CD Rates Today: Lock in Up to 4.50% APY

As of February 24, 2025, the best CD rates still earn above 4 percent APY, with the top rate tracked by Bankrate being offered by Bask Bank for a 3-month term at just under three times higher than the national average of 1.79 percent on a one-year CD. This is a significant increase from the historical averages, which have been declining over time.

Historically, CD rates have been influenced by the federal funds rate set by the Federal Reserve. When the Fed raises its benchmark rate, banks and credit unions typically follow suit by increasing their CD rates. Conversely, when the Fed lowers its benchmark rate, CD rates tend to decrease as well. This trend has been observed over the past decade, with CD rates peaking in late 2018 and early 2019, following a series of rate hikes by the Fed, and then declining as the Fed began cutting rates in late 2019.

As of January 2025, the Fed is predicted to continue cutting rates, which could lead to a further decline in CD rates. However, the current rates are still competitive compared to historical averages, and savers can still find attractive yields. The leading APY across CD terms is 4.50 percent, offered on a three-month term from Quontic Bank and a nine-month term from Bask Bank. This is significantly higher than the national average APY of 1.79 percent on a one-year CD, which was the average rate in 2019.

In conclusion, the highest CD rates today are significantly higher than historical averages, and the trend over time has been influenced by the Fed's benchmark rate. While the current rates are still competitive, savers should be aware of the potential for further declines in CD rates as the Fed continues to cut rates. To maximize their returns from CDs, investors can employ strategies such as locking in high rates while they're available, considering shorter-term CDs, laddering CDs, shopping around for the best rates, and considering promotional CD rates. By staying informed about the latest developments in the economy and the banking sector, savers can make the right decisions for their financial goals.