Best CD Rates in December 2024

A savings account offers a secure way to grow your money, but the current interest rate environment is making CDs an attractive choice. The Federal Reserve has raised the federal funds rate 11 times since March of 2022, pushing CD rates to highs that haven't been seen in years. With rate cuts expected to come in 2024, now may be an ideal time to consider opening one or more CD accounts to cash in on impressive yields.

Some of the best CD rates vary based on the term. Those CD terms are often the sweet spot for earning the highest yields, though banks can sometimes offer higher rates on shorter or long-term CDs. The best CD overall is the one that offers a term you're comfortable with, while paying the highest possible rate.

If you're hoping to get the most interest for your money, it's important to know which banks and credit unions offer the best CD rates. We've rounded up the best CD rates available now to help you grow your savings.

Our recommendations

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Best CD rates today compared

Methodology

We chose the best CD rates based on which banks offered the highest APYs as of December 1st, 2023. In creating our rankings, we also considered the minimum deposit requirements to open a CD and the range of terms offered. Our final rankings reflect the best CD accounts that are available online, from both online-only and traditional banking institutions. We only included those that insure deposits through the FDIC.

How to select the best CD account for you

There are many options for opening CD accounts, including online banks and brick-and-mortar banks. Credit unions offer a similar type of account called a “share certificate,” which pays dividends rather than interest—but works the same way and is insured through the National Credit Union Administration (NCUA).

Finding the best CD account for you starts with understanding what you need and researching what different banks have to offer.

Here are some tips for choosing the best CD account for you.

• Shop around. CD rates, maturity terms, and minimum deposit requirements can vary widely from one bank to another. It pays to shop around to see what banks are offering for different CD terms.
• Know your goals. Knowing what you want a CD account to do for you can make it easier to choose the right one. For example, if you're saving for a car, you might want a longer-term CD with a higher APY. On the other hand, if you're saving for a vacation you plan to take in the next year, a shorter-term CD might be best.
• Compare minimum deposits. Some CDs require more money to open than others. It's important to choose a CD that allows you to deposit an amount that’s comfortable for you.
• CD rates. Interest rates are always important, and the rate you earn with a CD can vary by term. While longer-term CDs usually pay higher rates, that's not always the case. Some banks offer special CDs with shorter terms that pay more interest for your money.
• Early withdrawal penalties. CDs allow you to save for a set period. Withdrawing money early could result in a penalty, so it's important to know what you might pay if you need to tap into your savings ahead of schedule.
• Other banking options. If you're looking for all-in-one banking, you might be interested in what else a bank has to offer besides CDs. This can include other types of accounts, such as checking accounts, savings accounts, money market accounts, and loans.

How are CD rates changing?

Until recently, CD rates were on an upward trend and had been for some time. For instance, the national average rate for a 12-month CD rose from 0.96% in May 2022 to 1.88% in September 2024. However, that has dropped to 1.84% as of Nov. 18, 2024.

Why were CD rates on the rise? It had to do with adjustments to the federal funds rate, which is the rate at which deposit institutions lend money to one another overnight. The Federal Reserve controls movements in the federal funds rate to manage monetary policy in the U.S.

When there’s an increase in the federal funds rate, banks can raise rates for CDs and other interest-bearing accounts. Likewise, loan and credit card rates can also rise. Conversely, when the Fed cuts rates, banks can pay less to savers and charge lower rates for loans.

Since March 2022 the Fed has raised rates 11 times in an attempt to curb rising inflation while never instituting a single cut. However, it finally did cut rates in September and November, by 0.50% and 0.25%, respectively, and it could cut rates at least one more time before the end of 2024. Opening a CD account now before that happens (the Fed has one more 2024 meeting scheduled, on Dec. 18) is probably a good idea.

Alternatives to CDs

A CD account is one way to save, but it's not the only option. You might also consider any of the following if you're looking for CD alternatives:

• High-yield savings accounts.
• Money market accounts.
• Interest-bearing checking accounts.
• Savings bonds.

You might also consider opening an investment account to purchase stocks, bonds, or other securities. Investing money could help you to earn even higher interest rates. However, it's important to keep in mind that investing can be risky, and there's always the possibility that you might lose money.

TIME Stamp: Opening a CD gets you closer to your savings goals

Your choice of bank matters. You might choose one of the options included here or start your search at your current bank before branching out. When comparing CD rates, remember to also factor in maturity terms, early withdrawal penalties, and which way interest rates are moving in general.

Frequently asked questions (FAQs)

What is considered a good CD rate?

What constitutes a good CD rate can depend on the overall interest-rate environment. If rates are low in general, anything approaching 1.00% might be good. When rates are high, it's not unusual to see banks offering APYs in the neighborhood of 5.00%. Comparing different banks can help you find the best CD rates.

What is the highest-paying 12-month CD?

There are a number of online banks that offer 12-month CDs with competitive rates. Some of the highest-paying 12-month CDs have rates ranging from 4.75% to 5.00%. Traditional banks can also offer 12-month CDs, though it's not uncommon to see much lower rates.

Are 10-year CD rates worth it?

Whether it makes sense to choose a 10-year CD can depend on your goals and what you expect to happen with CD rates. A 10-year CD with a 5.00% APY may be attractive if you expect CD rates to drop substantially and remain low during that time period. On the other hand, a 10-year CD may not be worth it if you expect CD rates to rise or know you'll need your money before maturity.

***APY is subject to change. APY is updated as of Dec. 2, 2024.