Get yields above 4% on your cash with these CDs
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Federal Reserve interest rate policy may be up in the air, but some banks are fattening up the yields offered on certificates of deposit, sending them above 4%. Maximum offered rates on CDs, savings and money market accounts have been trending higher this month, according to research from Jefferies. The firm found that 16 banks lifted their maximum CD yields in the past month, led by PNC Financial. The Pittsburgh-based bank hiked the annual percentage yield on its 7-month CD by 50 basis points to 4%. One basis point is equal to one one-hundredth of a percent. "2Q earnings commentary suggests deposit competition remains intense, with many banks signaling upward pressure on funding costs through 2H'26," wrote Jefferies analyst David Chiaverini in a Wednesday report. "In the near term, we expect deposit costs [for banks] to increase modestly, with the potential for upward pressure as the year progresses, absent a material shift in the rate outlook," he added. The federal funds rate, currently in a target range of 3.5% to 3.75%, along with the direction of Treasury bill yields, influence the rate banks are willing to pay on deposits. Fed funds futures trading suggests a roughly 40% chance of a rate hike at the next central bank meeting in September, down from nearly 50% on Tuesday, as July's consumer inflation report matched the Dow Jones consensus. Meanwhile, 6-month Treasury bill yields have climbed to 3.93% from 3.62% since the start of the Iran war. Up and over 4% APY In the past week, Bread Financial boosted its 1-year CD annual percentage yield by 10 basis points to 4.25% . Popular Direct is also toting a 4.25% APY on its 1-year CD. Close behind are Sallie Mae and CIBC , both of which have 4.15% yields on their 1-year CDs. Synchrony Financial pays 4.1% , and Capital One offers an even 4% on these instruments. The richer rates come as yields on money market funds have been stuck in a holding pattern. The Crane 100 Money Fund Index has an annualized seven-day current yield of 3.49%, just two basis points above where it stood at the end of June. Investors hoping to lock in today's higher CD rates should be aware that they're making a trade-off for less liquidity. Breaking a CD before its maturity comes with a penalty in the form of interest forfeiture. Savers should also keep an eye on their CD's maturity date, as rates on renewal CDs aren't always as competitive and it pays to shop around. Finally, as generous as these yields may be now, they won't keep up with inflation in the long run, so be sure to consider your purpose and time horizon for your funds before you commit.