Key Takeaways
- CDs are still paying historically high rates—but yields are expected to fall this year and beyond.
- Unlike a savings account, the rate on a CD is guaranteed and will not change no matter what the Federal Reserve does to interest rates.
- Now is a smart time to lock in one of today's high CD rates so you can enjoy it for a year or more down the road.
- You can score a rate of 5.00% to 5.56% APY with the best nationwide CDs that offer rate locks for one to three years.
- The Fed is expected to lower interest rates one or more times in 2024, which will push CD rates lower.
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Why Now Is a Great Time to Put Money in a Multi-Year CD
2023 was a historically remarkable year for certificate of deposit (CD) rates. Due to decades-high inflation, the Federal Reserve raised its federal funds rate 11 times over 12 meetings from March 2022 to July, resulting in the benchmark rate climbing a total of 5.25% over that 17-month period. Because bank and credit union deposit rates are directly impacted by the federal funds rate, yields on savings, money market, and CD accounts skyrocketed as well. For CDs, rates peaked last fall.
But the central bank signaled after its Jan. 31 meeting that it is almost certainly finished raising rates. While it implemented a fourth consecutive rate hold at that meeting, it indicated it has now moved to a phase of determining the right timing for rate cuts.
It's unknown when the Federal Reserve will implement the first of these decreases. Predictions have been moving later in the year due to jobs numbers that show the economy is still running hot and inflation is still above the Fed's 2% target. Nevertheless, markets are still pricing in rate cuts later this year. And the Fed's Dec. 13 "dot plot" report showed that Fed members were forecasting further rate reductions throughout 2025 and 2026.
For CDs, this means rates are expected to fall this year, and will likely continue falling for the coming one to two years. That's why locking in a CD rate today, while rates are still near their peak, is especially smart for terms of a year or more. By securing one of these multi-year rates, you can extend your high return for years down the road, while other products' rates are falling.
But it's best you don't delay. As soon as it appears clear the Fed is ready to make a rate cut, banks and credit unions will respond by lowering the CD rates they offer. And each additional rate decrease from the Fed will continue pushing CD yields lower. So time is of the essence to lock in one of these rates while they are still near their historic highs.
The Top CDs for Locking Your Rate Until 2025 to 2027
It's possible savings accounts could continue to pay their current peak rates for several more months. But the odds are low that rates on those accounts will be this high in a year, given the forecast of one or more rate cuts from the Federal Reserve in 2024. For this reason, we recommend choosing a CD that will guarantee today's rate for at least a year, if you can manage to live without those funds for that period.
If you can commit some of your funds for longer, you can score 5% or better for terms as long as 36 months. If opened soon, a 3-year CD would lock your rate until about the spring of 2027. That's a nice guarantee that provides long-term predictability. It will also prove to be a gift to your future self if interest rates fall throughout 2024, 2025, and 2026.
Below you'll find the nation-leading rates in each CD term from 1 year to 3 years.
| Best 1-Year CDs - Mature Early 2025 | APY | Term (months) | Minimum |
|---|---|---|---|
| Lafayette Federal Credit Union | 5.56% | 12 | $ 500 |
| TotalDirectBank | 5.50% | 12 | $ 25,000 |
| Vibrant Credit Union | 5.50% | 13 | $ 5 |
| Financial Resources Federal Credit Union | 5.43% | 13 | $ 500 |
| Best 18-Month CDs - Mature Later 2025 | APY | Term (months) | Minimum |
| XCEL Federal Credit Union | 5.45% | 18 | $ 500 |
| Fortera Credit Union | 5.35% | 18 | $ 1,000 |
| MTC Federal Credit Union | 5.25% | 15 | $ 5,000 |
| Technology Credit Union | 5.25% | 17 | $ 1,000 |
| Best 2-Year CDs - Mature 2026 | APY | Term (months) | Minimum |
| Pelican State Credit Union | 5.27% | 24 | $ 500 |
| XCEL Federal Credit Union | 5.25% | 24 | $ 500 |
| Credit Human | 5.20% | 18-23 | $ 500 |
| Lafayette Federal Credit Union | 5.20% | 24 | $ 500 |
| Best 3-Year CDs - Mature 2027 | Rate | Term (months) | Minimum |
| Lafayette Federal Credit Union | 5.10% | 36 | $ 500 |
| EFCU Financial | 5.00% | 30* | $ 500 |
| DollarSavingsDirect | 5.00% | 36 | $ 1,000 |
| Transportation Federal Credit Union | 5.00% | 36 | $ 1,000 |
Want more options? You can find our full daily ranking of the Top 15 rates in each term above at the following links:
- Today's Best 1-Year CD Rates
- Today's Best 18-Month CD Rates
- Today's Best 2-Year CD Rates
- Today's Best 3-Year CD Rates
Want to Lock in a High Rate for Even Longer?
Maybe 2027 isn't a long enough rate guarantee for you. In that case, you'll want to review our rankings of the best 4-year and 5-year CD rates. In times of flat or rising interest rates, these longer terms often pay the highest rates. But given today's environment, with current rates at near-record highs and expected to fall over the next two to three years, banks and credit unions are paying less on the longer terms, as it exposes them to today's rates far into the future.
Still, you can lock in a rate in the mid-4 % range for one of these longer periods. While less than the rates you can earn on terms up to three years, these 4% rates will be guaranteed for you until 2028 or 2029—when other interest rates are likely much lower.
Best High-Yield Savings Accounts of July 2024—Up to 5.55%
Best Money Market Account Rates for July 2024—Up to 5.35%
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
Federal Reserve Board. "Open Market Operations".
CME Group. "CME Fedwatch Tool."
Federal Reserve Board. "Summary of Economic Projections, December 13, 2023," Page 4.
