The Federal Reserve cut its federal funds rate three times in 2024, making now a good time to secure a competitive CD rate before rates drop further. CD rates vary among financial institutions, so it’s crucial to shop around for the best rate possible. Online banks and credit unions typically offer the highest CD rates on shorter terms.

As of August 2, 2025, Gainbridge® offers the highest CD rate of 5.5% APY on its 5-year CD with a $1000 minimum opening deposit. The amount of interest you earn on 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 interest would yield a balance of $1,018.25 after a year. Opting for a one-year CD with 4% APY would result in a balance of $1,040.74, including $40.74 in interest. The more you deposit in a CD, the more you can potentially earn in interest.

When selecting a CD, it’s essential to consider factors beyond the interest rate. Various types of CDs offer different benefits, such as bump-up CDs that allow you to request a higher rate once, no-penalty CDs that enable early withdrawals without penalties, jumbo CDs with higher minimum deposits and potentially higher rates, and brokered CDs purchased through a brokerage with potential higher rates and terms but more risk.

Read more at Yahoo Finance: Best CD rates today, August 2, 2025 (best account provides 5.5% APY)