The Federal Reserve has finally reduced its target interest rate, which will have an impact on deposit account rates. This means that now is the time to take advantage of today’s high rates by locking them in with a certificate of deposit (CD). Here’s a look at the current CD rates and where you can find the best offers.
As of December 9, 2024, CD rates are still competitive, especially for shorter terms. Some financial institutions are offering rates around 4.00% APY for terms of a year or less. Longer-term CD rates are slightly lower, but the top offers are still around 3.00%-4.00% APY for terms of three years or more.
Currently, the highest CD rate is offered by Synchrony Bank on its 9-month CD, with an APY of 4.30% and no minimum opening deposit required. Other top CD rates can be found at various online banks and credit unions.
If you’re considering a CD, these rates are some of the highest available, especially when compared to the national average rates, which are significantly lower. It’s worth noting that online banks and credit unions generally offer more competitive rates compared to traditional brick-and-mortar banks.
The average CD rate by term as of November 2024 (the most recent data available from the FDIC) is 1.85% for a 1-year term. However, today’s average CD rates are some of the highest seen in nearly two decades, largely due to the Federal Reserve’s efforts to combat inflation by keeping interest rates elevated.
When looking for the best CD rates and accounts, it’s important to shop around and compare options from different financial institutions. Online banks tend to offer the most competitive rates, so it’s worth considering them. Also, be sure to check the minimum deposit requirements and review the account’s terms and conditions, including any penalties for early withdrawal and auto-renewal policies.
In summary, the Federal Reserve’s reduction of the target interest rate has led to a decrease in deposit account rates, making now the time to lock in today’s high rates with a CD. By shopping around and considering online banks, you can find the best CD rates and accounts that align with your financial goals.