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2024 RMD Withdrawals Are Due by Dec. 31—But You Can Still Save the Money

If you have a retirement account that stipulates required minimum distributions (RMDs) after a certain age, those withdrawals must occur every year by Dec. 31 in order to avoid significant penalties. You can withdraw the required dollar amount—or more—at any time throughout the year, and in as many withdrawals as you like. But to let your money grow tax-free for as long as possible in your retirement account, you may opt to wait until late in the year to make one lump-sum withdrawal of the required RMD amount.

This is especially true if you don't need the money right now. But where should you put the unneeded funds you withdraw? If you're confident you won't need the money for a long time, you could consider reinvesting it in a taxable brokerage account. But that comes with risk, as investments can lose money.

If instead you'd like to protect the cash from any losses while still watching it grow, you're in luck in 2024. That's because savings accounts and certificates of deposit (CDs) are paying historically high rates right now. By shopping around for a top savings or CD rate (we have dozens of excellent options for you below), your funds can grow 4% to 5%—or even more—and be safe from any risk.

Why CDs Are So Smart Right Now for Your Savings

Thanks to the Federal Reserve's historic rate-hike campaign between 2022 and 2023, aimed at taming post-pandemic inflation, CD rates surged to 20-year highs last fall—reaching above 6%. Now that inflation has cooled, however, the Fed has shifted to a rate-cutting phase. As a result, CD rates have been declining, with the top nationwide rate recently slipping to 5.50%.

Unfortunately for savers, the Fed is expected to follow up on September and November cuts to the federal funds rate with further reductions—possibly in December, but almost certainly in 2025. The central bank could even keep cutting rates into 2026.

This potentially long rate slide is precisely why today's top CDs—especially multi-year certificates—are such a smart move right now. By locking in one of today's rates, your return on those funds will be insulated from whatever moves the Fed makes in the next couple of years.

While it's true that the best nationwide CD rates have softened from their 2023 peak, they continue to pay historically high returns. Just compare today's rates below to the rates on a CD opened in early 2022, when the very top rates in the nation ranged from just 0.50% to 1.50% APY.

These Top-Paying CDs Provide a Smart, Safe Place for Your RMD Funds

Our daily ranking of the best CD rates always provides you with a list of the highest-paying offers that are available nationwide. Right now, the top returns are offered on shorter-term CDs, while longer-term CDs pay slightly lower rates but extend their rate guarantee much further into the future.

Here's a roundup of some of today's hottest rates across terms that can extend almost as far as 2030. For further details on any of these CDs, click the link to our list of the best offers in that term.

To Maintain Access to Some Money, Consider These High-Yield Savings Accounts

If you can't commit all of your RMD funds to a CD, the next-best option is to sock the cash away in a top-ranked high-yield savings account. Though these rates are expected to come down as the Fed implements future rate cuts, for now you have multiple choices to earn at least 5.00%.

You can find details on these options, plus many more, in our daily roundup of today's best high-yield savings account rates.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.

Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.