Federal Reserve has cut rates, good time to secure a competitive CD rate before further decreases

From Yahoo Finance: 2025-03-23 14:41:00

The Federal Reserve has cut federal funds rates three times in 2024, making now a good time to lock in a competitive CD rate before they drop further. CD rates vary widely across institutions, so it’s important to shop around for the best offers. Historically, longer-term CDs offered higher rates, but in today’s climate, the opposite is true.

Currently, Marcus by Goldman Sachs offers the highest CD rate of 4.50% APY on its 14-month CD with a $500 minimum deposit. LendingClub also offers 4.50% APY on its 10-month CD with a $2,500 minimum deposit. The amount of interest earned from a CD depends on the annual percentage rate (APY) and how often interest compounds.

For example, investing $1,000 in a one-year CD with 1.81% APY would yield $18.25 in interest. Choosing a one-year CD with 4% APY would result in $40.74 in interest. The more you deposit, the more you can earn – a $10,000 one-year CD at 4% APY would yield $407.42 in interest. When choosing a CD, consider factors beyond just the interest rate.

Types of CDs like Bump-up CDs, No-penalty CDs, Jumbo CDs, and Brokered CDs offer different benefits and flexibility. Bump-up CDs allow for a rate increase, No-penalty CDs allow for early withdrawals, Jumbo CDs require higher deposits for potentially higher rates, and Brokered CDs are purchased through a brokerage and may offer higher rates but come with more risk.



Read more at Yahoo Finance: CD rates today, March 23, 2025 (best account provides 4.50% APY)