Summary: Federal Reserve cut rates in 2024, lock in high CD rate before further drop.

From Yahoo Finance: 2025-05-31 06:00:00

The Federal Reserve has cut its federal funds rate three times in 2024, making it a good time to lock in a competitive CD rate before rates drop further. Make sure to shop around for the best CD rates, with online banks and credit unions typically offering higher rates on shorter terms.

The Langley Federal Credit Union currently offers the highest CD rate at 4.25% APY on its 10-month CD, with a $500 minimum opening deposit required. This rate is higher than the national average, making it a lucrative option for those looking to earn more on their savings.

When considering a CD, the annual percentage rate (APY) is crucial in determining your total earnings. The more often interest compounds, the more you can earn. For example, a one-year CD with 4% APY can yield $40.74 in interest on a $1,000 deposit, showing the importance of a high APY.

If you deposit more money into a CD, you stand to earn more in interest. For instance, a $10,000 deposit in a one-year CD with 4% APY could earn you $407.42 in interest when the CD matures. This highlights the potential for higher returns with larger deposits in CDs.

Beyond traditional CDs, there are alternative options like bump-up CDs, no-penalty CDs, jumbo CDs, and brokered CDs that offer different benefits. While these CDs may have slightly lower interest rates, they provide more flexibility and features that could suit your financial needs better.

Read more: Best CD rates today, May 31, 2025 (best account provides 4.25% APY)