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High-Yield CD Rates: A Golden Opportunity

With the Federal Reserve’s recent rate cut, now is the perfect time to take advantage of today’s high-yield CD rates. After a decade of historically low rates, CDs are finally offering competitive returns, but this window of opportunity may not last long.

Understanding CD Rates

CD rates vary widely across financial institutions, making it crucial to shop around for the best deal. Historically, longer-term CDs offered higher interest rates, but in today’s economic climate, shorter-term CDs are yielding higher returns.

Top CD Rates Today

As of December 29, 2024, the highest CD rate stands at 4.25% APY, offered by Marcus by Goldman Sachs on its 1-year CD, with a minimum deposit of $500 required. Here are some of the best CD rates available today from our verified partners:

How CD Rates Work

The annual percentage rate (APY) determines the interest you can earn from a CD. This rate takes into account the base interest rate and compounding frequency (daily or monthly). For example, a $1,000 investment in a 1-year CD with 1.81% APY would yield $18.25 in interest, while a 4% APY CD would earn $40.74 in interest over the same period.

The Power of Compound Interest

The more you deposit in a CD, the more you stand to earn. A $10,000 investment in a 1-year CD at 4% APY would yield $407.42 in interest, bringing the total balance to $10,407.42.

Beyond Traditional CDs

While interest rate is a key consideration, it’s not the only factor to think about. There are various types of CDs that offer different benefits, often with slightly lower interest rates:

• Bump-up CD: Allows you to request a higher interest rate if your bank’s rates increase during the term.
• No-penalty CD: Enables you to withdraw funds before maturity without penalty.
• Jumbo CD: Requires a higher minimum deposit (usually $100,000 or more) and often offers higher interest rates.
• 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.

Exploring Other Savings Options

If you’re searching for top savings interest rates, money market account rates, or more information on CDs, we’ve got you covered. Learn more about these options and discover the best deals available today.