CD Rates 2023: Analyzing Trends and Predictions

As we head into 2023, many investors are curious about the current state and future potential of Certificate of Deposit (CD) rates. CDs are a popular, low-risk investment option that allows individuals to earn interest on their savings over a fixed period. With interest rates remaining historically low in recent years, people are eager to see if CD rates will experience a significant increase this year.

By June 2023, it is anticipated that the average 3-month CD rate could reach the 2% range, while rates for 12- and 18-month CDs might top 5%. However, the outlook for longer-term CD rates is more uncertain due to the current economic environment and tempered expectations for long-term inflation. As investors monitor the CD rates in 2023, they will be closely watching economic indicators and market trends to make informed decisions about their investments.

Current CD Rates in 2023

In 2023, CD rates have started to rise, offering better returns to investors than in recent years. Some of the best CD rates can be found at online banks, which tend to offer higher returns than traditional brick-and-mortar institutions.

According to Bankrate’s weekly national survey, large banks and thrifts have recently increased their CD rates. Furthermore, NerdWallet’s data analysis in February 2023 found that CD rates were higher than they have been in years.

It is essential to shop around for the best rates and terms as individual banks may offer different rates for CDs of varying lengths. Some common CD terms include:

  • 3-months
  • 6-months
  • 12-months (1-year)
  • 24-months (2-years)
  • 36-months (3-years)
  • 48-months (4-years)
  • 60-months (5-years)

While the exact rates will vary between banks and account types, it is clear that CD rates in 2023 have begun to offer better returns compared to previous years. Investors looking for higher rates should consider researching and comparing options from different banks, specifically online banks, which often provide more competitive rates.

Factors Affecting CD Rates

One of the primary factors affecting CD rates is the monetary policy set by the Federal Reserve. The Fed influences short-term interest rates, including the federal funds rate, which in turn impacts the rates banks offer on their CD products. With the expectation that the Fed will continue raising rates throughout 2023, it is likely that CD rates will follow suit.

Another factor impacting CD rates is inflation. When inflation is high, banks typically raise interest rates to keep up with the rising cost of living. Forbes Advisor indicates that inflation rates are expected to moderate over 2023, which might influence CDs’ increase pace during the year.

Market competition between financial institutions also plays a role in determining CD rates. Banks compete for customers by offering attractive interest rates on their products, including CDs. As a consequence, fluctuations in the competitive landscape can lead to changes in CD rates.

Lastly, economic conditions and risks can influence the rates offered on CDs. In uncertain economic times, banks may lower their CD rates to preserve their profit margins. However, as the economy recovers, banks may increase CD rates to attract more deposits and fund their lending activities.

Predictions for Future CD Rate Increases

In 2023, CD rates are expected to continue rising, although at a slower pace than in 2022. According to Money Crashers, the average 3-month CD rate could increase by June 2023. This trend of rising rates could benefit savers who invest in certificates of deposit.

Bankrate’s Chief Financial Analyst, Greg McBride, forecasts that the national average rate for a one-year CD will reach 1.8% by the end of 2023. Top-yielding one-year CDs may see even higher rates.

Factors contributing to these rate increases include an improving economy and the Federal Reserve’s monetary policies. Inflation is also a significant factor since it has the potential to influence interest rates. The recent peak in inflation in December 2022, as reported by USA Today, saw prices rise by 6.5%, which may impact CD rates.

Here is an overview of the CD rate predictions for 2023:

  • Average 3-month CD rate to increase by June 2023
  • National average one-year CD rate to reach 1.8% by the end of 2023
  • Top-yielding one-year CDs may see rates higher than 1.8%

Tips for Choosing CDs in 2023

When choosing CDs in 2023, there are some factors you need to consider to make the best decision. Here are a few tips to guide you:

1. Monitor interest rates: Interest rates change constantly, and banks set their CD rates based on the prevailing rates. Keep an eye on these changes to understand the market trend and make an informed decision. You can do this by checking sites like Nasdaq for updated rates and forecasts.

2. Look for promotional offers: Banks often offer promotional rates for CDs that are higher than their regular rates. Keep an eye out for these promotions, as they can provide a higher return on your investment.

3. Choose the right term: CDs come in varying terms, ranging from a few months to several years. The longer the term, the higher the interest rate, but your money will be locked up for that period. Consider your financial goals and liquidity needs when choosing the CD term.

4. Diversify your portfolio: Don’t put all your money into one CD. Instead, split your investment across multiple CDs with different terms and rates. This “CD ladder” approach allows you to take advantage of any upward changes in interest rates and ensures that you have access to cash at different intervals.

5. Compare banks and credit unions: Different financial institutions offer varying CD rates, so it’s crucial to shop around before settling on one. Online banks and credit unions often have higher rates than traditional brick-and-mortar banks, so be sure to explore all your options.


As we move through 2023, it is clear that CD interest rates are experiencing some fluctuations. As of February 21, 2023, average one-year CD rates were at 1.36%, while predictions for the future show a potential increase, with rates reaching as high as 5.5% for one-year CDs.

However, it’s important to note that rates may eventually level off as the year progresses, with expectations of a weakening economy in 2023. In order to make the most informed decisions regarding CD investments, it’s crucial for savers to keep a watchful eye on the market and adjust their strategies accordingly.

When searching for the best CD rates, consider looking into various institutions, including online banks and credit unions, as they may offer more competitive rates than traditional brick-and-mortar banks. Don’t hesitate to do your research and compare the available options to find the most appropriate CD product to align with your financial goals.

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