National average interest rates for certificates of deposit (CDs) reached 1.99% APY for one-year terms and 1.72% APY for five-year terms as of July 9, 2026. Data from Bankrate indicates that top-tier accounts from specific financial institutions are currently offering yields significantly higher than these national averages, with some rates exceeding 4.00% APY.
A certificate of deposit is a savings account that holds a fixed amount of money for a fixed period, such as six months or five years, in exchange for a fixed interest rate. These accounts are generally protected by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) for balances up to $250,000. Investors typically use these vehicles to preserve buying power during periods of inflation.
According to Bankrate, several online banks are offering competitive rates that surpass the 1.99% national average for one-year terms. Popular Direct and E*TRADE by Morgan Stanley reported one-year APYs of 4.11% and 4.10%, respectively. In the five-year category, TAB Bank reported a yield of 4.20% APY, while BTG Pactual offered 4.15% APY. The source notes that online banks often provide higher rates than traditional institutions due to lower overhead costs associated with the lack of physical branches.
The current market exhibits an "inverted yield curve," a term used by Donald F. Dempsey, CFP, to describe an environment where short-term rates are higher than long-term rates. Bankrate reported that one-year CD yields have consistently surpassed five-year yields since October 2022. For a person managing their finances, this means they would notice higher returns on shorter commitments, such as six-month or one-year accounts, compared to locking their funds away for several years. This inversion may influence how individuals structure their savings, potentially leading them to "ladder" their CDs by purchasing multiple accounts with varying maturity dates.
This trend impacts the broader banking market by forcing traditional large banks to compete with online-only institutions that maintain higher yields to attract deposits. Savers will notice these differences in their monthly bank statements and the growth of their emergency funds or retirement savings. Looking ahead, the source suggests savers monitor Federal Reserve changes, as online bank rates have historically tracked with those adjustments. While specific upcoming dates for rate changes were not reported, the current high rates provide an opportunity for savers to lock in fixed returns for terms ranging from six months to five years.