September 1, 2022 – Forbes Advisor

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Today’s best interest rates on CDs, or certificates of deposit, range up to 3.25%, depending on the term of the CD. Take a look at the highest rates and typical returns offered on CDs of different terms.

Related: Compare the Best CD Prices

Highest CD rates today: 1 year, 6 month, 9 month terms

The highest interest rate currently offered on a one-year CD — one of the most popular CD terms — is 2.86%, according to data from If you find a 12 month CD with a rate in that vicinity, you’ve found a good deal. A week ago, the best rate was below 2.85%.

The average APY, or annual percentage yield, on a one-year CD is now 1.38%, down from 1.37% a week ago. APY provides a more accurate calculation of the annual interest you’ll earn with a CD because it takes compound interest into account. This is the interest you earn not only on your deposit (or principal) but also on account interest.

If you’re interested in a shorter-term CD, today’s best six-month CD rate is 2.25%. The highest rate was the same as last week. The current average APY for a six-month CD is 0.90%, down from 0.91% last week at this time.

On nine-month CDs, the highest interest rate is now 1.98%; last week it was the same. Nine-month CDs are offered today at an average APY of 0.91%, up from 0.90% a week ago.

Highest CD rates today: 15 month, 18 month and 2 year terms

On a 15-month CD, today’s best interest rate is 2.76%; you’ll do well if you can find a rate in that range. A week ago, the highest rate was 2.66%.

The highest rate on an 18-month CD is currently 2.95%, up from 2.76% a week ago. The average APY is 2.01%, down slightly from 2.02% a week ago.

If you can hold out for two years, 24-month CDs are offered today at interest rates as high as 2.96% APY. The highest rate last week at this time was similar at 2.96%. Two-year CDs now have an average APY of 1.60%. That’s a jump from 1.58% last week at this time.

CDs are term savings accounts that pay a fixed rate of interest. You are not expected to touch your deposit until the end of the CD term, whether in six months, one year or five years. Your patience is rewarded with interest that is usually better than what you would earn with a regular savings account.

If you withdraw money from a CD before ‘maturity’ – when it reaches the end of its term – and you can be slapped with hefty penalties. For example, you can lose up to six months’ interest if you pre-withdraw a one-year CD.

Highest CD rates today: 3-year and 5-year terms

CDs with longer terms often have some of the most attractive interest rates and APYs, if you’re willing to keep your money locked in for years.

The average APY on a three-year CD is now 1.68%, down from 1.70% a week ago.

On a five-year CD, the highest rate today is 3.25%, the same as a week ago. APYs are averaging 1.88%, similar to this time last week.

The longer the duration, the more severe the early withdrawal penalty. It’s not uncommon to lose a full year of interest or more if you open a five-year-old CD too soon. Be absolutely certain that you understand the penalty before making your investment.

How CDs Work

You “buy” a CD from a financial institution by opening the account with a lump sum deposit, which becomes the principal of the CD. CDs and stock certificates (the credit union equivalent of bank CDs) often require you to make a minimum deposit. Minimum requirements vary by institution and range from one dollar to tens of thousands of dollars. Some institutions do not require a minimum.

Once you have deposited your capital, you start the countdown to your timed investment and start earning interest. The bank or credit union will provide you with regular statements showing the amount of interest you are accumulating.

Remember, you must avoid the temptation to dip into your CD before the end of the term. Early withdrawal penalties can be so severe that they take over your interest and then start eating away at your capital.

Are CDs a good deal?

CDs generally pay higher interest than other savings vehicles, even the best high-yield savings accounts and money market accounts. And while they may not offer the kind of enviable returns possible with stocks, CDs trump the most eye-catching investments in one respect: they’re one of the safest places to put your money.

Investors lost millions in the crypto crash of 2022, and investing your money in the stock market, real estate, or gold and other commodities can also be risky. But when you buy a credit union certificate of deposit or stock certificate from a federally insured financial institution, you can sleep easy knowing your investment is protected.

The FDIC offers you up to $250,000 of coverage in the event your CD-issuing bank defaults. For stock certificates purchased from federal credit unions and most state-chartered credit unions, the NCUA insures your money up to the same limit.

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