Lock in yields of 4.5% and higher this weekend to stay ahead of inflation — Nov. 22, 2024

With the year’s best interest rates inching lower, finding ways to protect your purchasing power has become even more important. Today’s top certificates of deposit offer APYs of 4.5% and higher, providing a reliable shield against falling yields and rising prices, with guaranteed returns at nearly double the current 2.6% inflation rate.

Unlike traditional savings accounts earning a variable 0.50% APY on average, CDs lock in competitive yields that won’t change until maturity. This predictability makes CDs worth your while, since they protect your money from the eroding effects of inflation and rate drops.

Not ready to set aside money into one long-term CD? Build a CD ladder that spreads out your deposit across multiple maturity dates, giving you staggered access to your funds while leveraging today’s elevated rates, then store your remaining funds in a top high-yield account for easy access for emergencies or short-term savings.

Your money in CDs and high-yield savings are protected by FDIC insurance up to $250,000, just like at traditional banks. Plus, compound interest helps your money grow faster by earning returns on both your initial deposit and accumulated interest.

Here are the highest rates through the weekend on FDIC-insured CDs across various terms — with signup in minutes.

💰 Today’s best savings rates: Make more on your money this weekend with the best APYs of up to 5.10%

Best CD rates for November 22, 2024

Today’s best rates of returns are found at FDIC-insured digital banks and online accounts paying out a limited promotion of up to 5.25% APY on a 10-month CD at Langley Federal Credit Union and up to 4.75% with low or no minimums at Trustco Bank, NexBank and other trusted providers as of Friday, November 22, 2024.

Select APY to sort by yields, or sort by term to find the best fit with your financial goals.

Online-only banks and digital accounts may not sound as familiar as bigger names, though each is FDIC-insured or partners with an FDIC-insured bank to offer deposit accounts that are protected for up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) — just like those at your neighborhood bank.

Dig deeper: How to protect your money from Fed rate cuts

How a certificate of deposit works

A CD is a type of savings or deposit account that’s offered by banks, credit unions and other financial institutions. Unlike a traditional savings account, a certificate of deposit holds your money for a fixed period of time — terms of one month to five years or longer — paying out your initial deposit and interest you’ve earned after the term expires or “matures.”

Typical CD rates are fixed, which means you’re guaranteed a rate of return that doesn’t change. While you can’t add to or access your cash until the CD matures, the trade-off is a safe, stable way to earn a much higher yield than you’d find with a traditional savings account.

Dig deeper: How CDs work — including 7 types for boosting your savings

Traditional CD rates

The Federal Deposit Insurance Corporation tracks monthly average interest rates paid on certificates of deposit and other savings accounts. Created by Congress, the FDIC is an independent government agency charged with maintaining stability and public confidence in the U.S. financial system and providing insurance on consumer deposit accounts.

Here’s how FDIC national deposit rates on a $10,000 minimum deposit compare between October and November 2024, showing all terms trending down.

The FDIC is an independent government agency charged with maintaining stability and public confidence in the U.S. financial system and providing insurance on consumer deposit accounts.

Dig deeper: Best low-risk investments for retirees with steady returns on your nest egg

CD rates in the news

CD rates strongly track with the key interest rate set by the Federal Reserve, the U.S.’s central bank. This Fed rate is the benchmark that affects rates on deposit accounts, loans, mortgages, credit cards and other financial products. Typically, as the Fed rate rises, so do APYs on savings products like CDs, high-yield accounts and money market accounts.

After increasing the target interest rate 11 times from March 2022 to July 2023 in an effort to combat the highest inflation in four decades coming out of the pandemic, the Federal Reserve announced a highly anticipated half-point cut to its federal funds target interest rate on Sept. 18 and an additional quarter-point cut after its November policy meeting on Nov. 7.

November 7, 2024: Fed lowers benchmark rate by quarter point — second cut since March 2020

At the conclusion of its seventh and penultimate rate-setting policy meeting of 2024 on November 7, 2024, the Federal Reserve announced it was lowering the federal funds target interest rate by 25 basis points to a range of 4.50% to 4.75% — two months after its jumbo half-point cut on Sept. 18.

The Fed’s decision came days after Donald J. Trump was elected 47th president of the U.S. and amid conflicting economic signals, with inflation at its lowest in more than four years yet data showing weak employment growth.

In its post-meeting statement, the Federal Reserve said it was lowering the target range, citing “labor market conditions have generally eased, and the unemployment rate has moved up but remains low” while acknowledging a “somewhat elevated” inflation rate. “In considering additional adjustments,” the Fed said it would “carefully assess incoming data, the evolving outlook, and the balance of risks.”

Economists estimate another rate cut in December with additional cuts in 2025 — though with the impacts of a Trump presidency uncertain, it’s unclear how many or how deep the cuts to expect.

What to expect at the Fed’s next policy meeting: December 17–18, 2024

Traders are split as to what the Federal Reserve will decide at its next policy meeting on December 17 and December 18, 2024. The CME FedWatch Tool, which measures market expectations for Fed fund rate changes, projects a 59% chance the Fed will cut rates by a quarter percentage point to a range of 4.25% to 4.50% at its December meeting.

Economists are keeping a close eye on inflation and labor reports amid speculation as to timing of future cuts to the Fed rate. Signs of cooling inflation paved the way for September’s first rate cut in four years, with economic data indicating a continued decline from a peak of 9.1% in June 2022 to rates that have ranged from 2.5% and 4% since May 2023.

An eagerly awaited jobs report released November 1 showed hiring slowing substantially, with employers adding only 12,000 jobs to payrolls in October — a far lower total than the 105,000 anticipated by Bloomberg after accounting for Hurricanes Helene and Milton and the ongoing Boeing strike. Employment figures were revised for the previous two months by 112,000, raising concerns about a cooling job market. The unemployment rate held at 4.1%.

Against the weaker-than-expected jobs report came a one-two punch of new economic data for October, a week after a U.S. presidential election in which the economy factored largely into voter concerns. The consumer price index released on November 13 showed prices of consumer goods and services rising 2.6% year over year, while the producer price index released on November 14 reported a similar increase in wholesale prices — or the prices manufacturers pay to producers of goods and services. Both reports are a sign of stalled progress in the fight to tame post-pandemic inflation, keeping a Fed rate cut on the table for December.

At a November 14 speech to business leaders, Federal Reserve Chair Jerome Powell said the Fed isn’t “in a hurry to lower rates,” citing strong economic growth: “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”

The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on Wednesday, December 18, 2024, at 2 p.m. ET.

Dig deeper: When’s the next Federal Reserve meeting? What to expect — and how it affects your finances

How to compare CDs

When choosing the best certificate of deposit for your budget, compare these key factors against your specific savings or financial goals.

• Term length. A CD is ideal for saving toward a specific goal with money you’re not likely to need until the account matures. Look to shorter terms for saving toward, say, a family holiday or home renovation. Terms of one to five years or longer can help you lock in today’s highest APYs before interest rates inch lower.

• Rate of return. Look for the highest APY for the term you’re interested in. The APY is the amount of interest the CD earns in a year — including compounding. Unlike a savings account, CD rates are fixed, meaning they won’t change over the life of your term.

• Minimum deposit. While you can find CDs without minimum starting deposits, some CDs require $100 to $1,000 to open an account. Generally, if you have the money for a higher initial deposit, you can earn a higher APY — just be sure that amount isn’t a hardship on your budget.

• Type of bank or financial institution. Today’s best interest rates are offered by digital banks, with few exceptions among traditional brick-and-mortar banks or credit unions. If you aren’t comfortable with an online-only bank, look to a high-yield savings account or money market account offering a high rate without withdrawal penalties.

• Penalties and fees. Life happens, and you might find yourself needing to tap into your money before the CD matures. Early withdrawal penalties are typically expressed in months of interest you’re giving up — for example, 90 days of interest for CD terms of up to 24 months. Often the longer the term, the higher the penalty fee.

Dig deeper: When is it worth it to break a CD? An expert’s thoughts on early withdrawals and breaking even

Benefits of a certificate of deposit

• Guaranteed returns. With a CD, you make one deposit and earn a guaranteed interest rate over your term that’s yours after the CD matures.

• Higher rates than traditional accounts. Many banks and financial institutions offer CDs at rates that are higher than you’ll earn with the average savings or money market account — with digital and online banks offering the highest rates on average.

• Range of CD terms. You can find CD terms of three months to five years or more to fit your financial goals. Rates for six-month CDs can outpace the average bank account, and longer terms offer rates comparable to the best high-yield savings accounts.

Drawbacks of a certificate of a deposit

• Penalty for early withdrawals. If you need to access your money before your CD term expires, you face fees equal to several months of interest — as much as three to six months’ worth, depending on the account and your term.

• Not the highest investment returns. CDs are a safe way to steadily earn interest, but you stand to earn more over the long term through stocks, bonds or securities. And by locking your money in a CD, you could miss out if average rates increase.

• You can’t add more money. After your CD locks, you aren’t able to add to your balance until after the CD matures — at which point, you can move your money to another account or roll it over to a new CD.

Dig deeper: High-yield savings account vs. CD: What to know when rates are high

Alternatives to a certificate of deposit

A certificate of deposit isn’t the only low-risk way to earn interest on your savings. Look to these alternatives that offer safe, steady returns — with the flexibility to add to or withdraw your money without penalty.

Dig deeper: The best low-risk investments for retirees for safe, steady returns

FAQs: CDs, safety and growing your money

Learn more about how certificates of deposit work when comparing the best for your budget and financial goals.

How do banks make money with a CD?

Banks charge higher interest rates on money they lend out than the interest they pay on customer deposit accounts. The difference is called a spread, and it’s what banks rely on to make money. Unlike a traditional savings account that allows for flexible movement of your money without penalty, a CD requires you to lock in your deposit over a specified period of time, returning your principal plus interest after the account matures. That lock-in period — and penalties that discourage your early withdrawal — allows a bank to better plan how long it has to make money off your deposit, and it’s typically willing to pay a little more for that reliability.

Is my money safe with an online-only bank like Lending Club or SoFi?

Yes. Online-only banks and digital accounts are as safe as their traditional counterparts. They are either FDIC-insured chartered banks or partner with more recognizable banks to offer deposit accounts that are protected by the government for up to $250,000. The FDIC insures the safety of your money, even if the fintech were to fail or go out of business. Look for terms like “member FDIC,” “FDIC insured” or “NCUA insured” when comparing your options. Learn more about how online banks compare to traditional banks when it comes to rates, fees and management of your money.

What is compound interest?

Compound interest is often described as earning interest on your interest. It’s a powerful way to boost your savings over time by earning interest on both your initial deposit and any interest you earn along the way. It means that every dollar you save is working harder and growing faster toward your financial goals.

An account’s APY is the total amount of interest you’ll earn on your deposit over one year, including compound interest, expressed as a percentage. Learn more about how you can turn time into money in our guide to how compound interest works.

What is a jumbo CD?

A jumbo CD is a certificate of deposit that requires a minimum of $100,000 to open the account. Like regular CDs, jumbo CDs come with a fixed interest rate and term. In the past, jumbo CDs offered a way for people and businesses to safely invest money at higher rates than available with a traditional CD.

However, with the Fed holding interest rates at 23-year highs, it’s not always true that jumbo CDs have a higher interest rate than traditional CDs. Learn more about jumbo CDs and why it’s wise to shop around before locking your money into one.

What is a no-penalty CD?

A no-penalty CD — also called a liquid CD — is like a traditional CD through which you lock in a deposit for a guaranteed rate of return over a stated period of time, but with the flexibility of withdrawing your money without penalty before the CD matures. This flexibility comes with trade-offs, however, including lower rates of return than a traditional CD. With rates at historic highs, a high-yield savings account may offer comparable or even higher rates than a no-penalty CD with the same flexibility. Learn more about what to watch for with no-penalty CDs.

What is a CD ladder?

A CD ladder is a savings strategy designed to spread out your money across multiple CDs to leverage high rates without tying up your full investment into one long-term CD. The result of CD laddering is access to a portion of your investment at regular, timed intervals. Learn how to build a CD ladder that helps you lock in today’s highest rates while enjoying rolling returns — before today’s best rates are gone.

What is a brokered CD?

A brokered CD is a certificate of deposit you buy through a brokerage firm, instead of from a bank or credit union. Like traditional CDs, you choose a term length that comes with a set interest rate. But unlike with regular CDs, you can buy them through your investment account either new or “used” from other investors. Learn more about brokered CDs — and what to consider before investing in one.

Editor’s note: Annual percentage yields shown are as of Friday, November 22, 2024, at 8:10 a.m. ET. APYs and promotional rates for some products can vary by region and are subject to change.

Sources

• National Rates and Rate Caps, FDIC. Accessed November 19, 2024.

• Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed November 14, 2024.

• Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed November 15, 2024.

• Employment Situation Summary, U.S. Bureau of Labor and Statistics. Accessed November 4, 2024.

• CME FedWatch Tool, CME Group. Accessed November 22, 2024.