A number of federal rate hikes over the past year and a half havent just raised the cost of borrowing, but savers have also seen a boost in their savings account APYs. Currently, the average national savings rate stands at 0.40%up from 0.07% just one year ago. 

The same is true of certificate of deposit (CD) rates. In May 2022, the average national rate for a 1-year CD stood at 0.21%. Since then, that average has shot up to 1.59%, with many banks and credit unions offering well above that national average. 

One of the top contenders right now: CFG Banks 12-month CD

CFG Bank: 1-year CD offers 5.28% APY

Founded in 2009, CFG Bank is a Maryland-based bank that offers one- to five-year CDs, as well as money market accounts, traditional checking accounts, and commercial banking products. They have a handful of brick-and-mortar locations across Maryland, although customers can also bank with CFG online or via the mobile application. 

Currently, CFGs 1-year CD is offering a 5.28% APYjust over three times the national average. Savers who want to take advantage of this APY can open an account online or in one of CFGs physical branches. 

Key numbers

Minimum opening deposit: $500

1-year APY: 5.28%

Penalty: 90 days worth of simple interest

Savers will need to make a minimum opening deposit of $500, but no more than $500,000, and maintain a minimum daily balance of $500 to earn the 5.28% APY. If necessary, account holders can make withdrawals within the first 30 days. However, after that point, making any withdrawals will result in a penalty.

Pros and cons of CD  

CDs work a bit differently than a traditional savings account. As such, it may not be the right type of account for every saver. Some of the pros and cons to consider include: 

  • Higher rates than a traditional savings account: CDs require that you commit to locking up your funds for the duration of your term. Because of that, these accounts typically offer a higher APY than traditional savings accounts
  • CDs offer a fixed interest rate: Unlike a traditional savings account or money market account, CDs offer a fixed interest rate. Savers who prefer stability and dont want to be subjected to the impacts of federal rate hikes or market fluctuations might prefer a CD for this reason. 
  • Locking yourself into a CD may keep you from higher rates: One potential downside of CDs is that having a fixed interest rate could also keep you from earning the highest possible APY if rates increase.  
  • CDs do not offer the same liquidity as other savings vehicles: Savers who want to have more of a safety net and prefer to have access to their money might consider opting for a savings account that does not penalize them for making a withdrawal before a certain time. While there are no-penalty CDs, most CDs will charge savers a penalty for making a withdrawal before their CD has matured. 

The takeaway 

CDs can be part of a lucrative savings strategy for savers who are prepared to lock up their funds for a set amount of time. With many financial institutions offering APYs well above the national average, savers may want to consider parking their savings in a CD to supercharge their savings.


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