Best CD rates today, Oct. 14: 11-month or 12-month at 4.40% APY? What the Fed’s September hike means for your pick

Rising interest rates are offering savers a fresh opportunity to earn stronger returns without taking market risks. Following a Federal Reserve rate hike in September, banks are adjusting their yields upward. The best certificate of deposit rate today is 4.40% APY. Capital One pays it on an 11-month CD. Marcus by Goldman Sachs pays it on a 12-month term. Most short-term CDs, from six to 12 months, sit between 4% and 4.5%.

Why banks are raising CD yields to 4.40% APY after the Fed’s hike

CD yields follow the federal funds rate. When the Fed raises its target, banks usually raise deposit rates. When it cuts, they cut.

Earlier this year, economists expected cuts. That changed in September. Inflation stayed stubborn, driven by higher energy prices and geopolitical uncertainty. The Fed raised rates instead, and banks and credit unions began lifting their CD yields.


One caution on the numbers. Averages are lower than the top offers. Many competitive CDs pay roughly 3% to 4%. The 4.40% rate is the best of the group, not what a typical saver will get at a typical bank.

What 4.40% actually pays

APY already includes compounding, so the math is simple. Put $10,000 in a 12-month CD at 4.40%, and you earn about $440 over the year. A CD at 3.50% earns about $350. That $90 gap is the cost of not shopping around.

Is a CD the right move?

It depends on three things.

The rate. A CD locks in today’s yield for the full term. That works well when rates are high or heading down. Right now they may rise again. A six- to 12-month CD keeps you from being stuck with a lower rate if that happens. A CD ladder offers the same flexibility. You split your money across several maturity dates, so some of it frees up regularly and can be reinvested at newer rates.

The goal. CDs are FDIC-insured up to the federal limit, so in most cases you can’t lose principal. That suits money you need to protect, such as a down payment or an emergency reserve beyond your daily cash. It suits retirement less. Over long periods, market investments have generally returned more.

The timing. Your money is locked up until the term ends. Pull it out early and you pay a penalty. If you might need the cash, a high-yield savings account is the safer fit, even at a slightly lower rate.

Don’t just accept your current bank’s offer. Large banks often pay less than their competitors, even when rates are high.

Online banks tend to lead on yield. They run without branches, which lowers costs, and they can pass some of that on as higher rates. Credit unions are worth checking too. They are not-for-profit cooperatives, so they often pay more and charge fewer fees. You may need to meet membership rules to join. Community banks can also beat the national chains on deposit rates, and they usually offer more personal service.

Compare the term, the APY, the minimum deposit and the early withdrawal penalty side by side. A rate that looks best on paper can lose its edge if the minimum is high or the penalty is steep.

Rates have turned up, and the top CDs now pay above 4%. Shorter terms leave room to move if the Fed keeps raising. Longer terms make sense only if you are comfortable with today’s rate for years.