The number of CD options paying 5.50% or more has increased to 30, double the number available at the beginning of August, with the highest rate being 5.85% APY on a jumbo certificate.
Interest rates on CDs are currently high, and with the expectation of further rate increases, it may be advantageous to open a CD now to secure a higher rate, although there is a risk that rates could go higher or that you may need access to the funds before the CD term ends, in which case a high-yield savings account may be a better option.
Not all CDs are created equal, as today's top CDs offer rates nearly four times higher than the national average, allowing investors to maximize their returns and get the most for their savings.
Alabama Credit Union now offers the best 18-month CD rate of 5.66% APY, surpassing the previous top rate of 5.55% APY, as the overall leading rate for the best nationwide CDs reached 6.00% APY.
Summary: The author reflects on their poor experience trading stocks during the pandemic and highlights three reasons why they are happier with their decision to invest in CDs with a 5% APY.
Banks and credit unions are competing for customer dollars in the current high-rate environment, offering high-yield savings accounts and CDs with attractive rates, such as CloudBank 24/7 High Yield Savings Account with an APY of 5.26% and Western Alliance Bank 1 Year CD with an APY of 5.51%.
The number of nationwide CDs paying at least 5.50% APY has decreased to 45 options, but the top rate remains at 6.00% APY for a 1-year term, and the leading jumbo certificate offers 5.85% APY on a 170-day option.
First Harvest Credit Union has taken the top spot for 18-month CDs, offering a rate of 5.75% APY for a 15-month term, while American 1 Credit Union continues to offer the leading nationwide rate of 6.00% APY for 12 months.
Despite the current rise in interest rates, experts predict that CD rates will remain relatively stable in 2023, with the possibility of a slight increase, but a downward trend is expected for 2024.
Interest rates on CDs are currently high, making it a good time to deposit money into one for the higher returns and the predictability and protection they offer compared to regular savings accounts.
USAlliance Financial is now offering a 6-month CD with a competitive rate of 5.75% APY, joining five other CDs with the same rate, but with different durations ranging from nine to 15 months.
Despite a six-way tie for the leading rate on nationally available CDs at 5.75% APY, the number of options in the elite group has grown to 16, with the addition of a new 12-month CD from CFG Bank, while the probability of a Fed rate hike in November or December is estimated to be 30-40%.
The Federal Savings Bank now offers a 5.80% APY on a 1-year certificate, surpassing the previous industry-leading rate of 5.75% APY, while the top rate for 2-year CDs has decreased from 5.55% to 5.50% APY.
Opening a CD now can allow savers to earn a higher interest rate before inflation drops and interest rates decrease.
The FDIC's latest release of national averages shows that while CD rates have been on a meteoric rise for the past 18 months, the climb may be slowing, with some terms experiencing slight declines while others continue to rise.
Despite the Federal Reserve's decision to maintain interest rates, banks and credit unions are still increasing the rates offered on certificates of deposit (CDs), with the number of nationally available CDs offering rates of 5.65% or higher rising from 15 to 21 in just one week.
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