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There are several advantageous features of a certificate of deposit (CD) accountespecially in today’s uncertain economic environment. CDs come with fixed interest rates that won’t change even if market conditions do. And those rates are exponentially higher than what savers are otherwise earning with traditional savings accounts right now. Savers will also rest assured knowing that their CD account is FDIC-insured up to $250,000, adding another layer of protection that many will find helpful right now. These accounts are also simple to find as online marketplaces now list rates, terms and banks all in one easy-to-navigate location.
That said, not every CD account will look the same. Rates will vary based on the termor length, of the account. And while that historically meant that long-term CDs, which matured in 18 months or longer, had better rates than short-term CDs that matured in a year or less, that relationship has been skewed a bit in recent years. With new data regarding inflation released this week, and with a new Federal Reserve meeting set for later in the month, now may be a good time for savers to evaluate their CD term options. But which CD term is best (or highest) right now? That’s what we’ll examine below.
See how much interest you could be earning with a high-rate CD account here.
Which CD term is best right now?
Shopping around for high CD interest rates is critical, as you won’t be able to pivot once you lock your money away without paying an early withdrawal fee. That being said, here are four of the highest rates savers can secure now, broken down into two categories, based on Bankrate data:
Short-term CD accounts
- 1-year CD at 4.11%: Savers can earn more than $4 with every $100 deposited into a top 1-year CD account now. That’s equivalent to $411 earned with a $10,000 deposit, and that money will be available next June, allowing you to pivot your savings strategy relatively quickly while still earning a big return in the interim.
- 6-month CD at 4.10%: Want to cut your term in half and earn a rate almost identical to the 1-year CD outlined above? A 6-month CD account at 4.10% offers that possibility right now. With $10,000 deposited, you’ll earn around $203 by mid-December, at which point you’ll have a better idea of where the economy stands and, more importantly, where you should store your money next.
Get started with a high-rate, short-term CD account now.
Long-term CD accounts
- 5-year CD at 4.20%: A 5-year CD account won’t be right for most or even many savers right now. But at 4.20% it comes with one of the highest rates available this June and, thanks to the extended interest-earning timeline, one of the biggest returns, too. A $10,000 deposit here will culminate in a return worth $2,283.97. That said, you’ll need to wait half a decade to access it, at which point you may have earned more with a high-yield savings account or even some strategic investments.
- 2-year CD at 4.16%: If you’re looking for protection for your money for the next two years only but still want to earn a competitive rate, consider this account now. At 4.16%, a $10,000 deposit will grow to $10,849.31 by June 2028. Just be confident in your ability to see the account through to its maturity dateas an early withdrawal fee here could be steeper than it would be with some short-term alternatives.
The bottom line
With inflation rising and the need for a safe and lucrative home for your money especially important now, savers should strongly consider their CD account options. The above four rates and terms represent some of the more attractive options, but this list is not exhaustive, and there are plenty of other accounts worth considering now. And with rates here likely to hold for the foreseeable future, savers can confidently take their time to shop around to find a rate and term that best suits their current situation.