Best CD Rates Today, September 30, 2024: Don’t wait to lock in a high APY. Rates are falling

Interest rates on certificates of deposit remain high, despite the recent rate cut by the Federal Reserve. However, they have been declining for months, and the pace has increased since the Fed’s decision. That means now is the time to open a CD and lock in a high annual yield (APY) before interest rates drop further.

Today’s best CDs offer APYs as high as 5.10% – more than double national average for some terms. And your APY is locked in when you open it, so your earnings won’t drop even if interest rates continue to fall – which experts expect will happen in the coming weeks and months.

So the longer you wait, the lower APY you might find. With that in mind, read on to see where you can score one of the best APYs today.

Today’s best CD rates

These are some of today’s highest CD rates and how much you can earn by depositing $5,000 now:

Experts recommend comparing rates before opening a CD account to get the best APY possible. Enter your details below to get the best CNET affiliate rates for your region.

Why CD Rates Are Falling Fast

The Fed does not directly set CD rates, but its decisions do have a ripple effect. The Federal Funds Rate determines how much it costs banks to lend and borrow money from each other. So when the Fed raises this rate, banks typically increase APYs on consumer products like CDs and savings accounts to attract new customers and increase their cash flow. When interest rates increase, banks also decrease their APYs.

The Fed regularly adjusts the federal funds rate to keep the U.S. economy in check. When inflation is high, this rate is increased to discourage borrowing, reduce consumer spending, and lower prices.

Starting in March 2022, the central bank raised the federal funds rate 11 times to combat record inflation, and CD rates skyrocketed — as high as 5.65% APY for the best CDs we track at CNET. As inflation began to show signs of cooling, the Fed held rates steady eight times in a row starting in September 2023. APYs also remained largely stable.

But as inflation continued to cool and banks anticipated a Fed rate cut, they began cutting APYs over the term – slowly at first, then more rapidly since the Fed’s September 18 rate cut.

Here’s where CD rates stand at the beginning of this week compared to the beginning of last week:

And experts expect CD rates to continue to decline

“I expect the Fed will absolutely cut rates again this year,” said Noah Damsky, CFA, director of Marina Asset Advisors. “Not once, but several times. Interest rates could easily be half a percent lower by the end of the year. I wouldn’t be surprised if in December we are 0.75% or 1% lower than where we are now.”

That means time is of the essence. The longer you wait to open a CD, the lower your earning potential will likely be.

What you should pay attention to when choosing a CD

A competitive APY is important when comparing CD accounts, but it’s not the only thing you should look at. Also consider the following to find the right account for you:

• When you need your money: Early withdrawal penalties can eat into your interest income. So make sure you choose a term that fits your savings timeline. Alternatively, you can select 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 you narrow down your options.
• Costs: Maintenance and other costs can negatively impact your income. Many online banks do not charge fees because they have lower overhead costs than banks with physical branches. However, read the fine print of any account you evaluate.
• Federal deposit insurance: Make sure any bank or credit union you are considering 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 publisher websites. We evaluated the CD rates of more than 50 banks, credit unions and financial companies. We rate 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.