Lock down the high API while you still can. Today’s CD Prices, December 13, 2024

The days of high interest rates on certificates of deposit may be over, but you can still earn great returns with today’s premium CDs — if you act now.

Annualized percentage yields, or APIs, on CDs have been falling since the Federal Reserve cut interest rates at its last two meetings. But you can still earn up to 4.70% API by choosing the right CD. That’s more than double the national average for some terms. And because your API is set up when you open the CD, your returns will stay the same even if overall CD rates continue to fall — which is likely if the Fed cuts rates again next week, as many experts believe they will.

Here are some of the highest CD rates right now, based on the banks we track at CNET, and how much you could earn by depositing $5,000.

Today’s best CD prices

Term	Highest API*	Bank	Estimated earnings
6 months	4.70%	Rising Bank	$117.50
1 year	4.47%	NekBank	$223.50
3 years	4.15%	America First Credit Union	$648.69
5 years	4.25%	America First Credit Union	$1,156.73

Why are CD prices falling?

The Fed does not set CD rates directly, 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 decreases, rates on consumer products such as CDs and savings accounts tend to follow.

Following the Fed’s post-pandemic rate hike, CD rates have risen above 5% API for the six- to 18-month periods we track at CNET. But since the beginning of this year, CD and savings rates have been slowly declining.

Fed cut rates in Septemberits first rate cut since March 2020. Since then, CD and savings rates have been falling faster. In early 2024, the average API on a 6-month CD was 4.92%, but after the September rate cut, it fell to 4.38%. This week it is 4.14%.

Here’s where CD prices were at the start of this week compared to the start of last week:

How CD prices have changed in the last week

Term	Last week’s CNET average API	This week’s CNET average API**	Weekly Change***
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

CD rates could fall further if the Fed cuts rates again on December 18. Right now, experts say the Fed is likely to cut rates again this month despite the latest Consumer Price Index Report shows that inflation is still rising.

Why you should open the CD now

If you are working to increase your savings, you still have time to earn an attractive API. If you already have money saved that you won’t need to dip into for a few years, you can get a high, guaranteed return now with a CD.

“CDs are a good, stable way to get predictable returns while controlling how much time you don’t have access to your money,” said Bobbi Rebel, Certified Financial Planner® and personal finance expert with BadCredit.org. “Rates are still high on a historical basis.”

If you need easy access to your money, you can also earn a competitive rate with a high yield savings account. HISAs are more appropriate for things like yours contingency fund because you can withdraw cash at any time without penalty.

Things to consider when choosing a CD

Competing API is important when comparing CD accounts, but it’s not the only thing you should look at. To find the right account for you, consider these things as well:

• When you will need the money: Penalties for early withdrawal it can eat into your interest earnings. So make sure you choose a term that fits your savings timeline. Alternatively, you can choose a CD without penaltyalthough the API may not be as high as you would get with a traditional CD of the same term.
• Minimum deposit requirement: Some CDs require a minimum amount to open an account – usually $500 to $1,000. Others don’t. How much money you have to spare can help you narrow down your options.
• Fees: Maintenance fees and other fees can affect your earnings. Many online banks they do not charge fees because they have lower overhead costs than banks with physical branches. However, read the fine print for any account you are evaluating.
• Federal Deposit Insurance: Make sure that any bank or credit union you believe you are a member of the FDIC or NCUA so your money is protected if the bank fails.
• Customer ratings and reviews: Visit sites like Trustpilot to see what customers are saying about the bank. You want a bank that is flexible, professional and easy to work with.

Methodology

CNET reviews CD prices based on the latest API information from publisher websites. We’ve evaluated the CD rates of more than 50 banks, credit unions and finance companies. We evaluate CDs based on API, product offering, affordability and customer service.

Current banks included in CNET’s weekly CD averages include Alliant Credit Union, Alli Bank, American Express National Bank, Barclais, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MISB Direct, Quantic , Bank on the Rise, Synchroni, EverBank, Popular Bank, First Internet Bank of Indiana, America First Federal Credit Union, CommunityVide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America and Connekus Credit Union.

*API as of December 12, 2024 based on the banks we track at CNET. Earnings are based on APIs and interest is assumed to compound annually.

**Weekly percentage increase/decrease from December 2, 2024 to December 9, 2024.

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