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July's Stellar CD Rates

There's hardly ever been a better time than July in the last 20 years to put money in a 澳洲幸运5官方开奖结果体彩网:certificate of deposit (CD). That's because you can earn historically high returns—topping out 澳洲幸运5官方开奖结果体彩网:between 5.00% and 6𝔉.00% in most CD terms—with virtually no risk or uncertainty. That's remarkable when you consider that at the start of 2022, the top nationwide CD rates ranged from just 0.50% to 1.50% APY.

The 2023 surge in CD rates was triggered by the 澳洲幸运5官方开奖结果体彩网:Federal Reserve's historic rate-hike campaign, aimed at tamping down post-pandemic inflation that had reached a 40-year high of 9.1% in June 2022. By raising the 澳洲幸运5官方开奖结果体彩网:federal funds rate 11 times between March 2022 and July 2023—to its highest level since 2000—the rates that banks and credit unions offered on savings accounts and CDs also skyrocketed.

Infla🌺tion, 𝄹the Fed, and Why July Is a Good Time for CDs

Interest rates on CDs are not directly related to 澳洲幸运5官方开奖结果体彩网:inflation. However, inflat𓂃ion levels influence the Federal Reserve and the federal funds rate, impacting the rates banks and credit unions offer for 🅺savings accounts and CDs.

Since July 2023, the Fed has been in a holding pattern, watching and waiting f🌳or inflation to fall closer to its 2% target before making further ratꩵe changes. While inflation has stubbornly persisted in the 3% range, the last two inflation readings provided encouraging hints that continued downward progress could be on the horizon.

Once the Fed feels confident that inflation is coming down sufficiently and reliably, it will consider making a first cut to the federal funds rate. And that day could be coming soon. While the CME Group's FedWatch Tool shows that less than 10% of federal funds futures traders currently expect the Fed to lower rates at its July 31 meeting, close to 70% are betting a rate cut will arrive by the Sept. 18 meeting.

For CDs, a decrease in rates is likely to happen before the actual Fed rate cut. That's because banks and credit unions generally don't wait until a Fed rate change is officially announced; they begin adjusting rates as soon as it's clear the Fed will lower rates at its next meeting.

This is why you should 澳洲幸运5官方开奖结果体彩网:consider opening a CD in July. We don't know how long 澳洲幸运5官方开奖结果体彩网:today's historically high CD rates will last. Rather than opening a CD when rates are falling, it 𓄧would be wise to secure one of today's elevated rates while you can. And if you can stretch to a long term, you'll lock in a guaranteed return for🎃 years into the future.

How Much Can You Earn in a CD in July?

Currently, you can earn as much as 6.00% with the top-paying CD in the country. Additionally, another dozen options pay 5.40% APY or better on terms up to 1 year.

If you can stretch your savings commitment longer, you can guarantee a CD rate as high as 5.10% APY for 2 years, or up to 5.00% APY for a 3-year term. Beyond that time frame, you can lock in an upper-4.00% rate for a term of 4 years or 5 years.

Advice for July CD Shoppers

Any🌄time ๊you consider opening a CD, consider these two important factors:

• How much you can deposit in the CD
• How long you can live without that money

Once you know your desired deposit amount and duration, you can search 澳洲幸运5官方开奖结果体彩网:our daily ran💃king of the best na💦tionwide CDs to find today's top-p♏aying options in any CD term.

A smart strategy is to decide what portion of your savings you'll keep in an easily accessible 澳洲幸运5官方开奖结果体彩网:high-yield savings account—so you havওe access to some of your funds should you need them in an emergency—and how much you can lock into a CD.

You can also consider splitting your CD money up into more than one certificate, perhaps with different terms, so that your money becomes accessible in phases (known as a 澳洲幸运5官方开奖结果体彩网:CD ladder). Or 👍you can open one CD immediately with some of your available money but then wait to invest the rest after watching rates for a while, perhaps after finding a CD deal that's new to the market.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts 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 depoꦍsit 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, 澳洲幸运5官方开奖结果体彩网:read our full methodology.