* indicates the highest APY offered in each semester. To view listings of the highest paying CDs across the terms of bank and credit union certificates and mega certificates, click the column headers above.
Despite the suggestion that a larger deposit entitles you to a higher payout, this is not always the case for hefty certificate rates, which often pay less than standard CDs. Although today’s best jumbo deals, which typically require a deposit of $100,000 or more, beat the standard best prices in six CD periods, you can do as well or better in the other two quarters with a standard CD. So always make sure that you have purchased each type of certification before making a final decision.
Will CD Prices Increase in 2023?
This year has already seen interest rates on loans reach record levels, but they could go even higher. This is because some banks and credit unions are still reacting to the central bank’s hike in the federal funds rate at its meeting on July 26th. Significantly, the Fed also kept the door remarkably open for further increases in 2023.
The Fed has been aggressively battling decades-high inflation since March of last year, with fast and furious hikes in 2022 that eased into more moderate increases in 2023. Last month’s hike pushed the cumulative increase to 5.25%, pushing up the rate of interest. interest on federal funds. to its highest level since 2001. This has created historic conditions for CD shoppers, as well as for anyone holding cash in a high-yield savings or money market account.
The Fed’s official announcement in July did not provide any strong signals on whether it would raise the benchmark interest rate higher this year. The written statement simply reiterated the Fed’s commitment to lower inflation to its target level of 2%.
In a speech at the Jackson Hole Economic Symposium on Friday, Federal Reserve Chairman Jerome Powell said more interest rate increases are on the table if inflation doesn’t fall enough in the coming months or if economic growth is too fast (which could force… upward pressure on inflation). .) He said the Fed could also keep the interest rate steady, and suggested that raising it too much would unnecessarily hurt the economy. The next Fed meeting is scheduled for September 19-20. Meanwhile, recent public statements from other Fed members suggest that they may be divided on the issue.
Currently, more than 80% of traders are betting that the Fed will hold interest rates steady at its September meeting, according to Fed Funds Futures odds published by CME Group. If the Fed bucks market expectations and chooses to raise interest rates by another 25 basis points, that would mark the 12th rate hike over the past 13 meetings, setting the benchmark interest rate to a range of 5.50% to 5.75%.
The Fed is likely to raise its benchmark interest rate in November or at a later meeting. Markets expect about a 60% chance of another rate hike before the end of the year.
Another hike by the Fed would certainly add more fuel to the fire for deposit rates. But if September’s decision is to hold rates, markets – and CD shoppers – can be left guessing whether this is a temporary or permanent pause. However, once the Fed appears ready to end its rate hike campaign for good, that would indicate that interest rates on certificates of deposit have likely peaked.
Note that the “high rates” listed here are the highest rates available nationally that Investopedia has determined in its daily search of hundreds of banks and credit unions. This is very different from the national average, which includes all banks that offer a CD with the term, including many large banks that pay so little interest. Thus, national rates are always very low, while the highest rates that you can find out by shopping around are often five, 10 or even 15 times higher.
Disclosure of the price collection methodology
Every business day, Investopedia tracks price data for more than 200 banks and credit unions that offer CDs to customers across the country and determines the daily ranking of the highest-paying certificates in each major quarter. To qualify for our listings, an institution must be federally insured (FDIC for banks, NCUA for credit unions), and the minimum initial CD deposit must not exceed $25,000.
Banks must be available in at least 40 states. While some credit unions require you to make a donation to a specific charity or association to become a member if you do not meet other eligibility criteria (for example, if you do not live in a certain area or work in a certain type of job), we exclude credit unions that meet the donation requirement It has $40 or more. To learn more about how to choose the best rates, read our full methodology.