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Here’s how far CD rates have dropped this year (and why you should still open one)
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Certificates of deposit (CDs) have long been a favored savings tool for those seeking safety and predictability in their investments. These interest-bearing accounts have been even more popular in recent years though as the high-rate environment offered savers an enticing opportunity to earn big interest on the money they deposited. But the economic environment is shifting now that inflation is cooling and the Federal Reserve has slashed its benchmark rate twice in response, which has led CD rates to experience a decline.
Even with this downward trend, though, CDs continue to offer compelling returns compared to historical averages, particularly when measured against the near-zero rates that characterized much of the previous decade. For perspective, it’s still easy to find CD rates above 4% right now, but savers were fortunate to find CD rates above 1% as recently as 2021, making today’s rates notably attractive even after recent declines. When you factor in the other benefits of investing in a CD, like getting a fixed, locked rate for the entire term, it makes sense to consider investing in CDs as part of your broader investment strategy.
Still, this evolving rate environment presents both challenges and opportunities for strategic savers, leading to some hesitation for those considering locking their funds into one of these accounts. But while the natural instinct might be to shy away from CDs as rates decline, it’s important to understand how far CD rates have actually fallen this year — as well as the enduring benefits of these financial instruments.
See how much more you could be earning with a CD now.
Here’s how far CD rates have dropped this year
To illustrate the change in CD rates that has occurred so far in 2024, let’s look at the average CD rates from January 2 as well as today’s averages (according to Bankrate data).
6-month CD rates
- Average 6-month CD rate on January 2: 5.50%
- Average 6-month CD rate today: 4.85%
Total percentage drop: 11.81%
1-year CD rates
- Average 1-year CD rate on January 2: 5.66%
- Average 1-year CD rate today: 4.50%
Total percentage drop: 20.49%
3-year CD rates
- Average 3-year CD rate on January 2: 4.75%
- Average 3-year CD rate today: 4.20%
Total percentage drop: 11.57%
5-year CD rates
- Average 3-year CD rate on January 2: 4.60%
- Average 3-year CD rate today: 4.35%
Total percentage drop: 5.43%
As illustrated above, the decline in CD rates has varied by term, with 1-year CDs seeing the most significant drop. These shifts can largely be attributed to the broader economic adjustments, such as market responses to Federal Reserve interest rate policies. Lower rates often indicate a cautious market, signaling that economic growth may be slowing or that inflationary pressures are easing, both factors that banks consider when setting CD rates. Still, even with these adjustments, CDs offer some of the most attractive yields for secure savings accounts.
Open a CD and lock in today’s top rates now.
Why you should still open a CD now
CDs are still an excellent option for conservative investors or anyone looking to secure a stable return without market exposure, even at today’s lower rates. Here’s why:
- Guaranteed returns and safety: CDs provide a fixed, guaranteed return on investment, regardless of market fluctuations or future rate cuts. This stability is particularly appealing during uncertain economic times when other investments may present more volatility. For many, this peace of mind alone makes a CD worthwhile, especially when saving for short- to medium-term goals.
- Higher yields compared to savings accounts: Even with this year’s rate drops, CD rates remain higher than most standard savings or money market accounts. For example, a 1-year CD today offers an average rate of 4.50%, while the average savings account rate is currently just 0.45%. This spread can make CDs a better choice for funds you don’t plan to access for the term length, giving your money a chance to grow at a higher rate.
- Predictability for financial planning: With CDs, you know exactly what your return will be at the end of the term. This predictability helps with budgeting and financial planning, making CDs ideal for earmarked funds such as emergency savings, future down payments or anticipated large expenses.
- Potential tax benefits on longer terms: The potential tax advantages can also help enhance overall returns on longer-term CDs. While CDs are subject to income tax, tax-advantaged accounts like IRAs often allow CDs to grow tax-free until withdrawal. This option can be particularly appealing for long-term savers, as it lets returns accumulate more efficiently, effectively offsetting some of the recent rate drops.
The bottom line
While this year has seen a decline in CD rates across all terms, the value proposition of CDs remains strong, especially for those prioritizing safety, fixed returns and ease of financial planning. Even with the rate reductions, CDs can offer higher yields than regular savings accounts and the security of knowing your investment is FDIC-insured up to the standard limit. As the economic landscape continues to evolve, it’s worth considering the potential for future rate shifts, but locking in a CD today can still provide benefits for savers seeking reliable, stable returns on their cash.
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Opioid overdose deaths have now slowed to the lowest levels nationwide since 2020, according to new estimates from the Centers for Disease Control and Prevention. This marks the 12th straight month of decline since a peak last year.
Around 70,655 deaths linked to opioids like heroin and fentanyl were reported for the year ending June 2024, the CDC now estimates, falling 18% from the same time in 2023.
Almost all states, except for a handful in the West from Alaska through Nevada, are now seeing a significant decrease in overdose death rates. Early data from Canada also suggests overdose deaths there might now be slowing off of a peak in 2023 too.
“While these data are cause for optimism, we must not lose sight of the fact that nearly 100,000 people are still estimated to be dying annually from drug overdose in the U.S.” said Dr. Nora Volkow, director of the National Institute on Drug Abuse, in a statement.
Other types of drug overdoses beyond opioids are also slowing. While they make up a smaller share of overall deaths, overdoses linked to drugs like methamphetamine and cocaine are also showing signs of dropping nationwide following a peak last year.
“We are encouraged by this data, but boy, it is time to double down on the things that we know are working. It is not a time to pull back, and I feel very strongly, and our data shows, that the threat continues to evolve,” Dr. Allison Arwady, head of the CDC’s National Center for Injury Prevention and Control, told CBS News.
Arwady pointed to a long list of factors that officials hope are contributing to the decline, ranging from broader availability of the overdose reversing spray naloxone, also known as Narcan, to efforts to ease gaps in access to medications that can treat opioid use disorder.
John Tlumacki/The Boston Globe via Getty Images
Trends in what health officials call “primary prevention” have also improved in recent years — meaning fewer people using the drugs to begin with. As an example, Arwady cited CDC surveys showing a clear decline in high school students reporting that they have tried illegal drugs.
The CDC and health departments have also gotten faster at gathering and analyzing data to respond to surges in overdoses, Arwady said, often caused by new so-called “adulterants” that are mixed in. Health authorities study this by testing blood and drug samples taken in the wake of surges, in search of potential emerging drug threats.
Agency researchers are now looking closer at what could be behind gaps in communities that are still not seeing slowdowns, Arwady said.
“Unfortunately, for the most affected groups, namely Native Americans and Black American men, the death rates are not decreasing and are at the highest recorded levels,” said Volkow.
Why are drug overdose deaths declining?
In the months since CDC data first began showing real signs of a nationwide change to the deadly record wave of opioid overdose deaths, experts have floated a number of theories to explain what caused the change.
“We had been seeing the numbers go down, on the national aggregate level, since last April, and we were skeptical and kind of holding our tongues. Then we started hearing from a lot of folks on the ground, frontline providers,'” said Nabarun Dasgupta, a senior scientist at the University of North Carolina Chapel Hill who studies opioid overdose deaths.
Dasgupta led an analysis in September by the university’s Opioid Data Lab illustrating the nationwide scope of the downturn and probing a number of theories that might explain it.
Some explanations they dismissed as unlikely, like stepped-up law enforcement operations. Other ideas they judged as plausible, but complicated to prove, like a so-called “depletion of susceptibles” — essentially the epidemic burning itself out, as users either found ways to survive the influx of fentanyl or died — or the wider availability of naloxone.
Dasgupta said they received a flood of interest since their initial post proposing more theories, like new scanners that were deployed on the U.S.-Mexico border.
There are likely a number of factors all playing a role in the shift, Dasgupta says. But he said early data from research they are wrapping up now supports one leading explanation: a shift in the illegal drug supply.
“Our hypothesis is that something has changed in the drug supply. This kind of pronounced shift, something that happens suddenly, if numbers had suddenly shot up, we would definitely be pointing to a change in the drug supply to explain it,” said Dasgupta.
Amid its downsides, xylazine‘s rise might have led to less injection drug use, they speculate. Its longer high could also be reducing the number of times people use fentanyl each day.
“We’re not in our offices celebrating. We’re still losing too many people that we love. So I just want it to be very clear that with like a hundred thousand people still dying, that’s obscenely high,” he said.