10 of the highest-paying CDs of December 2023 (up to 6.5% APY)

But like with any form of savings product touting returns well in excess of the industry average, experts stress the importance of reading the fine print before opening an account. Here’s what to know about the CDs with the best annual percentage yield, or APY, in December 2023, and our top finds below.

Why have rates remained so high in 2023

By now, just about everyone who has considered opening a bank account has likely noticed savings rates are high — and have only continued to climb. Since this time last year, 12-month CDs have climbed to 1.85% APY on average through Nov. 20 from just 0.90% on Nov. 21, 2022, according to the Federal Deposit Insurance Corporation, or FDIC. Even shorter term CDs, such as those with 1- and 6-month terms, have respectively reached averages of 0.23% and 1.43% APY from as low as 0.10% and 0.52% last year, data show. (See some of the highest-yield CDs here.) For the top earning accounts, those return rates come in well above that average (more on that and our ranking below).

So what’s behind this dramatic rise in this short, 12-month period? Bankrate Washington bureau chief Mark Hamrick says it boils down to high inflation and the actions taken by the Federal Reserve to curb skyrocketing consumer prices. And Hamrick adds that “many financial institutions have sought to capture savings as individuals and households become increasingly aware of the opportunity to benefit from higher yields.”

To be sure, elevated inflation has indeed triggered steady benchmark rate hikes from the Fed over the past 12 months to 5.25%-5.5% from nearly zero a year ago. Because these rates have also pushed short-term Treasury bonds above 5%, debt obligations for many banks and credit unions have also become more costly. As a result, Hamrick says many financial institutions have responded by making savings products increasingly lucrative to new depositors with hopes of rolling them into their various accounts along the way and adding capital in the process. “This year’s surge in Treasury yields gave banks and other financial institutions cover to raise their yields,” he says. 

When is the right time to open an account?

Since many financial institutions subject depositors to early withdrawal penalties for taking out any of their principal balance and sometimes their earned interest before the predetermined maturity date, Hamrick says a close look at the fine print is always advised to know just what you’re getting yourself into before opening an account. If you’re worried about needing the money ahead of a CD maturity date, you might be better off with a high-yield savings account, for example. (You can see some of the highest-paying savings accounts here.)

“If one can be committed to a longer-term CD, this looks to be a good time to – as the saying goes – strike while the iron is hot,” Hamrick says. “The economy is widely expected to cool in the near and intermediate terms and financial markets participants think the Fed will be cutting rates in 2024. That suggests a longer-term CD might be a good choice for those looking to lock in these higher yields.”

If you’re looking for more liquidity and the ability to access your money without penalty, you may want to consider alternative forms of savings, says David Weinerman, managing director at Weinerman Wealth Management, a Summit Financial firm.

“An investor would consider high-yield savings and money market accounts for assets that need to be liquid,” Weinerman says. “For example, many banks are not paying a high rate of interest in their checking accounts, and thus investors could consider moving those funds to checking accounts that are paying an attractive rate of interest.” (You can see some of the highest-paying savings accounts here.)

10 of the best CDs rates of December 2023

Here are the 10 of the best deposit rates for CDs in December 2023. All of these accounts are protected by either the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA), unless otherwise noted. Because some financial institutions offer better rates than others, it’s critical to read all of the fine print before opening an account to learn about any potential restrictions or hurdles. 

Financial Partners Credit Union: 6.50% APY 

The 8-month special certificate at Financial Partners Credit Union stands as the top-earning CD this month. That said, it only applies to balances from $1,000 to $5,000 for new members in the counties of Los Angeles, Orange, Riverside, or San Diego; the city of South San Francisco; and the city of Alameda, California.

Bayer Heritage Federal Credit Union: 6.18% APY

Opening a 12-month certificate here earns an industry leading 6.183% APY. But before you think about joining this credit union, you’ll first have to open a savings account and become a member. That means either living, working, worshiping or attending school in a number of eligible counties in Ohio, West Virginia, South Carolina and Texas, or working for an eligible employee group or preferred business partner of the credit union. Also, like many credit union membership requirements, you may also join if you have an immediate family member who is already a member. 

Northeastern Connecticut Healthcare Credit Union: 6.17% APY

This month only, 5-month share certificates with new money to the credit union earn a high 6.17% APY. However, accounts here are only accessible to members employed or associated with select healthcare services in towns located in northeastern Connecticut. 

Empower Federal Credit Union: 6.00% APY 

For a shorter term option, those eligible for this credit union may consider a 3-month share certificate and its high 6.00% APY rate. Just be sure to meet the $500 balance minimum and become a member to get started. Membership here is restricted to those who live, worship or attend school in a select New York county, those who have an immediate family member or household member who is already a member, or to those who are employed or retired from one of several member companies. 

Travis Credit Union: 6.00% APY

The 4-month share certificate at this credit union comes in at a 6% APY. Just bring a minimum opening deposit of $500 and meet the credit union’s membership requirements. Membership here is only available to those who live, work, worship or attend school in a select number of counties in California, military or civilian personnel of Travis Air Force Base, or those who have immediate family members of current members. It should also be noted that deposits here are restricted to $50,000, so this may not work for everyone.

Complex Community Credit Union: 6.00% APY

Members who bring at least $500 of new money to the credit union may qualify for a high 6.00% APY with this 6-month share certificate. That said, this option does not auto renew and, like with all CDs, there are early withdrawal penalties to consider. You’ll also have to live, work, worship or attend school in a number of select counties in Texas or have a family member or roommate of an existing CCFCU member to join. 

Yolo Federal Credit Union: 6.00% APY

The special rate 6-month share certificate at Yolo Federal Credit Union pays a high 6.00% APY on deposits of $500 or more. To meet the eligibility requirements at this credit union, the fine print here states that you’ll only need to open a regular savings account to become a member. Minimum balance requirements for a saving account is only $1, with all tiers up to $100,000 minimum daily balances earning 0.03% APY, making this one of the most attainable options for an industry-leading rate. 

City Credit Union: 6.00% APY

CDs, Roth IRA and IRA Certificates with 12-month maturity dates and a minimum $1,000 balance earn a high 6.00% APY at City Credit Union. To join, and become eligible for these products and protection by the NCUA of up to $250,000, members here must live, work, worship or attend school in one of several select counties in Texas. If eligible, members here can also take part in free financial education and counseling.

Associated Credit Union: 5.90% APY

Open a 19-month CD with a minimum deposit of $500 and earn a promotional 5.90% APY at this credit union. Like most credit unions, though, you will have to become a member. To do so, you will need a valid Georgia driver’s license, work for a qualified employer in the state, or have a qualified family member who is already a member of the credit union. This one also renews in the form of a 24-month CD, so be sure to review your terms and rates after reaching the maturity date.

Dexsta Federal Credit Union: 5.90% APY

Regular certificates with 36-month maturity dates and balances of at least $1,000 are eligible for a high 5.90% APY. To become a member and open an account; you, a family member or member of your household must live, work, worship, volunteer or attend school in New Castle or Kent County Delaware, or in Cecil County, Maryland. If you meet those regional requirements, you’ll also need to make a $5 account deposit and bring two forms of identification along with proof of address to get started.