Act Now: CD Rates Peak as Fed Cuts Loom
Certificates of deposit (CDs) remain a compelling option for savers as of October 10, 2025, with top rates reaching 4.35% annual percentage yield (APY) for 3-month terms, according to recent data. These rates reflect a cooling market after the Federal Reserve's rate cuts in September 2025, which reduced the federal funds rate to a target range of 4.00%-4.25% [2]. Analysts anticipate further reductions in the coming months, prompting experts to advise locking in high rates promptly [1].
Current CD rates vary by term, with online banks and credit unions typically offering the most competitive yields. As of October 2025, the best rates include:
- : 4.10% (average) to 4.35% (Ivy Bank) [5]
- : 4.30% (average) to 4.94% (Forbes' top rate) [3]
- : 4.20% (average) to 4.84% [3]
- : 4.00% (average) to 4.18% [3]
The Federal Reserve's rate-cutting cycle, which began in September 2025, is expected to continue, likely leading to lower CD rates in the near term [2]. This follows a broader trend of declining rates since 2024, with the Fed now targeting a range of 3%-3.5% by year-end [2]. Savers are advised to act quickly, as rates have likely peaked for the current cycle [1].
Online institutions, such as Ivy Bank, continue to outperform traditional banks, offering the highest APYs. Ivy Bank's 4.35% APY for 3-month CDs [5] stands as the top rate cited in recent data, while other online banks provide rates up to 4.94% for 6-month terms [3]. These platforms leverage lower overhead costs to maintain elevated rates compared to physical branches [4].
The Federal Reserve's decisions indirectly influence CD rates, with lower benchmark rates typically leading to reduced yields on new CDs. While existing CDs remain unaffected, new accounts will see declining rates as the Fed continues its easing cycle [2]. Savers are encouraged to prioritize terms that align with their liquidity needs and to consider strategies like CD laddering to balance accessibility and returns [4].
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