If you want to lock in one of today's record CD rates for months or years down the road, your smartest move is to shop around. It's also good idea to extend that search beyond banks in general. This is because the vast majority of today's highest-paying certificates of deposit (CDs) are offered by credit unions.
But before you think you that joining a credit union will be a hassle or that you won't qualify, keep reading, as the credit unions we include in our CD rankings are open to everyone and easy to join.
Who Pays the Highest CD Rates?
We make the rate-shopping step simple with our daily ranking of the best nationwide CDs. Our rankings across the various CD terms include dozens of bank and credit union options paying rates over 5.00%, in addition to institutions in the high 4% territory for long-term CDs.
But across the eight major terms we track, the industry-leading rate in seven of those terms is offered by a nationwide credit union. Only in the 3-month term is the market leader currently a bank.
As you can see below, the top rate across all CD terms is currently an eye-popping 5.65% APY, offered by a credit union. And in several terms, you can boost your rate by about a quarter percentage point, or possibly more, by going with a credit union rate leader.
While credit unions are strong rate contenders in almost every major CD term, you can see they're especially competitive against banks in the mid-range and longer-term CDs.
Our CD rankings are based solely on qualification criteria and then rates, not on who advertises with us or sponsors our content. To be eligible, the bank or credit union must be federally insured to protect you against institution failure. And it must be open to customers nationwide (defined as at least 40 states). Among the roughly 200 institutions that qualify, Investopedia monitors their rates every day to continually update our lists of the top 15 rates in every CD term.
Joining a Credit Union Is Easier Than You Think
When you hear "credit union," you may think of those local financial institutions that serve your community or that are open to those working for a large employer. But you may be surprised to learn that our research identified over 120 credit unions that allow customers anywhere in the U.S. to easily join and open online accounts—including CDs.
While it's true that credit unions differ from banks, in practical terms for customers, the differences are minor. The most notable distinction is that credit unions are owned and operated by their members and run as not-for-profit enterprises. As a result, they are accorded tax-exempt status.
All this means for you is that you'll be called a member instead of a customer, and you'll need to join the credit union's membership in order to bank there, which is simpler than it may sound. In fact, joining a new credit union and opening an account is often the same exact process—sometimes even using the same web interface—as opening an account at a new bank.
Note
Credit unions have come a long way in recent decades, with many of them providing a customer experience and online interface that's indistinguishable from that of a bank. In addition, most credit unions are "one-stop shop" institutions offering all the same types of accounts as banks, including auto loans, mortgages, and credit cards.
You will have to meet the credit union's eligibility requirements in order to join. One thing almost every credit union requires is that you keep a small deposit in a member savings account. This is typically just $5, and it will be returned to you if you later decide to end your membership.
Some credit unions also require you to make a one-time donation to a not-for-profit organization or foundation with which they are affiliated. But some credit unions will pay that donation on your behalf, at no cost to you. Even when there is a donation requirement, the amount is usually modest. (We only include credit unions whose required donation is under $40.)
Will CD Rates Climb Higher This Year?
CD rates a both credit unions and banks are already at record highs. That's thanks to the Federal Reserve's efforts since the spring of 2022 to combat decades-high inflation by raising the federal funds rate. Any time the central bank raises its benchmark rate, the rates that credit unions and banks are willing to pay customers for their deposits is pushed higher. Between March 2022 and May 2023, the Fed hiked the fed funds rate 10 times, for a cumulative increase of 5.00%.
Fortunately for savers, the Fed's upward pressure on rates doesn't appear to have run its course yet. Though the Fed opted to hold its benchmark rate steady at its June 14 meeting, financial markets overwhelmingly expect it will implement another 0.25% increase at its meeting concluding July 26, as measured by the CME Group's FedWatch Tool.
Not only that, but the Fed's report released after the June meeting showed that of 18 members' opinions on where the fed funds rate should be by the end of 2023, two-thirds (12 members) believe at least two more hikes will be necessary, meaning it's possible another hike will be announced sometime after the expected July increase.
Any Fed rate hike can be expected to nudge CD rates higher. But a couple of words of caution: First, any additional increases this year will almost certainly be small quarter-point movements, meaning their impact will be much subtler compared to the rapid rate of increases in 2022. Second, Fed rate moves are never entirely predictable, as they are always based on real-time economic data and financial news, which can change quickly.
The bottom line is that CD rates may indeed rise higher still this year. But if they do, the increases will probably be modest. It's also conceivable that the Fed will modify its course and keep rates steady, or it could end its hikes with a July increase. In that scenario, CD rates may already be at or very near their ultimate peak, making them an excellent buy right now.
For any cash you're not willing to commit to a CD, high-yield savings and money market accounts also provide excellent returns right now. Though the vast majority of these are offered by banks instead of credit unions, several options in our daily rankings of the best savings accounts and best money market accounts pay 5.00% or better. Just be aware that these accounts' rates are variable, meaning they can go down at any time, unlike the locked nature of a CD rate.
Rate Collection Methodology Disclosure
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD's minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. 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.
