Key Takeaways
- The best nationwide CD rate of 6.00% APY, available from Nuvision Credit Union, is slated to expire on July 31.
- Below that top rate, the next-best CDs pay 5.50% or 5.51% on terms of 3 to 9 months—or 5.40% for up to a year.
- With the Fed appearing likely to cut interest rates this fall, the best CD returns are expected to drop. That makes a new 6% CD leader unlikely.
- But even a 5% CD is still smart because CD rates are guaranteed for their full term—no matter how many Fed rate cuts we see in 2024, 2025, and beyond.
- The sooner you act—and the longer the CD you can commit to—the better, as rates could fall soon and keep sliding for two to three years.
The full article continues below these offers from our partners.
One CD Is Paying 6%—But Not for Long
Since early June, the top of the CD rate chart has been graced with a 6.00% APY offer from Nuvision Credit Union. Available to anyone nationwide, Nuvision's certificate has a 10-month term, and is limited to a $5,000 maximum deposit.
But this promotional certificate's days appear to be numbered, with the offer's fine print saying the CD will be available until July 31, 2024. While it's not impossible Nuvision could choose to extend the offer, anyone interested in this CD shouldn't take any chances and should secure this CD by the end of the month.
The current runners-up show a noticeable drop-off below 6.00%. The next 11 best nationwide CDs pay 5.40% to 5.51% on terms ranging from 3 to 12 months.
Whether 6%, 5%, or Even 4%, It's Smart to Lock in While You Can
Due to a highly anticipated move by the Federal Reserve, CD rates are expected to drop before long. The Fed adjusts the federal funds rate to fight inflation, and the fed funds rate directly influences CD rates. Between March 2022 and July 2023, the Fed raised its benchmark rate 11 times, pushing it to its highest level in more than two decades. As a result, banks and credit unions raised their rates on savings accounts and certificates of deposit (CDs) to 20-year highs.
For the past year, the central bank has held the fed funds rate where it is as inflation has decreased considerably. But as inflation continues to cool, the Fed is soon expected to enter a phase of rate cuts. While financial markets overwhelmingly predict the Fed will hold rates steady one more time in its July 31 meeting announcement, it's widely forecasted the Fed will lower rates 0.25 percentage points on Sept. 18.
CD Rates Will Drop Before the Fed Rate Drops
If confidence in a Fed rate cut remains high as the September meeting draws closer, banks and credit unions will soon begin lowering their CD rates. Many likely won't wait for the official Fed announcement before they start making their move.
That means time is of the essence to lock in one of today's top CD rates while you can. Though rates are somewhat lower than they were in the fall and are soon expected to max out in the 5% range instead of 6%, the returns you can earn are still historically high. In the chart below, you can see how even today's below-peak rates are three to six times what you could earn with a CD just two and a half years ago.
The Longer You Can Commit Your Funds, the Better
Today's highest CD rates are currently available in terms of 12 months or less. But there's good reason to open a much longer CD. Even though multi-year CDs are currently paying lower annual percentage yields (APYs) than short-term certificates, the beauty of a CD is its rate guarantee. And the longer your guarantee, the longer you'll enjoy high interest payments, even when other interest rates are declining.
Though the future of the federal funds rate is never fully predictable, it's widely believed 2024 will just be the start of Fed's rate cuts. With the benchmark rate at its highest level in 20-plus years, but inflation now coming more under control, it's expected the central bank will take its foot significantly off the rates pedal.
After the Fed met on June 12, it released its quarterly “dot plot” projections for where the federal funds rate would be at the end of 2024, 2025, and 2026. You can see in the chart below that, as of the June meeting, Fed committee members predicted the benchmark rate would be lowered by more than 2 percentage points over the next two and a half years.
Time will tell if this progression of rate cuts comes to pass. But it's a reasonable expectation right now, making today's rates an attractive option to lock in. With a 4%–5% CD of at least 18 months, or extending as long as 5 years, you can guarantee you'll enjoy one of today's high CD rates potentially as long as 2029.
Best CD Rates for July 2024: Up to 6.00% APY
Best High-Yield Savings Accounts for July 2024—Up to 5.55%
Best Money Market Account Rates for July 2024—Up to 5.35%
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
