Top CDs Today, Sept. 5, 2024 - Best 5-Year Rate Moves Lower

Below you'll find featured rates available from our partners, followed by details from our ranking of the best CDs available nationwide.

Rates of 5.00% to 5.35% Can Be Guaranteed Into 2025

Ahead of widely anticipated interest-rate cuts by the Fed this month—with further reductions likely in November and December—the top CD rates across our nationwide rankings have generally been edging lower. In the longer terms, which we discuss later, the leading 5-year CD rate was a casualty today.

Thankfully, all of the leading rates in terms shorter than 5 years held steady, giving you more time to lock in these top APYs. DR Bank continues to lead the CD market with its 5.35% APY on a 6-month term. But if you'd like to lock in almost that same rate—with the added bonus of being able to cash out early if you need to—you can try Climate First Bank's 6-month "no-penalty" CD, which pays 5.34%.

Want to stretch your rate guarantee further into 2025? The best 1-year CDs pay 5.25%, and you can choose from three institutions paying that APY for 12 months. In the 18-month term, the top return is 5.00%, but it's offered for 15 months. That certificate from Connexus Credit Union would lock your rate until December 2025.

If you're looking for a full 18-month option, that top rate fell under 5% this week. The leaders are currently Bask Bank and LendingClub, each paying 4.90% APY.

Long-Term CD Rates Have Fallen—But They're Still a Wise Buy

The best 2-year rate also dropped under 5.00% this week, with Lafayette Federal Credit Union now offering the top 24-month rate of 4.78%. Meanwhile, the highest APY that stretches your guarantee until 2027 is EFCU Financial's 4.65%, available for 30 months.

SecurityPlus Federal Credit Union continues to offer the leading 4-year return of 4.50% APY. But the most you can earn with a 5-year rate lock fell today—from 4.45% yesterday to 4.32% now. That offer also comes from Lafayette Federal Credit Union.

Despite paying lower annual percentage yields (APYs) than shorter CDs, attractive multi-year CDs are a smart move before the Fed starts cutting its benchmark federal funds rate. That's essentially certain to begin Sept. 18, and is likely to continue with additional 2024 and 2025 cuts. Downward pressure on interest rates could even persist into 2026.

Though Off Their Peak, CDs Still Pay Excellent Locked-In Returns

It's true that CD rates are no longer at their absolute peak. But they're still running historically high. October brought us a top nationwide rate of 6.50%—for just a few days—while today the leading rate is down to 5.35%. Still, dozens of banks and credit unions are offering 5.00% or better. In fact, a total of 18 offers among the best nationwide CDs pay 5.25% and up.

Compare that to early 2022, before the Federal Reserve embarked on its fast-and-furious rate-hike campaign. The most you could earn from the very best CDs in each term ranged from just 0.50% to 1.70% APY.

Jumbo CD Rates Now Lead in Four Terms

Jumbo CDs require much larger deposits, but they don't always offer higher rates. Right now, the best jumbo CDs lead in four of the eight terms we track.

Among 18-month certificates, Connexus Credit Union's 15-month jumbo CD pays 5.10% vs. 5.00% for today's leading rate among standard 18-month certificates. And the recent decline in the 2-year term means you can also earn more with a jumbo certificate there: 4.84% from Lafayette Federal Credit Union vs. 4.78% among standard CDs.

Meanwhile, EFCU Financial's 3-year jumbo rate of 4.75% is the winner in that term. And today's drop in the leading 5-year rate means you can now earn more with the State Department Federal Credit Union's 5-year jumbo, which pays 4.37% vs. the top standard rate of 4.32%.

How Far—and Fast—Will CD Rates Fall in 2024?

As expected, the Federal Reserve kept the federal funds rate at its current level at its meeting that ended July 31. But speaking on Aug. 23 at the Fed's annual meeting in Jackson Hole, Fed Chair Jerome Powell signaled that the central bank is finally ready to pivot to rate cuts. He refrained, however, from indicating how large the rate reductions would be—or how fast they will come.

"The time has come for policy to adjust," Powell said. "The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

According to the CME FedWatch tool, investors are currently split on whether the Fed will lower rates by 0.25 or 0.50 percentage points on Sept. 18, with almost 60% betting on the smaller cut. But by the Dec. 18 meeting, a very strong majority of traders predict the Fed will have lowered the federal funds rate by at least a full percentage point.

The central bank's mission to beat inflation led it to raise the federal funds rate 11 times between March 2022 and July 2023—bringing the benchmark interest rate to its highest level in 22 years. The rate-hike campaign has been a boon to savers with cash in the bank, as the fed funds rate directly influences the rates banks and credit unions pay on CDs. As a result, CD rates hit a 20-year high last fall. Those with money in a high-yield savings or money market account have also benefited from these historically high rates.

Fed officials are generally careful not to jump the gun and will likely continue waiting for additional reports before making any decisions about changing the fed funds rate. But with a September rate cut almost certain—and CD rates moving down without waiting for the central bank's official announcement—you may want to lock in an excellent CD rate while you can.

How We Find the Best CD Rates

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), the CD's minimum initial deposit must not exceed $25,000, and any specified maximum deposit cannot be under $5,000.

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.