The best savings and CD rates are still rising, only a few weeks ahead of the holiday season and the year’s final Federal Reserve meeting.
Average rates across all terms and account types are up this week, continuing the steady increase we’ve seen over the past several weeks.
The Fed has been quick to raise rates this year in its effort to lower runaway inflation, with four consecutive 75-basis point rate hikes bringing the federal funds rate range to 3.75-4.00%. There are signs that increased rates are having the right effect: the latest consumer price index showed inflation down to 7.7% from 8.3% in last month’s report. Some experts we’ve spoken to predict another rate hike may bring a 50 basis point increase next month.
While we don’t yet know whether inflation will continue trending down and prompt the Fed to ease the gas on rate hikes, expert advice remains the same: saving today can help you prepare for what’s to come.
“I try not to get too caught up in what might happen in the near future [or] in the long future,” says Kerry O’Brien, CFP and founder of BeingFIT Financial. “Instead, just try to make a plan around all of it.” You can make the best financial choices possible based on what’s within your control, she adds.
Here are the best savings and CD accounts this week, and how they can help you get started toward your goals.
How NextAdvisor Analyzes CD and Savings 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 — you can find more about how we choose the banks included in our lists on those pages.
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.
The Best Savings Rates This Week
Rates are steadily going up among the best high-yield savings accounts, but fewer banks increased savings rates this week compared to last.
Bankrate’s national survey on savings rates increased from 0.16% to 0.18%. And the Federal Deposit Insurance Corporation’s national monthly index increased to 0.24%. Both of these national averages include traditional savings accounts, which have lower rates than high-yield savings rates.
While there were only a few banks that increased savings account rates this week among those we track, it was still enough to push the average from 3.06% to 3.12%.
Here are the best high-yield savings account rates this week:
- UFB Direct: 3.83% APY
- TAB Bank: 3.64% APY
- Bask Bank: 3.60% APY
- Bread Savings: 3.50% APY
- Dollar Savings Direct: 3.50% APY
- Salem Five Direct: 3.50% APY
The Best CD Rates This Week
CD rates are steadily going up, as short-term CDs continue with the highest rate jumps.
Bankrate’s weekly national rate survey this week showed that one-year CDs went from 1.13% to 1.16% on average, while five-year CDs went from 1.03% to 1.05%. Meanwhile, three-year CDs dropped from 1.00% to 0.99%.
CD rates that we track at NextAdvisor went up for all terms, with some continuing to rise past a 4.00% average. One-year CDs went from 4.04% to 4.14%. Three-year CDs jumped from 3.73% to 3.78%, and five-year CDs increased from 4.01% to 4.05%.
Here are the best CD rates by term this week:
- CFG Bank: 4.60% APY
- Bread Savings: 4.50% APY
- Sallie Mae: 4.50% APY
- Bread Savings: 4.75% APY
- CFG Bank: 4.60% APY
- Sallie Mae: 4.55% APY
Why Consider High-Yield Savings Accounts Today?
Between rocky housing and job markets, runaway inflation, and rising rates, many experts we’ve spoken to are concerned about a potential economic downturn. No matter what the future holds, a well-stocked emergency fund in an interest-earning account is one of your best defenses.
While today’s savings rates — even the best rates around 3.00%-4.00% APY — aren’t enough to offset high inflation, these accounts are still better than just sitting your money in your bank account or regular savings account,” says Rosario Chacòn, CFP and founder of Wealth-Source Financial, a financial planning firm in Oakland, California.
Those traditional savings accounts may earn as little as 0.01% (or even nothing at all). They’re typically the accounts you’ll find from large, national brick-and-mortar banks. It’s “ridiculous,” Chacòn says. “They give you no returns.”
High-yield savings accounts are more common among online banks and even some credit unions. Without the same overhead costs of many branches across the country, these banks are able to pass on savings to customers in the form of higher interest. But they can come with some drawbacks, like no way to deposit cash, fewer customer service options, and a necessity to be mobile-savvy.
Above all, shop around to make sure you’re getting the best combination of competitive rates and account details that work for you. And to kickstart your balance, set up automatic transfers every month or every pay period so you can more easily contribute regularly.
If you’re juggling saving and paying off credit card or high-interest debt, O’Brien recommends balancing the two over time with the money you have available. “But first and foremost, ensure you have at least one month of cash in an emergency reserve,” she says, especially with rising costs.
When to Choose Opening a CD
For most of this year, CDs have been tricky to navigate. Rising rates mean that locking in a CD rate now could mean forfeiting potentially better rates in the future.
As a result, experts recommend steering clear of long-term CDs in favor of short-term CDs, or even building a CD ladder with short-term CDs.
With rates going up and some shorter-term CDs offering stronger rates than longer ones, “we have to be cautious,” says Chacòn. There will be a time for longer-term CDs, though: when the Fed signals it may drop rates in the future, locking in a great APY at the peak can help you earn solid returns even as rates fall.
But it’s important to have a goal in mind for any money you put into a CD since that can help you decide on the right term length.
Buy them with a purpose, says O’Brien. “Go into it knowing that if things change, you certainly can take your money out early and just forfeit that little bit of interest.” Many CDs charge a penalty fee for early withdrawal equal to a portion of your interest earned.
CDs can be great for people nearing retirement or who live on a fixed income, says Chacòn. And incorporating a CD ladder can be even more useful for maintaining accessibility to some of the money while earning the guaranteed return CDs offer.
Savings and CD Rate Frequently Asked Questions
Is it better to put money in a CD or savings account?
It depends on your financial situation. Savings accounts are great for emergency funds or other money you may need to access quickly. CDs, on the other hand, can be good for money you already have saved and want to reserve for a specific point in the future.
Who has the highest paying CD right now?
Right now, Bread Savings has the highest one- and five-year CDs, with 4.50% and 4.75% APYs, respectively. CFG Bank has the highest three-year CD, with a 4.60% interest rate.
How often do savings account rates change?
High yield savings account rates can change rapidly, but it depends on each individual bank. Some banks raise rates in small increments frequently, while others make big rate jumps then wait several weeks to go up again.
Who has the best savings account rate right now?
This week, UFB Direct has the highest savings account rate among banks we track, with a 3.83% APY.