From Yahoo Finance: 2025-05-27 06:00:00

The Federal Reserve has cut the federal funds rate three times in 2024, causing deposit account rates to decrease. Despite this, you can secure a competitive return on a CD with rates above 4%. The highest CD rate is currently 4.4% APY by NexBank on its 1-year CD.

CD rates have fluctuated over the years, with the 2000s seeing higher rates initially but dropping after the financial crisis. The 2010s saw very low CD rates due to Fed policies. Rates improved between 2015-2018, but fell again during the pandemic.

Following the pandemic, the Fed hiked rates, resulting in higher CD rates. However, in September 2024, the Fed began cutting rates due to inflation control. Despite this, CD rates are still high compared to historical standards.

When opening a CD, consider factors like the APY, term length, financial institution, and withdrawal penalties. Research rates from online banks, local banks, and credit unions. Ensure the institution is FDIC-insured and choose a term that aligns with your financial goals.

Consider inflation when investing in CDs, as they may not always keep pace with inflation. Look at the maturity date, withdrawal penalties, and minimum deposit requirements. Longer-term CDs traditionally offer higher rates, but the current highest average rate is for a 12-month term.

Read more: Best CD rates today, May 27, 2025 (Lock in up to 4.4% APY)