CD rates are above 4%, historically fluctuating, currently relatively high

From Yahoo Finance: 2025-04-29 06:00:00

In 2024, the Federal Reserve cut the federal funds rate three times, causing deposit account rates to decline. However, you can still secure a competitive return with a certificate of deposit (CD) at rates above 4%. The highest CD rate is currently 4.40% APY from Marcus by Goldman Sachs on a 14-month CD with a $500 minimum deposit.

Historically, CD rates have fluctuated due to economic conditions. The dot-com bubble and the 2008 financial crisis led to lower rates. The Fed’s actions to stimulate the economy in the 2010s kept CD rates low, but they began to rise again between 2015-2018. The COVID-19 pandemic caused emergency rate cuts, followed by 11 rate hikes to combat inflation from 2022-2023.

As of September 2024, the Fed started cutting rates as inflation stabilized, resulting in a decline in CD rates. Despite this, CD rates remain relatively high compared to historical standards. When choosing a CD, consider factors like term length, financial institution rates, account terms, and inflation’s impact on returns.

Traditionally, longer-term CDs offered higher rates, but currently, the highest average CD rate is for a 12-month term. This indicates a flattening or inversion of the yield curve, influenced by economic uncertainty or expectations of declining future interest rates. When opening a CD, consider the APY, term length, financial institution rates, account terms, and inflation’s impact on returns.



Read more at Yahoo Finance: Best CD rates today, April 29, 2025 (Lock in up to 4.40% APY)