Ever since the Federal Reserve began lowering the federal funds rate late last year, deposit account rates have been on the decline as well.
The good news: You can lock in a competitive return on a certificate of deposit (CD) today and preserve your earning power. Read on for a snapshot of CD rates today and where to find the best offers.
What are the best CD rates today?
CD rates have remained high by historical standards, especially for shorter terms. For example, it's possible to find rates of 4.00% APY or higher for terms of about one year and under. Although interest rates for longer-term CDs aren't quite as high, the best available rates still hover near 3%-4% APY for terms of three years or more.
Today, the highest CD rate 4.50% APY, offered by Marcus by Goldman Sachs on its 14-month CD. There is a $500 minimum opening deposit required.
Here is a look at some of the best CD rates available today from our verified partners:
See our picks for the best CD accounts available today>>
Will CD rates keep going down?
CD rates are tied to the federal funds rate ; when the Fed increases its target rate, deposit account rates usually follow suit, and vice versa.
The Fed held interest rates steady for most of 2024, with a target rate of 5.25%-5.50%. However, as inflation cooled and economic growth improved, it finally slashed the federal funds rate by 50 basis points in September, and another 25 basis points in November and December. Today, the federal funds rate stands at 4.25%-4.75%. Experts believe there will be additional rate cuts in 2025.
As a result, CD rates have begun falling. That means now might be the last chance for savers to lock in today’s higher CD rates.
Read more: APY vs. interest rate: What’s the difference?
Is now a good time to invest in a CD?
Whether or not you should put your money in a CD depends on several factors. Earning a competitive interest rate is important, but it’s not the only consideration to keep in mind. Here’s a closer look at some of these key factors to think about:
Read more: How much do you need to open a CD?
Where to find the best CD rates
CDs are available from most banks. However, if you’re interested in opening a CD , it’s important to look beyond your current bank. Not all CDs offer competitive rates, even in a high interest rate environment. That’s why comparing multiple CD account options is important, especially among financial institutions that are known for offering higher rates.
Read more: Can you gift a CD?
