Boost Your Savings with Today’s Leading CD Rates: April 18 — Earn Up To 5.75% APY
The best CD rate today is offered by Farmers Insurance Federal Credit Union, established in 1936. They’re currently providing a 3-year Variable Rate Certificate with an APY of 5.75%. To get this rate, members need to start with a minimum deposit of $1,000. Keep reading to find out more top CD rates available today.
Key Points:
– Shoreham Bank offers the best 3-month CD rate at 5.50% APY.
– NexBank has the highest one-year CD rate at 5.40% APY.
– CD rates today are above the national average.
Top CD Rates Today:
– 3-month CD: 5.50% APY (National average: 1.25%) at Shoreham Bank
– 6-month CD: 5.55% APY (National average: 1.77%) at Newtek Bank
– 1-year CD: 5.40% APY (National average: 1.92%) at NexBank
– 18-month CD: 5.30% APY (National average: 1.83%) at Credit Human
– 2-year CD: 5.36% APY (National average: 1.69%) at Amboy Direct
– 3-year CD: 5.75% APY (National average: 1.60%) at Farmers Insurance Federal Credit Union
– 4-year CD: 4.70% APY (National average: 1.50%) at Credit Human
– 5-year CD: 4.55% APY (National average: 1.60%) at First Internet Bank
Rates are current as of April 18, 2024.
Quick Tip:
Consider inflation-protected CDs. Unlike traditional fixed-rate CDs, these have rates tied to inflation, meaning the interest rate can change over time. If inflation rises, so does the interest rate, helping to maintain the purchasing power of your savings. This type of CD can be a smart choice to protect your savings from inflation.
Top CD Rates from 2010 to 2024:
CD rates have changed significantly over the past decade. In the early 2010s, rates were quite low, around 0.42%, due to the 2008 financial crisis. Rates started to increase slightly by the mid-2010s but remained under 0.60% for longer-term CDs by the end of 2019. The major change happened from 2022 onwards, with rates now exceeding 5.00%. This surge is mainly due to the Federal Reserve’s actions to combat inflation and stabilize the economy. By December 2023, some banks offered rates of 5.30% or higher on 12-month CDs. Nowadays, investors can get much better returns on CDs than they could a few years ago, showing how important timing and market conditions are for maximizing savings and investments.
How CDs Work:
CDs are a type of savings account with a fixed interest rate and a set maturity date. When you open a CD, you agree not to withdraw your money until the term ends, which can range from a few months to several years. Early withdrawal usually incurs a penalty. Key points to know:
– CDs offer fixed interest rates for their term, making them a stable investment. Common terms include 3, 6, 12, and 18 months.
– CDs at banks are protected by the FDIC, and those at credit unions are protected by the NCUA, up to $250,000.
– CDs are safer compared to stocks and crypto, providing a secure place for your savings.
Pros of Opening a CD:
– Your earnings are guaranteed, so you know exactly what you’re getting.
– The interest rate on a fixed-rate CD won’t change, offering stability.
– It’s harder to dip into your savings, helping you save more effectively.
– CD investments at insured banks or credit unions are protected up to $250,000.
– CDs generally don’t have monthly maintenance fees.
Cons of Opening a CD:
– Withdrawing your money before the term ends means facing penalties.
– If interest rates rise, your CD’s rate stays the same, possibly missing out on higher earnings.
– The return on a CD might be lower than other investments like stocks or real estate.
– Automatic renewal features may lock you into a new term if you’re not careful at the end of your current term.
– Opening a CD may require a minimum deposit, which could be a challenge for those with modest sums.
Are CD Accounts Worth It?
If you want to save a lump sum for a large future purchase or investment, a CD is a low-risk option. However, if you aim to grow your money quickly, a CD might not be the best choice. Always consider your financial goals and consult a financial advisor to make the most informed decision.
Methodology:
GOBankingRates helps you navigate your finances. We choose the top CD rates by analyzing deposit rates from banks and credit unions with nationwide availability, focusing on annual percentage yield. Institutions listed are insured by the FDIC or the NCUA.