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High-Yield CD Rates: Lock in Your Savings

The current certificate of deposit (CD) interest rates are at an all-time high, thanks to the Federal Reserve’s recent rate hikes. However, with the Fed’s recent rate cut, it’s essential to act fast to secure a competitive rate. CD rates vary significantly across financial institutions, making it crucial to shop around for the best deal.

Understanding CD Rates

Historically, longer-term CDs offered higher interest rates than shorter-term CDs. But in today’s economic climate, the opposite is true. Shorter-term CDs are currently offering the highest rates. As of December 22, 2024, the highest CD rate stands at 4.27% APY, offered by NexBank on its 1-year CD, with a minimum opening deposit of $25,000.

Top CD Rates from Verified Partners

Several banks are offering competitive CD rates, including Synchrony and Marcus by Goldman Sachs, both offering 4.25% APY on their 13-month and 1-year terms, respectively.

How CD Interest Works

The annual percentage rate (APY) determines the interest you can earn from a CD. APY takes into account the base interest rate and compounding frequency. For instance, a $1,000 investment in a 1-year CD at 1.88% APY would yield $18.96 in interest, bringing the total balance to $1,018.96. A higher APY of 5% would result in $51.16 in interest, bringing the total balance to $1,051.16.

Types of CDs: More Than Just Interest Rates

While interest rates are a crucial factor, they’re not the only consideration when choosing a CD. Different types of CDs offer unique benefits, often at the cost of a slightly lower interest rate.

• Bump-up CD: Allows you to request a higher interest rate if the bank’s rates increase during the term.
• No-penalty CD: Enables you to withdraw funds before maturity without incurring a penalty.
• Jumbo CD: Requires a higher minimum deposit, often offering higher interest rates in return.
• Brokered CD: Purchased through a brokerage, these CDs may offer higher rates or more flexible terms, but carry more risk and might not be FDIC-insured.

Explore Other Savings Options

If you’re searching for the best savings interest rates, money market account rates, or CD rates, we’ve got you covered. Learn more about these options and find the best deals for your savings needs.