Top CDs Today: Lock in a Rate of 5.27% or Better for Up to 2 Years (2024)

Where Are CD Rates Headed in 2024?

The Federal Reserve announced at its Jan. 31 meeting that it is maintaining rates at their current level, the fourth meeting in a row it's done so. To combat decades-high inflation, the Fed had aggressively hiked interest rates between March 2022 and July 2023, raising the federal funds rate to its highest level in 22 years.

This in turn created historically favorable conditions for CD shoppers, as well as for anyone holding cash in ahigh-yield savingsormoney market account. Rates on CDs continued rising to a peak this fall, reaching their highest levels in two decades.

But inflation has been cooling, putting the Fed in a holding pattern since July. The central bank also signaled after its January meeting that it was most likely finished with its rate-hike campaign. This means we've entered a new phase, where the Fed committee is focused on deciding the right timing to pull the trigger on a first rate cut.

Financial markets are currently forecasting more than one rate cut in 2024, according to the CME Group's FedWatch Tool, with a majority of traders believing the first cut will arrive by June. But what markets predict and what the Fed ultimately does may or may not align.

Indeed, Fed Chair Jerome Powell testified to Congress last week and indicated the rate-setting committee still thinks it's likely they will cut their benchmark rate this year. But his remarks also conveyed caution that predictions at this time are merely best guesses.

"The economic outlook is uncertain, and ongoing progress toward our 2% objective for inflation is not assured," Powell said in his prepared comments. "Reducing policy restraint too soon or too much could result in a reversal of progress we have seen."

Indeed, inflation is proving more stubborn than the Fed and most economists have been anticipating. Inflation data released today showed February's reading was higher than expected and slightly above January's reading, which itself came in ahead of expectations last month.

The Fed's next rate-setting meeting is next week, and the central bank will almost certainly announce another rate hold Wednesday. But this announcement will also come with the release of a new "dot plot" chart, which indicates how many rate cuts—if any—each Fed member expects we'll see by the end of 2024.

If the dot plot shows that central bankers still expect to make multiple rate cuts this year, CD rates would probably continue drifting gradually lower. But if instead next week's dot plot shows that rate cuts are far less certain by the end of 2024, then CD rates may plateau until it seems a Fed rate decrease is more forthcoming.

How We Find the Best CD Rates

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.