Average CD and Savings Rates Are Up. What You Should Know Ahead of Today’s Federal Reserve Meeting

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Average savings and CD interest rates saw another incremental boost this week. 

Increases are likely to continue over the next couple of weeks and beyond, as the Federal Reserve’s next decision on interest rates approaches. In fact, Fed Chair Jerome Powell recently signaled higher rates may be coming, even before the latest Consumer Price Index showed inflation remains high:

“I can assure you that my colleagues and I are firmly committed to this project,” Powell said, referring to stabilizing prices by bringing down inflation. “And we will keep at it until the job is done.”

And that means average savings and CD rates will continue to increase. 

With another rate hike looming, here’s a closer look at how CD and high-yield savings rates are trending now, and what experts want you to know before choosing a CD or savings account today: 

Another Fed rate increase is coming soon
Interest rate hikes mean more money earned on your savings. Switching to a bank with one of the best available rates right now can help ensure you’re getting the greatest return.
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How NextAdvisor Determines These Average Rates

We compare three different averages in our average CD and savings rate analysis. First, we review national deposit rates from the Federal Deposit Insurance Corporation (FDIC) and Bankrate’s national index of deposit accounts based on a weekly survey (like NextAdvisor, Bankrate is owned by Red Ventures). We also calculate the current average rate of each bank on our list of best CD rates and best savings rates.

The differences between national average savings rates and NextAdvisor’s analysis of interest rates is largely due to the much higher APYs that online banks pay.

National surveys from the FDIC and Bankrate include many different types of financial institutions, including large national banks that charge as little as 0.01% APY. Our lists, on the other hand, is made up of online or hybrid banks with fewer overhead costs, which allows them to pass on savings in the form of interest to customers.

Average CD Rates This Week

CD TermFDIC National Deposit RateBankrate National IndexNextAdvisor Average APY
1 year0.46%0.66%2.55%
3 years0.54%0.68%2.73%
5 years0.64%0.75%2.99%

Several CD options listed among our best CD rates have APYs higher than these averages. Here are a few of the best rates this week by term: 

1-Year Rates

  • Bread Savings: 3.00%
  • Synchrony Bank: 2.75%
  • Live Oak Bank: 2.75%

3-Year Rates

  • Bread Savings: 3.55%
  • CFG Bank: 3.25%
  • Barclays Bank: 3.10%

5-Year Rates

  • Bread Savings: 3.65%
  • Synchrony Bank: 3.50%
  • CFG Bank: 3.40%

Average Savings Rates This Week

FDIC National Deposit RateBankrate National IndexNextAdvisor Average APY
0.13%0.13%2.00%

Many banks among our best savings account rates have APYs higher than these averages. Here are a few of the best savings rates for this week: 

  • UFB Direct: 2.61%
  • Prime Alliance Bank: 2.26%
  • TAB Bank: 2.16%
  • Bread Savings: 2.15%
  • CIT Bank: 2.10%

This Week’s Average Rates Compared to Last Week 

Average interest CD and savings rates increased overall, though average increases were not as high as they’ve been over some recent weeks.  

Bankrate’s weekly survey of national banks showed no change in savings accounts, though one- and three-year CDs rose by a marginal 0.01% and five-year CDs went up by 0.02%. 

Average rates based on our analysis of best CD rates and best savings rates on NextAdvisor increased by a wider margin. This week, 1-year CDs went from 2.52% to 2.55%, three-year CDs increased from 2.72% to 2.73%, and five-year CDs remained the same at 2.99%. Savings account rates also rose significantly this week from 1.92% to 2.00% APY, with banks like Dollar Savings Direct and Barclays joining others that have increased rates past 2%.  

Choosing Between a CD or High-Yield Savings Account

Slow, steady, rate increases aren’t changing experts’ opinions on where to keep your savings for now — especially ahead of another federal rate increase

“I’d park cash in a flexible, liquid high-yield savings account until at least after the next Fed meeting,” says Ayesha Selden, a certified financial planner and franchise owner of Ameriprise Financial Services Inc. in Philadelphia. “I’d be reluctant to tie up any cash in a fixed-rate product for greater than 30 days in this rapidly rising rate environment.”

A liquid, variable rate high-yield savings account can be great for money you may need to access on short notice — like an emergency fund — or cash you’re saving for a specific purpose in the near future.

Most importantly, you should avoid any account that doesn’t give you liquidity, says Cory Moore, certified financial planner and founder of Moore Financial Planning.

”Utilize shorter-term CDs or high-yield savings accounts no matter what happens with the upcoming Fed decision,” says Moore. “The objective of these vehicles are liquidity and stability, not necessarily growth, so holding out for an upcoming Fed decision may not be very beneficial.” 

If you’re still leaning toward CDs, it’s best to choose a shorter term. Putting your money in a longer-term CD (one with a three- or five-year term) right now may mean that you miss out on a better return as rates continue to rise. But because experts expect rate increases over the next several months, a six-month or even one-year CD term may put you in a better position to take advantage of today’s rates while having the option to roll your money over into a higher-rate CD in a few months.

CD and Savings Account Rates FAQ

How much is the early withdrawal penalty for a CD?

If you want to take money from your CD before it reaches maturity, the amount of interest you pay as an early withdraw penalty will depend on your bank and CD term. Read the terms of your account agreement before opening a new CD so you know any potential penalties from the start.

Can you roll a CD to another bank?

You can withdraw money from your CD to open a new one or a savings account at another bank, but you’ll pay a penalty if your CD hasn’t reached maturity yet.

Is there a fee to withdraw from a high-yield savings account?

There’s typically no fee for withdrawing from your high-yield savings account. However, some banks may charge for making more than six transfers or withdrawals in a single monthly statement period. And if your savings account has debit card access, you may be charged an ATM fee when you withdraw with the card. Check your account agreement for the exact fees that may apply for you.

What is the best high-yield savings account rate right now?

Some banks are offering high-yield savings APYs over 2% right now. Among the banks on our list of best savings rates, the highest offer this week is UFB Direct’s high-yield savings account, with a 2.61% APY.