CD Rates Climb to New Record in Every Term. Will They Go Even Higher?

CD rates have skyrocketed in 2023—yet they continue to charge higher. Today's release of new national averages from the FDIC shows that rates have increased across every single CD term. With returns already at record levels, does this party for CD shoppers have more room to run?

New CD Rate Averages Set Records in Every Term

In an effort to combat high post-pandemic inflation, the Federal Reserve has been aggressively hiking the federal funds rate since March 2022. With 11 increases across 12 meetings, the Fed has raised its benchmark rate a cumulative 5.25%. That's taken the fed funds rate beyond its 2006–2007 peak and to its highest level since 2001.

As a result, CD rates have surged in 2023. And today's release by the Federal Deposit Insurance Corporation (FDIC) shows they still have upward momentum, with rate averages rising for every single CD term last month. Also in every term that Investopedia tracks, the latest FDIC average is the highest on record since the FDIC began tracking averages in 2009.

Once again, the term with the highest average was 1-year CDs, a distinction the term has held since January 2023. But the biggest gainer this month was the 3-month average, which jumped almost a quarter percentage point.

But You Can Earn So Much More Than Average

While those rate gains are encouraging, keep in mind that you can easily earn 3-5 times more than these national averages by simply shopping around. While the averages are good indicators of rate trends over time, they are far below the rates you'll find in our daily ranking of the best nationwide CD rates.

Take, for instance, 1-year CD rates. The national average is an underwhelming 1.76% APY, while the best 1-year CD rate in the country is an eye-popping 5.75% APY—or 5.85% APY if you can stretch your deposit to $100,000 to buy a jumbo CD.

Will CD Rates Climb Even Higher?

It's definitely possible that CD rates could climb higher still. But it's hard to know at this time, since the Federal Reserve has not indicated yet—because it hasn't yet decided—whether it will implement another rate hike this year. Its next meeting will conclude on Sept. 20, and it will either announce a rate hold or another small rate increase.

Whatever it decides, there will still be two more Fed rate meetings in 2023, one in early November and one in mid-December. Because the central bank makes each of its rate decisions one-by-one and based on the latest economic data, any given meeting could result in a hike, a hold, or a decrease.

At the time of this writing, financial markets are placing only about 15% odds on a September rate hike from the Fed, with the probability climbing to 40%-45% for a November or December hike.

While that leaves the future fairly uncertain, we do know that if the Fed decides to make another rate increase, it will be for a minimal 0.25%. We also know from recent public comments made by Fed Board members that they do not see the rate-setting committee lowering rates until at least 2024.

That means we are most likely looking at a fed funds rate that stabilizes at its current level or slightly higher, which in turn means CD rates could edge up a bit as well. How much more they climb will be determined by whether or not there is another 2023 rate increase from the Fed.

Rate Collection Methodology Disclosure

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer money market, savings accounts, and CDs 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.

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.