High interest rates have been a boon for savers willing to put their money with a credit union, smaller bank or an online bank they’ve maybe never heard of in order to chase the best rates. Every $1,000 locked up in a certificate of deposit for a year at current rates (as high as 5.75%) can earn nearly $60.
Such largess, however, hasn’t been available to customers of the biggest banks—until now.
While credit unions and digital banks still top our roundup of the very best CD rates, now even big banks are rolling out CDs with competitive interest rates, including some above 5%. While that’s nearly a percentage point lower than the top-yielding CDs, the convenience of being able to open a CD where you already bank, or at a bricks-and-mortar branch, might be worth the trade-off.
Savings in 12-month CDs are earning just 1.8% on average, according to FDIC data, so people looking to open a CD or who have one nearing maturity stand to do a lot better now. With big banks in on the action, there are few excuses for not having your cash in a CD with a higher yield.
The best megabank CD rates now
Here are the current top CD rates offered by the biggest traditional banks, which we’ve defined as banks that are among the top 10 by asset size as ranked by the Federal Reserve and that have consumer-facing branch networks.
- PNC Bank: 5.15%; 4-month term; $1,000 minimum
- Capital One: 5%; 12-month term; no minimum
- TD Bank: 5% (rate for checking account customers only); 6-month term; $250 minimum
- Bank of America: 5%; 7-month and 13-month terms; $1,000 minimum
- Wells Fargo: 4.75%; 4-month and 7-month terms; $5,000 minimum
- Citibank: 4.65%; 6-month term; $500 minimum
- U.S. Bank: 4.55%; 7-month term; $1,000 minimum
- Truist: 4.5%; 5-month term; $1,000 minimum
- Chase: 4.25%; 3-month term; $1,000 minimum
The best CD rates are generally for promotional CDs, often characterized by nonstandard maturity terms—think seven or eight months versus six months or a year.
While banks don’t have membership eligibility requirements, unlike credit unions, some of the big banks offering generous promotional CD rates right now reserve their top yields for customers who already have a banking relationship (such as a checking account) with them. If you plan to open a CD where you already bank, ask if they have preferred rates for existing customers.
You can also check bank websites or use an aggregator site such as DepositAccounts or CD Valet. CD specials might have a higher minimum balance than ordinary CDs, or rates might be tiered, with higher balances earning more. Check the terms and conditions with the bank directly, including the amount of the early withdrawal penalty the bank charges if you need to break the CD and access your money before the maturity date.
Why big bank CD rates are rising
Typically, the biggest banks don’t offer great interest rates on deposit products for a simple reason: They don’t have to.
Especially following the 2023 collapse of Silicon Valley Bank, depositors got spooked and yanked money out of smaller institutions, putting those dollars in megabanks instead. Within days of that failure, the biggest 25 banks pulled in $120 billion in new deposits, while deposits at smaller banks plunged by $108 billion over the same time frame.
“Big banks just didn’t have to pay up,” says Alexander Yokum, Charlottesville, Va.-based regional-bank analyst at financial research firm CFRA. "If you were getting deposits, why would you pay for them if you didn’t have to?”
Since then, though, that fear has receded, with smaller banks clawing back the deposits they lost and then some by wooing customers with higher rates. While megabanks aren’t as dependent as their smaller brethren on customer deposits, they’re under more pressure today to hang onto deposits and customers, so they’re bumping up their rates to be more competitive.
“Big banks are realizing, this is cutthroat, we’ve got to be aggressive, we have to compete,” says Jeffrey Roach, chief economist for wealth-management firm LPL Financial in Charlotte, N.C.
How long megabank CD rates will stay high
Cooling inflation has led many experts to expect rate cuts come September, but nothing is certain.
Combined with growing evidence that savers are willing to move their money to chase higher rates, big banks are recalibrating their strategies for keeping customers—and their dollars—from walking out the door through 2024 and beyond.
“At this point, we’re seeing rates stay fairly steady. I think this could last until heading into 2025,” Roach says. “I think things will be pretty attractive for those who are savers.”
Got a money question? Let Buy Side find the answer. Email [emailprotected].
Include your full name and location, and we may publish a response.
More on CDs
- Best 6-Month CD Rates
- Best 1-Year CD Rates
- Best 5-Year CD Rates
- What Is a CD Ladder and How Do You Build One?
Meet the contributor
Martha C. White
Martha C. White is a contributor to Buy Side from WSJ.
