US certificate of deposit rates hit 4.35% as yield curve flattens
Sallie Mae offers the highest current US CD rate on a three-year term, while short-term yields remain elevated despite recent Federal Reserve cuts.
The highest certificate of deposit rate in the United States reached 4.35 per cent annual percentage yield on 19 August 2026, according to data from Yahoo Finance. This peak rate is currently offered by Sallie Mae on a three-year term, providing savers with a competitive fixed return as deposit account rates generally decline from their recent peaks.
Despite the downward trend in broader deposit yields, short-term certificates of deposit with terms between six and 12 months continue to offer rates in the range of 4 per cent to 4.5 per cent APY. This resilience in short-term yields contrasts with the historical norm, where longer-term CDs typically command higher interest rates to compensate for the risk of locking in funds for extended periods.
The current market structure indicates a flattening or inversion of the yield curve, as the 12-month term now holds the highest average rate. Such a configuration often occurs during periods of economic uncertainty or when investors anticipate future interest rate declines, deviating from the traditional upward-sloping curve.
This environment follows a significant shift in monetary policy by the Federal Reserve. After hiking rates 11 times between March 2022 and July 2023 to combat inflation, the central bank began cutting the federal funds rate in September 2024. The Fed announced three additional rate cuts in 2025, contributing to the current steady decline in CD rates from their peak levels.
Historical context highlights how far current yields have come from previous lows. By 2009, in the aftermath of the global financial crisis, average one-year CDs paid around 1 per cent APY. The trend continued into the 2010s, with six-month CD rates falling to approximately 0.1 per cent APY by 2013. The recent period of higher rates marks a distinct departure from that era of ultra-low yields.
Although CD rates are steadily declining, they remain high by historical standards. Investors seeking to preserve earning power can still lock in competitive returns, particularly through short-term instruments that currently outperform longer-term averages in this inverted market.
