From Yahoo Finance: 2025-05-13 10:49:00

The Federal Reserve lowered the federal funds rate three times in 2024, resulting in declining deposit account rates. Despite this, CD rates above 4% are still available. The highest CD rate is 4.40% APY on a 14-month CD from Marcus by Goldman Sachs, requiring a $500 minimum deposit.

In the 2000s, CD rates fell after the dot-com bubble and the 2008 financial crisis. By 2009, the average one-year CD offered 1% APY. In the 2010s, rates remained low after the Great Recession. A brief improvement occurred between 2015-2018 as the Fed raised rates.

Following the COVID-19 pandemic, the Fed slashed rates, causing CD rates to drop. With inflation rising, the Fed raised rates 11 times, leading to higher CD rates. As of September 2024, CD rates are decreasing from their peak but remain historically high.

Traditionally, longer-term CDs offered higher rates, but currently, 12-month CDs have the highest average rate. This indicates an inversion of the yield curve, common during uncertain economic times. When opening a CD, consider factors like institution type, account terms, and inflation’s impact on returns.

When choosing a CD, consider factors like account terms, institution type, and inflation’s impact on returns. Determine your goals and the length of time you’re willing to lock away your funds. Research rates from various institutions, including online banks, and understand withdrawal penalties and minimum deposit requirements.

Read more: Best CD rates today, May 13, 2025 (Lock in up to 4.40% APY)