Want to lock in an attractive and safe return on your cash? Certificates of deposit still offer one of the best ways to earn a high yield for a guaranteed term, just don’t wait as rates could fall further soon.
The Federal Reserve has held its key rate steady since last September as inflation cools down, and some analysts believe the Fed might cut rates again later this year. While plenty of Americans would love to see lower interest rates—home buyers especially—that would also mean lower CD yields.
The three Fed rate cuts last year had a near-immediate impact on CD yields, with top rates on 12-month CDs quickly dropping from around 6% to below 5%. Declines like this are why savvy savers should consider locking in current rates now.
The best CD rate available this week is a 3-month certificate at Bask Bank, offering a 4.65% APY. Most of the rest of the best are for terms of less than one year—reflecting uncertainty about the direction of rates over the longer term.
View this interactive chart on Fortune.com
The five top CDs this week, ranked by term length
Getting the best possible yield for your preferred term is the most important consideration when shopping for a new CD, but it’s not the only factor. You should also keep an eye on minimum deposit requirements and any fine print—some institutions require you to also open a savings account to get their highest rates, for example.
Fortune has partnered with banking data firm Curinos to give a read on the best CD rates on the market this week. We only list CDs that can be opened online regardless of your location, no memberships or in-person branch visits required.
Best 3-month CD: 4.65% APY at Bask Bank
Kicking off this week’s list is a certificate that has been holding strong at the top of our ranking of the best rates. The 3-month CD from Bask Bank offers a strong 4.65% APY and only requires a $1,000 minimum deposit. For a short-term savings boost this is one of the best deals around; as you’ll see in the table below, few APYs for this term length come close.
View this interactive chart on Fortune.com
Best 6-month CD: 4.51% APY at CIBC Agility
If you don’t have $1,000 to put away right now but still want a high APY, the 6-month CD from CIBC Agility currently has a 4.51% APY that only requires a $50 minimum deposit.
View this interactive chart on Fortune.com
Best 1-year CD: 4.50% APY at Prime Alliance Bank
We’ve got a tie for the top 1-year APY, but we’re going to give the win to Prime Alliance Bank for their much lower $500 minimum deposit requirement. The 4.50% APY on its 12-month CD is a great rate to lock in before CD rates potentially take a tumble later this year.
View this interactive chart on Fortune.com
Best 3-year CD: 4.10% APY at Merrick Bank
This one’s for investors who are ready to sock away a decent chunk of change for a while: You can get a 4.10% APY on a 3-year CD from Merrick Bank, but you’ll have to pony up a whopping $25,000 to do so. That’s no small feat, and investors with that sort of money to throw around are likely to look for alternative means.
If you do want to tie up some money for a longer period of time, First National Bank of America offers a very respectable 4.10% APY with a far lower barrier of entry (just $1,000).
View this interactive chart on Fortune.com
Best 5-year CD: 4.15% APY at Synchrony Bank
A 5-year CD means you’re looking to lock in high rates for the long haul, and Synchrony can be a great place to do so. There’s no minimum deposit requirement, so you can stash away as much or as little as you’d like here. And the 4.15% APY guarantees you strong returns for the next several years even as the economy shifts.
View this interactive chart on Fortune.com
What you should know about CDs
Sure, CDs aren’t the best choice for everyone, but they are particularly attractive to risk-averse investors who crave stability and predictability. They’re a great choice for people with short-term financial goals or who are nearing retirement, providing a reliable vehicle to accumulate cash steadily until it's needed.
“The main reason to think before investing in a CD is because of how they function: funds in CD are locked up—they typically have a penalty for withdrawing early,” says Alex Michalka, Ph.D., vice president of Investment Research at Wealthfront. “This can allow you to earn more than you would in a cash account, but you should also consider your potential needs for liquidity.”
Michalka reminds anyone considering a CD investment to pay close attention to their goals—and advises people not to tie up funds they might need access to.
“What if your ideal home becomes available in nine months, and you can’t access your savings for the down payment? High interest rates are wonderful, as long as you still have access to the cash you need when you need it,” he says.
Keep in mind that interest earned from CDs is taxable and must be reported on Form 1099-INT if it exceeds $10 annually. Early withdrawals from CDs incur penalties, which are also reported on your tax form.
CDs are insured by the Federal Deposit Insurance Corp. (FDIC), up to $250,000 per customer account, per institution. FDIC backing secures your funds in the unlikely event of a bank failure. If you opt for a CD from a credit union, verify that it is insured by the National Credit Union Administration (NCUA), which insures deposit accounts at credit unions.
