The Federal Reserve has announced its first rate cut of 2025, making it a good time to lock in a competitive CD rate before rates fall further. CD rates vary widely, with the highest rate currently at 4.25% APY. Online banks and credit unions typically offer the best rates on shorter terms.

Interest earned from a CD depends on the APY and how often interest compounds. For example, a $1,000 investment in a 1-year CD with 4% APY would grow to $1,040.74 after one year. Depositing more money in a CD means earning more interest, with a $10,000 deposit at 4% APY resulting in $407.42 in interest.

When choosing a CD, consider factors beyond the interest rate, such as flexibility and benefits offered by different types of CDs. Options include bump-up CDs, no-penalty CDs, jumbo CDs, and brokered CDs. Each type has its own advantages and considerations, so choose one that aligns with your financial goals.

Read more at Yahoo Finance: Best CD rates today, October 18, 2025 (best account provides 4.25% APY)