Best CD rates of June 2024
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BLUEPRINT
Updated 11:43 a.m. UTC June 27, 2024
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Sallie Mae offers the best range of CD rates in 2024, according to our exhaustive analysis of hundreds of banks. It earned the top rating of 4.8 stars thanks to its high yields and low fees, though its minimum balance requirement can be tough for new savers.
Annual percentage yields (APYs) and account details are accurate as of June 27, 2024.
Summary of the highest CD rates this week
| NAME | STAR RATING | APY ON ONE-YEAR CDS | APY ON THREE-YEAR CDS | MIN. DEPOSIT | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 4.8 | 5.15% | 4.00% | $2,500 | |||||||
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| 4.7 | 5.30% | 3.98% | $5,000 | |||||||
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| 4.6 | 5.25% | 4.25% | $1,500 | |||||||
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| 4.6 | 5.05% | 4.60% | $1,000 | |||||||
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| 4.6 | 4.25% | 3.75% | $500 | |||||||
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| 4.6 | 4.80% | 4.15% | $0 | |||||||
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| 4.6 | 4.00% | 3.40% | $1,000 | |||||||
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| 4.5 | 4.70% | 3.75% | $2,500 | |||||||
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| 4.4 | 5.00% | 3.50% | $0 | |||||||
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| 4.4 | 5.15% | 4.15% | $500 | |||||||
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| 4.4 | 5.00% | 4.00% | $0 | |||||||
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| 4.4 | 4.80% | N/A | $1,000 | |||||||
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Why trust our banking experts
Our team of experts evaluates hundreds of banking products and analyzes thousands of data points to help you find some of the highest certificates of deposit rates today. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 140 CDs from 84+ financial institutions reviewed.
- 4 levels of fact-checking.
- 50+ data points analyzed.
Top CD rates of June 2024
Marcus by Goldman Sachs High-Yield certificates of deposit
Capital One 360 certificates of deposit
HSBC Bank Online certificates of deposit
Methodology
CDs used to play a significant, albeit complementary, role in the finances of everyday Americans. Roughly a fifth of households owned a CD in 1989, according to the Fed. They were still in vogue nearly two decades later, as more than 16% used them in 2007.
In 2019, however, only 7.7% of households had a CD.
The reason? CDs used to be a much better deal. At the beginning of 1989, for instance, a one-year CD offered an 8.30% APY. By 2007, it was just 3.7%.
By 2019, a one-year CD paid just 0.92%.
The story behind drooping CD rates is complicated, and it involves: falling inflation (until recently), an aging population, technological innovations and the Federal Reserve lowering interest rates. The aftermath of the Great Recession, in which the Fed kept interest rates near zero for almost a decade as inflation continually ran under its desired level, is just the most recent trend.
That’s what has made the current moment so interesting. CD yields jumped in 2022 and 2023 after the Fed raised rates, but have leveled off in 2024.
The upshot, though, is the same: Americans are more likely to consider CDs if they pay more in interest, especially compared to inflation. After all, a one-year CD that pays less than 1% is hardly worth it when prices are rising at twice as high a rate.
We took this historical lesson to heart when crafting our ratings, as you can see below:
- APY: 70%.
- Customer experience: 10%.
- Minimum deposit: 5%.
- Compound interest schedule: 5%.
- Digital experience: 5%.
- Available terms: 3%.
- Availability: 2%.
We looked at the terms of 144 CDs offered by 84 banks and credit unions to reach our rankings. In each category we looked at a variety of factors.
For instance, to determine APY, we documented the interest rate offered on 17 different terms. To rank customer service, we documented how the financial institutions were reviewed on the Trustpilot and the Better Business Bureau.
Additionally, we valued accounts with lower minimum deposits, daily compound interest schedules (rather than monthly) and those that are available to everyone, regardless of where they live.
While non-APY factors are important, your potential earnings should reign supreme.
Latest CD rate news
Eventually the Federal Reserve will stop the CD yield party, but it won't be now.
Recent events have caused market participants to believe that the Fed will be slower to raise interest rates this year than previously predicted thanks largely to prices still rising too quickly.
Take recent inflation reports. The Fed's preferred gauge, the so-called core PCE report, showed prices 2.7% higher in April than the year prior. Meanwhile the consumer price index (CPI) showed prices rising 3.3% over the previous 12 months, driven recently by increasing shelter and food away from home (i.e. restaurant) costs.
Recent inflation and growth data will probably keep the Fed on hold. We still think one cut in December is a reasonable base. Risk would be further data on a slowdown in consumer or labor market that pushes them to move earlier in July. That does not seem likely or warranted at this point. Investors should be happy the Fed can take their time.
Both reports follow conflicting economic news.
The May jobs report showed a humming economy, with employers adding 272,000 jobs, while the unemployment rate was just 4%. However, the economy grew at an annual rate of 1.6%, after accounting for seasonal factors and inflation, below analysts' expectations.
Still, high prices and a strong jobs market are hardly the key ingredients for the Fed when it is trying to slash rates.
"Recent inflation and growth data will probably keep the Fed on hold," said Scott Helfstein, head of investment strategy at Global X. "We still think one cut in December is a reasonable base."
Following the Federal Open Market Committee meeting that ended June 12, the Fed held rates steady at 5.25% to 5.50% and made it clear that it will only cut rates once inflation gets closer to its preferred level.
That might be a while. Wells Fargo Securities believes that the Fed will not cut rates until September, at the earliest.
Read more: The best high-yield savings accounts
"The labor market is going pretty strong, and the rate of inflation has come way down, though it's still above the Fed's 2% target," said Allison Kaminaga, professor at Bryant University. "The Fed can afford to be patient."
When rate cuts do indeed begin, you can expect many banks to respond by lowering CD yields.
National average interest rates for CDs
Here are the national deposit rates as of June 17, 2024, according to the Federal Deposit Insurance Corporation (FDIC).
| CD TERM | NATIONAL DEPOSIT RATE |
|---|---|
1 month CD
| 0.23%
|
3 month CD
| 1.53%
|
6 month CD
| 1.81%
|
12 month CD
| 1.86%
|
24 month CD
| 1.57%
|
36 month CD
| 1.44%
|
48 month CD
| 1.36%
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60 month CD
| 1.43%
|
Will rates rise in 2024?
In short, CD rates have plateaued and are expected to fall in 2024, so it might be best to open one soon.
CD rates tend to rise and fall with the federal funds rate, which is set by the Federal Reserve. The Fed makes rate changes in an effort to grow or suppress the economy, depending on what’s going on with inflation. Increasing the federal funds rate makes borrowing more expensive, thereby limiting economic activity.
Savers suffered through low interest rates for more than a decade following the Great Recession, but enjoyed a rapid rise in yields as the Fed made efforts to snuff out decades-high inflation caused by the COVID-19 pandemic.
The average three-month CD yield rose from 0.06%, near-nothing, in December 2021 to 1.53% in May 2024 according to the FDIC, with the most competitive rates on that term topping 5.50% in May.
Quick tip: While savings and money market accounts have greater liquidity than CDs, you’ll typically receive a lower interest rate that isn’t guaranteed for a specific period of time.
The stint of rate hikes appear to have subdued the worst of inflation as prices have returned to more normal inflation levels. Federal Reserve Chair, Jerome Powell, remains cautious, however.
“Powell continues to stress that the Fed is committed to getting inflation down,” said Nancy Davis, founder of Quadratic Capital Management, based in Greenwich, Conn.
Learn more: See our CD rate forecast
Six tips to pick the best CD term and rate
1. Prioritize rates. The main purpose of investing is to earn money. Research the highest CD rates available, which are typically offered by online banks and credit unions.
2. Consider time. How long are you willing to lock away your funds? Can you afford to hand over a bundle of your cash for six months? One year? 10 years? Make sure you have a fully-financed emergency fund before you consider a CD.
3. Look at withdrawal allowances. Are you able to take regular interest payments? And, if you need to, can you make an early withdrawal? If so, what would the early withdrawal penalty be? Ideally you’d want to opt for a CD that charges little in the way of fees.
Quick tip: If you’re concerned about having cash on hand, consider a no-penalty CD. While rates are typically lower, you won’t be penalized if you need to access your cash.
4. Check requirements and insurance. Make sure you can meet the requirements, such as a minimum balance and check that the provider is covered by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), which guarantee funds up to $250,000 for each depositor at each covered institution.
5. See CD types. If traditional CDs aren’t meeting your needs, look up other types. No-penalty CDs allow you to make fee-free withdrawals; add-on CDs typically have low minimum requirements and allow you to increase your principal over time.
6. Compare CDs. With a list of final contenders, compare your options. If you’re waffling between different terms, use a CD calculator to see exactly how much each would yield.
Pros and cons of CDs
| Pros | Cons |
|---|---|
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Pros
- Guaranteed rate. Tying up your cash for months or years means you'll earn a guaranteed yield for that period. A one-year CD yielding 5% will pay that 5% for an entire year, even if interest rates drop.
- Deposit insurance. In case the bank or credit union fails, your deposits are insured for up to $250,000 per depositor, per insured institution, and per account ownership type (think joint vs. individual).
- Plentiful terms and types. There’s a wild range of CD terms, from a matter of days to a decade. Some types allow you to add to your account during the term, while others allow free early withdrawals.
- Separated savings. Because your money is tied up, you’re not likely to spend it accidentally. You would have to access the separate account, make the withdrawal, pay the fee and close the CD to get the cash.
- Interest payments. Many CD providers allow you to take monthly, quarterly or yearly payments of the interest your CD has earned. You can have guaranteed, regular income from your savings without reducing your principal.
Cons
- Less flexibility. To gain the high yield of a CD, you'll have to sacrifice access to your cash during the CD term. If an emergency arises, you won't be able to dip into the cookie jar without paying a fee. In some cases, if your CD hasn’t earned enough interest to cover the fee, your principal can be reduced.
- Minimum deposit requirements. Most banks require you to put up a minimum requirement to open an account. Sometimes it’s affordable ($500), while sometimes it’s less so ($5,000). Jumbo CDs, true to their name, frequently require amounts of $100,000. Though there are some banks that have no requirement at all.
- No principal increase. Once you open a CD, you typically can’t add to it. If you want to invest more cash into a CD, you’d need to open another one.
- No rate jumps. The downside of receiving a guaranteed interest rate for a set term is that you won’t benefit if interest rates on other CDs increase.
- Automatic renewals. Many CD providers send a reminder email 30 days before the CD matures. Still, if you don’t pull your CD funds out within 10 days after the term ends, the CD typically automatically renews for the same term at whatever the going rate is.
Is a CD right for your savings goals?
A CD can be a wonderful tool when you’re saving up for a specific goal.
Let's say you want to spend $3,000 on a family vacation next year. By putting that amount into a one-year CD, you'll earn some interest and protect yourself from spending that cash on other things.
CDs can also be a conservative part of your overall investment strategy. Many savers move more of their cash into less risky investments, such as CDs, as they near retirement.
Still, CDs aren’t right for every type of savings goal. They should be a part of — not the entirety of — your savings because balancing their pros and cons is vital.
“For emergency savings and some short-term goals, a high-yield savings account is preferable,” said Jason Sohnen, certified financial planner and director at OneEleven Financial Wellness. “When you save with a CD, you are locking up your money for a set period of time.”That doesn’t translate well to making withdrawals in an emergency or for the occasional splurge. A traditional, high-yield savings account or a money market account are all options that could better serve that purpose.
Quick tip: Money market accounts typically have high yields and still allow for debit-card access.
Alternatives to certificates of deposit
If you’ve got some funds that you want to put to work earning a yield, here are some other options.
- Get a high-yield savings account. Most high-yield savings accounts worth their salt have rates competitive with CDs today, so you won’t miss out on yield (at least, to start). You’ll have the bonus of being able to withdraw from and add to your savings without penalty. The biggest con, however, is that savings account rates rise and fall with economic forces. Unlike in a CD, the yield isn’t guaranteed.
- Consider a checking account that pays interest. The best high-yield checking accounts allow you to earn a solid return on your savings, while giving you access to your cash at any time. While you won’t earn as much as with a CD, they’ll redound to your financial benefit.
- Pay off debt. Depending on the interest rate and the size of your debt, you may be better off reducing your debt rather than saving. Paying down high-interest loans can make a big difference in your bottom line.
Frequently asked questions (FAQs)
After you select a CD term from a bank, credit union or brokerage, look at whether you can open it online or if you must go in person to a branch or make a phone call. Most financial institutions allow you to open one online.
When you click, visit or call, you must establish your account (if you don’t already have one at that financial institution) by providing your name, date of birth, address and other personal information. Once you’ve logged in or proven your identity, you can select the CD you want, open it and fund it, at this point, the CD will be set and you’ll be good to go.
Savings accounts allow you to make deposits whenever you want, as well as make withdrawals without penalty. They have no term limit, but you’re not guaranteed a particular interest rate. By contrast, traditional CDs require you to lock away a set amount of money for a set amount of time. If you can make a withdrawal at all, you almost always have to pay a financial penalty for doing so. The trade-off is that CDs generally have higher yields; however, high-yield savings accounts can be competitive.
It can be difficult to make the case for long-term CDs when you can find higher yields on shorter-term options. Still, current long-term CD yields are much higher than a few years ago, and will likely go down in the near future when the Fed cuts interest rates. By locking in the rate now, you’ll reap a comparatively high return for a long period of time.
The interest you earn on one is taxed as regular income. The tax applies when you receive the income from your CD — whether you take regular interest payments or wait until it matures. You must pay taxes on the yield even if you renew the CD or roll it over into another deposit.
If you earn more than $10, you’ll get a tax form from the CD provider. If the CD is at a brokerage or a bank, you’ll get the IRS Form 1099-INT. If it’s at a credit union, you’ll get IRS Form 1099-DIV.
When a CD matures, you have a grace period (typically a week or so) to either renew the CD term or withdraw the funds entirely. Many CDs automatically renew unless you withdraw them.
A CD ladder is a savings strategy in which you invest in multiple CDs of different terms. The idea is to lock in high rates while maintaining liquidity. As the various terms mature, you can reinvest the funds.
Editor’s Note: This article contains updated information from previously published stories:
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.