |
| 2 years | 5.25% (22 months) | $5,000 | $491.75 | $5,491.75 |
| 3 years | 5.13% APY | $5,000 | $809.65 | $5,809.65 |
| 4 years | 5.00% APY | $5,000 | $1,077.53 | $6,077.53 |
| 5 years | 4.70% APY | $5,000 | $1,290.76 | $6,290.76 |
The top rate on a CD of any term today that does not require a minimum of more than $5,000 is 5.50%, which applies to a 6-month CD from Bellco Credit Union. At that rate, you could earn $135.66 in interest after 6 months. But if you can afford to leave your money in a little longer, you could really maximize the returns.
Note
The top rate across all CD terms right now is 5.65% APY, which is for a 9-month CD that requires a $10,000 minimum deposit.
A 1-year CD with a rate of 5.35% may be a good option. If you invested $5,000 in the top paying 1-year CD today, you’d earn $267.50 in interest at the end of the term. And a 22-month CD—part of our 2-year term category—could net you close to $500 in interest by the end of the term. But remember, there are early withdrawal penalties on CDs, so if you need to access your money sooner, you could have to pay a few months’ interest just to get your money back. We've got some other options for you to consider later on in this article.
CDs may be a better alternative to savings accounts if you want to lock in a higher interest rate on your money and do not need that cash in the immediate future. Right now, the highest savings account rate is 5.12% APY. Most of the best CD rates—on 6-month, 1-year, 18-month, 2-year, and 3-year terms—pay more than the highest savings account rate today.
CD Rates Today
The national average annual percentage yields (APY) on CDs are much lower than the top rates offered by nationwide banks and credit unions today. The APY on a CD can really impact the amount of money you earn on your initial deposit.
For example, the current national average for a 1-year CD is 1.59%. If you put $5,000 in a 1-year CD at that rate, you’d earn $79.50 at the end of the term. Instead, by choosing to invest $5,000 in a CD with a top rate of 5.35% for one year, you’d earn $267.50. That's $188 more.
Alternatives
High-Yield Savings Account
If you want to earn a higher interest on your savings but don’t want to lock your money away for a certain amount of time, a high-yield savings account might be a better alternative. The top rate on a high-yield savings account is currently 5.12% APY. With high-yield savings accounts, you can withdraw money at any time (though some accounts may have limits on how many times you can withdraw per month), and deposit more money when you want to boost your savings.
Money Market Account
Right now, the best money market rate is even higher than the top savings rate. It's 5.25% for a minimum deposit of $1,000. Unlike savings accounts, money market accounts allow you to write checks. If that's important to you, this might be your best bet for a more liquid alternative to a CD.
Although interest rates on CDs, money market, and savings accounts are high right now, there is no guarantee that they will keep rising in the future. While the Federal Reserve has raised its federal funds rate—the benchmark interest rate set by the Federal Reserve that influences CD and savings rates—10 times since March 2022 to cool inflation, it has indicated that there may not be any more increases this year.
The Fed is widely expected to pause interest rate hikes at its meeting this week. This afternoon, data on fed funds futures trading showed traders betting 78% in favor of a rate hike pause. It’s very likely that savings account rates will peak and begin to drop off in the coming weeks and months.
If you want to earn more interest on your savings, you might want to consider investing extra money in a CD now, so you can lock in a higher interest rate in the coming months or even years, regardless of the Fed’s decision.
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.
