The Highest Short-Term CD Rate Is Over 4%, But It’ll Cost You. What to Know

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The best short-term CDs right now can earn you more than 4% APY — if you’re willing to lock down a fixed rate today.

Short-term CDs are among the only certificates of deposit experts recommend right now, as the Federal Reserve keeps hiking rates to combat inflation. The Fed raised rates again this week, for the seventh time this year. These low-commitment CDs can help you earn great interest rates while maintaining some flexibility while rates rise.

“CDs [with terms from] six months to one year are the sweet spot right now,” says Marty O’Leary, a certified financial planner and founder of Stadium Financial, a financial planning firm in Lake Murray, Florida.

Based on our analysis of over 50 CDs available today, you can get up to 4.40% with a six-month CD, while the highest one-year CD offers 4.86% APY. Here’s more about the best short-term CD rates right now, and what to consider before you open one:

The Best 6-Month CD Rate Right Now

The best six-month CD today rate today according to our analysis is 4.40%, from Merrick Bank. It requires a $25,000 minimum deposit.

Merrick Bank offers CD terms ranging from three months to five years. If you plan to open a CD, keep in mind that you’ll need to fund the account online or through an ACH transaction. Merrick Bank is an online-only bank with limited banking options. Checking and savings accounts are not offered. It only offers CDs, rewards and secured credit cards, and loans. If you’d rather manage your money in-person or want more banking options, it’s best to consider other options. 

More 6-month CD Rates

If you have at least $25,000 to deposit, and Merrick Bank’s six-month CD fits your goals, it could make a good choice with easy online account access. Compared to the current average 3.28% APY among high-yield six-month CDs we track at NextAdvisor, Merrick’s 4.40% APY can add a lot to your balance over the term, depending on how much you have to deposit.

Here’s how Merrick Bank’s rate compares to this average, given a $25,000 deposit:

Deposit6-Month CD APYInterest EarnedBalance at Maturity

There are plenty of great CD options for six-month terms that earn above the average rate you may want to consider, too. Here are a few of the top six-month options from our list of best CD rates today

  • Live Oak Bank: 4.25% APY, $2,500 minimum deposit 
  • Popular Direct: 4.25% APY, $10,000 minimum deposit
  • Synchrony Bank: 3.75% APY, no minimum deposit 
  • Marcus by Goldman Sachs: 3.50% APY, $500 minimum deposit 

The Best 12-Month CD Rate Right Now

You can get even more value today from a one-year CD if you’re willing to commit to the longer term.

CFG Bank has the highest 12-month CD rate by our analysis, with a 4.86% APY. It requires a $500 minimum deposit.

CFG Bank offers CDs, money market accounts, and high-yield savings accounts. There are two bank branches and online banking available. If you open a CD with CFG, there’s a 7-day withdrawal penalty if you withdraw money or change your mind within six days of opening the CD. Other fees for CDs may also apply, which could impact your balance at the end of your term.

With a minimum of $500 in a CFG one-year CD, you’ll earn an estimated $24 in interest when your CD matures — but can boost those earnings with a higher deposit. 

More 12-month CD Rates

Among the accounts we track, the best one-year CD rates have an average 4.26% APY right now. But some of the accounts on this list have interest rates close to CFG, with varying minimum deposit requirements. Here are a few of the best one-year CDs available today:

  • HSBC Bank: 4.25% APY, $1,000 minimum deposit 
  • Sallie Mae Bank: 4.25% APY, $2,500 minimum deposit
  • Banesco USA: 4.40% APY, $1,500 minimum deposit

How We Found the Highest CD Rates

In our search for the highest CD rates, we started with the accounts on our ongoing list of best CD rates, along with the Federal Reserve’s largest commercial banks and more than 50 commonly reviewed and searched-for banks.

To compile the best CD rates, we typically filter out some accounts based on fees, minimum deposits, or other account requirements. However, because we wanted to find the highest single interest rate by six-month and one-year terms, we didn’t disqualify any accounts based on these factors.

Should You Open a CD as Rates Rise?

As the Fed keeps enacting federal rate hikes and prices on everyday items remain high, securing a savings safety net can help you stay financially prepared. 

A short-term CD is one way to maintain some access to your savings but still earn a competitive rate. Before you lock your money into a CD though, consider other account types that may fit your goals and savings balance.

A high-yield savings account, for example, may earn slightly lower interest today — the average APY is around 3.37% — but you don’t need to lock in your savings for any amount of time, and variable interest will continue to rise as rate hikes go on. Over time, you may be able to earn a similar return with a high-yield savings account as you would locking in a CD today, with greater liquidity and no minimum deposit. 

Saving is key 

Rather than chasing the best yield and putting off opening an account, the best thing you can do to boost your savings balance is to start saving. 

Pick a competitive interest-earning account with an interest rate, fee structure, and minimum that works for you. Then start putting money in that account to kickstart your savings journey and earn a return. 

Highest CD Rate FAQs

What is considered a good CD rate?

A big factor in your CD rate is the term length. For shorter-term CDs that mature in a year or less, we consider at least a 3.50% APY a good rate.

Are CD rates expected to rise in 2022?

Yes, experts predict that savings and CD rates will continue to rise as long as the Federal Reserve continues federal rate hikes. However, that also means you could miss out on higher rates to come by locking your money in a CD today.