What are today’s CD interest rates?
The Inverted Yield Curve Is Giving Savers an Unusual Window to Lock In High Rates
Bizeconanalysis.com – For most of modern financial history, longer-term deposits have paid more than shorter ones. That relationship has been broken since October 2022, and the disruption is creating a narrow but meaningful opportunity for everyday savers. Right now, a one-year certificate of deposit routinely outearns a five-year CD — a situation economists call an inverted yield curve. For anyone watching inflation erode the purchasing power of cash sitting idle in a checking account, this inversion represents a rare chance to capture elevated returns without committing funds for a decade.
Certificates of deposit remain one of the simplest fixed-income instruments available to retail investors. You deposit a set amount for a fixed term, earn a guaranteed annual percentage yield, and receive your principal plus interest at maturity. Unlike stocks or bonds, the return is known in advance. Unlike variable-rate savings accounts, the rate cannot be cut mid-term by the issuer. And unlike many higher-yield alternatives, CDs carry federal deposit insurance — FDIC coverage for bank-issued products and NCUA coverage for credit-union-issued products — protecting balances up to $250,000 per depositor, per institution, per ownership category.
Where the National Averages Stand
As of August 27, 2026, Bankrate’s compiled national averages for specific CD terms read as follows:
One-year CDs average 2.03% APY. Three-year CDs average 1.69% APY. Five-year CDs average 1.74% APY.
Those averages, however, mask a wide spread between the cheapest and most expensive products on the market. The gap between a below-average brick-and-mortar offering and a top-tier online bank rate can exceed two full percentage points for the same term length.
Top Available Rates by Term
Among the highest advertised APYs currently on offer, the following institutions lead their respective term categories:
Six-month CDs: Accordia Bank and Popular Direct both advertise 4.15% APY. E*TRADE by Morgan Stanley and Rising Bank list 4.05% APY. Synchrony Bank offers 4.00% APY.
One-year CDs: E*TRADE by Morgan Stanley tops the list at 4.40% APY. Popular Direct follows at 4.17% APY. CFG Bank, BTG Pactual Bank, and Accordia Bank each advertise 4.15% APY.
Three-year CDs: E*TRADE by Morgan Stanley leads at 4.35% APY. Sallie Mae offers 4.20% APY. TAB Bank and BTG Pactual both list 4.15% APY. CFG Bank advertises 4.05% APY.
Five-year CDs: E*TRADE by Morgan Stanley again leads at 4.35% APY. TAB Bank and Sallie Mae each offer 4.20% APY. BTG Pactual Bank and Quorum Federal Credit Union both advertise 4.15% APY.
Why Short-Term CDs Are Outperforming Long-Term Ones
The inversion is not a data glitch or a temporary anomaly. It reflects the Federal Reserve’s policy stance: short-term rates have been held elevated to combat inflation, while market expectations for future rate cuts push longer-term yields lower. The result is that the curve slopes downward rather than upward.
Donald F. Dempsey, CFP, founder of Dempsey Investment Management, explains the practical implication plainly:
“This means rates are highest for short term CDs and treasuries and actually are lower as you go out further in time.”
Dempsey notes that Bankrate’s own data confirms one-year CD yields have consistently surpassed five-year yields since October 2022. For a saver who wants both competitive yield and eventual liquidity, the inversion tilts the calculus toward shorter maturities.
Strategies for Capturing the Best Available Rate
Shop Online Banks Aggressively
The single largest factor separating a sub-average CD from a top-quartile CD is the type of institution issuing it. Online-only banks and the digital divisions of larger banks carry far lower overhead — no branch networks, fewer tellers, reduced real-estate costs. Those savings are passed through, at least partially, into higher deposit rates. Over the past several years, it has been online banks that have tracked Federal Reserve policy shifts most closely in their pricing.
By contrast, large national banks with thousands of physical branches — the institutions where many consumers keep their everyday checking accounts for ATM access and in-person service — frequently price CDs below the national average, sometimes near zero percent. If convenience of a local branch is not a hard requirement, the rate differential alone can justify opening an account with a digital-first bank solely for a CD.
Consider a Laddering Approach
Locking all savings into a single short-term CD leaves you exposed to reinvestment risk at maturity. Dempsey suggests a middle path:
“A practical approach could be to ladder your CDs. Buy some one year, some two years, some three years, etc.”
A ladder spreads maturities across multiple terms, ensuring a portion of your portfolio comes due each quarter or year. You capture today’s elevated short-term rates while retaining periodic access to liquidity, and you position yourself to roll into longer terms should the curve normalize.
Safety and Practical Considerations
Before committing funds, confirm the issuing institution holds valid FDIC or NCUA insurance and that your total deposits at that institution — across all account types and ownership categories — remain within the $250,000 insured limit. If you need to park more than that amount, splitting across multiple institutions or using joint-ownership structures can extend coverage.
Also weigh early-withdrawal penalties. Most CDs impose a fee of several months’ interest if you break the term before maturity. In an inverted-curve environment where short terms already pay well, that penalty becomes less of a concern than it would for a five-year lock-up.
The Practical Takeaway
The current rate environment offers something that has been absent for years: fixed-income yields that comfortably exceed the inflation rate, available through federally insured instruments with no market volatility. The inverted yield curve compresses the best available returns into shorter terms, which simultaneously reduces your lock-up risk. Comparing rates across online banks, selecting a term that matches your liquidity horizon, and structuring a ladder if you hold a meaningful balance are straightforward steps that can materially improve the trajectory of your savings over the next several years.
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