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. CD rates vary widely, so it’s crucial to shop around for the best rate possible.

The highest CD rate as of July 19, 2025, is 5.5% APY, offered by Gainbridge® on its 5-year CD with a $1000 minimum opening deposit. Online banks and credit unions typically offer the best CD rates, especially on shorter terms of one year or less.

The amount of interest earned from a CD depends on the APY, which considers the base interest rate and how often interest compounds. Investing $1,000 in a one-year CD with 1.81% APY and monthly compounding would yield $18.25 in interest.

Choosing a one-year CD with 4% APY would result in $40.74 in interest, demonstrating how the APY impacts earnings. Depositing more money in a CD can increase earnings significantly, as seen with a $10,000 deposit earning $407.42 in interest with a 4% APY.

When selecting a CD, consider factors beyond the interest rate, like CD type. Bump-up CDs allow for a rate increase if bank rates rise, while no-penalty CDs enable early withdrawals without penalties. Jumbo CDs, requiring higher minimum deposits, may offer higher rates, but the difference compared to traditional CDs may be minimal in the current rate environment. Brokered CDs, purchased through a brokerage, can offer higher rates or more flexible terms but carry more risk and may not be FDIC-insured.

Read more at Yahoo Finance: Best CD rates today, July 19, 2025 (best account provides 5.5% APY)