Short-term certificates of deposit (CDs) continue to offer some of the best returns for savers. This provides an option to secure a higher interest rate before potential rate cuts by the Federal Reserve without necessarily locking up funds for an extended period. Nine of the highest APYs nationwide, provided by federally insured banks and credit unions, fall within a span of 3 to 13 months, offering rates from 4.32% to 4.45% APY. The market leader is the five-month CD from PenAir Credit Union, yielding 4.45% APY.
Given the expected Federal rate cuts on the horizon, the interest offered on these CDs may reduce soon. However, opening a CD now can lock in your rate and guarantee returns, irrespective of market fluctuations. Although short-term CDs are currently offering near-peak yields, these are predicted to decrease with successive rate cuts.
Even for longer commitments, competitive rates can be found on terms ranging up to 5 years. The top offers in these categories pay a minimum of 4.00% APY, allowing a robust return.
The anticipated quarter-point rate cut by the Federal Reserve at its Oct. 29 meeting is expected to be followed by another cut in December, suggesting lower CD yields are imminent. In light of this, it is advantageous to secure CDs at the current prevailing rates. Banks and credit unions may begin to reduce offers even before the official Fed decision.
Each business day, updated rankings with the best deposit rates are reported. These rankings are based on data research on hundreds of banks and credit union nationwide and highlight the most competitive rates, which are several times larger than the national average.