As of January 30, 2026, certificates of deposit (CDs) offer a stable and federally insured way to grow your money. The highest available annual percentage yield (APY) is currently 5.11% on a 12-month term from Daniels-Sheridan Federal Credit Union, requiring a $500 minimum deposit. This makes CDs an attractive option for those seeking predictable returns without taking on significant risk.
Why CD Rates Matter Now
CD rates are closely tied to the Federal Reserve’s monetary policy. When the Fed adjusts interest rates – as it did with three cuts in 2025 – banks typically follow suit. Higher federal funds rates translate to better CD yields, while cuts can cause them to decline. Inflation also influences these rates; banks may increase APYs to attract deposits during times of high inflation.
This is important because the current environment suggests rates may continue to fall slightly into early 2026, meaning now could be a good time to lock in a higher yield before they drop further.
Top CD Rates by Term (Jan. 30, 2026)
Here’s a snapshot of current rates across different terms:
- 2-Year CD: 4.20% APY (Mountain America Credit Union, $500 minimum)
- This CD is a straightforward option for steady growth without extra fees.
The national average CD rates rose sharply from mid-2022 through early 2024 as the Fed increased interest rates to fight inflation. Since then, three rate cuts in 2025 have caused CD rates to level off and slightly decline.
What to Consider Before Investing
Before committing to a CD, review these key factors:
- Early withdrawal penalties: Understand the fees if you need to access your funds before the term ends.
- Timeline: Choose a term that aligns with your financial goals (e.g., if you won’t need the money for two years, a 2-year CD makes sense).
- APY and compounding: Ensure you understand how often interest is calculated and added to your account.
- Insurance coverage: Verify the CD is insured by the FDIC or NCUA up to the standard limits.
CD Laddering: A Smart Strategy
For consistent returns without tying up all your cash, consider a CD ladder. This involves dividing your money across multiple CDs with staggered maturity dates. As each CD matures, you reinvest at the current best rate, maximizing your earnings while maintaining some liquidity.
“CD laddering allows you to benefit from higher rates on longer terms while keeping some funds accessible sooner.”
Final Thoughts
CDs remain a safe, low-risk way to grow your money. With minimum deposits as low as $500 and current APYs up to 5.11%, now is a good time to compare rates and consider locking one in before rates potentially decline further in 2026.
