Best CD Rates Today, September 18, 2024: Fed Cuts Rates by 0.50% Expect CD Rate Cuts

Breaking News, 2:00 p.m. ET: The Federal Reserve cut interest rates by 0.50%. Experts predict CD rates will fall slightly.

You can still lock in rates as low as 5.10% with a certificate of deposit, but time is running out because the Federal Reserve cut the federal funds rate today. Historically, we’ve seen CD rates generally move in the same direction as the Fed raises or lowers rates. Following the announcement, banks could begin cutting rates in the coming days and weeks.

Today’s best CDs offer annual percentage yields as high as 5.10% – more than double the national average for some terms. APYs have seen small declines in recent weeks and are expected to fall further after the Fed meeting.

We don’t recommend waiting for interest rates to drop before investing in a CD. Here are today’s best APYs.

Read more: Borrowers and savers, listen up. Here’s why you should be worried about today’s rate cut

Today’s Best CD Rates

Here are some of the highest CD interest rates today and how much you can earn by depositing $5,000 now:

Experts recommend comparing rates before opening a CD account to get the best possible APY. Enter your information below to get the best rate from CNET’s partners for your area.

Why CD Rates May Change After Fed Decision

The Fed doesn’t set the CD rate directly, but its actions do have a domino effect. The Fed regularly adjusts the federal funds rate to stabilize the economy. When inflation is high — and it has been for years — the Fed raises the rate to discourage borrowing and reduce consumer spending in the hopes that this will drive down prices. The federal funds rate determines how much it costs banks to lend and borrow money to each other, so when the Fed raises the rate, banks typically raise the APYs on consumer products like CDs and savings accounts.

The Fed raised rates 11 times since March 2022 to combat skyrocketing inflation, and CD yields soared. As inflation began to cool, the Fed held rates steady eight times starting in September 2023, and APYs also remained largely flat.

In recent weeks, banks have been cutting APYs on CD terms in anticipation of a Fed rate cut this month. With the latest inflation report showing inflation approaching the Fed’s 2% target, all signs point to a cut when the Fed votes tomorrow. If that proves to be true, APYs are likely to continue falling.

Here’s where CD rates stand compared to last week:

“I think CD rates have been pricing in the possibility of a rate cut for some time now,” said Noah Damsky, CFA, director of Marina Wealth Advisors“A rate cut would validate the trajectory and likely result in further declines in CD rates going forward, pending more cuts.”

In other words, the sooner you open a CD, the higher your APY is likely to be.

What to look for when opening a CD

When comparing your CD options, a competitive APY is important. But it’s not the only thing you should consider. To find the right account for you, you should also consider these things:

• When you need your money: Early withdrawal penalties can eat into your interest earnings, so choose a term that fits your savings timeline. You can also opt for a no-penalty CD, although the APY may not be as high as a traditional CD with the same term.
• Minimum deposit requirement: Some CDs require a minimum amount to open an account — typically $500 to $1,000. Others don’t. How much money you need to put aside can help narrow down your options.
• Fees: Maintenance and other costs can eat into your earnings. Many online banks don’t charge fees because they have lower overhead costs than brick-and-mortar banks. However, read the fine print for any account you evaluate.
• Federal Deposit Insurance: Make sure any bank or credit union you consider is a member of the FDIC or NCUA so your money is protected if the bank goes bankrupt.
• Customer ratings and reviews: Visit sites like Trustpilot to see what customers are saying about the bank. You want a bank that is responsive, professional, and easy to work with.

Methodology

CNET rates CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We evaluate CDs based on APYs, product offerings, accessibility and customer service.

Current banks included in CNET’s weekly CD averages include Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MYSB Direct, Quontic, Rising Bank, Synchrony, EverBank, Popular Bank, First Internet Bank of Indiana, America First Federal Credit Union, CommunityWide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America and Connexus Credit Union.