US CD rates settle at 4% APY as yield curve flattens
As of Wednesday, May 6, 2026, the highest available certificate of deposit rates have stabilised at 4% APY, with 12-month terms currently commanding the best average yields in a flattening yield curve environment.
On Wednesday, May 6, 2026, the United States certificate of deposit market reached a notable plateau, with the highest available rates standing at 4% annual percentage yield. Marcus by Goldman Sachs is currently offering a nine-month CD at this top rate, providing a competitive option for savers seeking to lock in returns before further declines. While these figures represent a retreat from the peaks achieved in 2023, the yields remain elevated when measured against historical precedents.
The current landscape reflects a distinct shift in the yield curve, which is showing a clear flattening trend. Traditionally, longer-term deposits would command higher premiums to compensate for the risk of capital being tied up. However, data indicates that 12-month terms are now offering higher average rates than both shorter and longer durations. This inversion suggests that market participants are pricing in expectations of future interest rate reductions.
The backdrop to this stability is the Federal Reserve's aggressive policy pivot over the last two years. Between March 2022 and July 2023, the central bank raised rates eleven times to combat inflation, driving CD rates to their recent highs. Following a decision in September 2024 to cut the federal funds rate, the Fed announced three additional reductions in 2025. Consequently, CD rates have been on a steady downward trajectory from their 2023 zenith, though they have not yet returned to the ultra-low environment of the early 2020s.
Institutional dynamics continue to influence where investors find the best value. Online banks, such as Marcus by Goldman Sachs, frequently offer superior rates compared to traditional brick-and-mortar institutions. This advantage stems from lower overhead costs associated with digital-only operations. However, financial experts caution that savers must verify that any online institution offering these rates is FDIC-insured to ensure deposit protection.
When evaluating these products, investors must weigh the advertised APY against other critical factors, including term length, withdrawal penalties, and minimum deposit requirements. While the 4% APY offers a safe, fixed return, it may not fully keep pace with inflation over extended periods. Furthermore, the decision to lock funds for a specific term requires careful consideration of future liquidity needs, as early withdrawals can incur significant costs.
Looking ahead to the remainder of 2026, uncertainty remains regarding the direction of interest rates. While experts are currently weighing the possibility of further declines or a potential pause, no definitive predictions have been made for the rest of the year. For now, savers are advised to review their options carefully, noting that short-term CDs ranging from six to 12 months generally offer rates between 4% and 4.5% APY.
