CD Rates in 2025: Up, Down, or Stable?

As we approach 2025, many investors are wondering what the future holds for certificate of deposit (CD) rates. With the Federal Reserve's recent rate cuts and the ongoing economic recovery, it's essential to consider the potential trends for CD rates in the coming year. In this article, we'll explore the factors influencing CD rates and provide insights into whether they are likely to rise, fall, or remain stable in 2025.

Factors Influencing CD Rates in 2025

1. Federal Reserve Monetary Policy: The Federal Reserve's monetary policy, particularly its benchmark interest rate, has a significant impact on CD rates. In 2024, the Fed lowered its benchmark rate three times, which directly influenced CD rates. Many analysts expect at least two more Fed rate cuts in 2025, which could lead to lower CD interest rates.
2. Economic Conditions: Economic indicators such as inflation and unemployment rates play a crucial role in determining CD rate movements. In 2025, if inflation remains high or starts to rise again, the Fed might raise interest rates to combat it, potentially leading to higher CD rates. Conversely, if inflation continues to decline or remains stable, the Fed is likely to keep interest rates steady or even cut them, resulting in lower CD rates.
3. Competition Among Banks: Competition among banks can also impact CD rates. When banks are looking to increase their deposits, they may raise the APY on high-yield savings accounts and CDs to attract more customers. This can lead to higher CD rates, regardless of the overall economic conditions or the Fed's monetary policy.

CD Rate Forecast for 2025

Given the factors influencing CD rates in 2025, experts have varying opinions on the direction of CD rates. Some analysts, like Robert Frick of Navy Federal Credit Union, believe that CD rates will remain relatively stable in the coming months, with only minor fluctuations. Others, such as Stephen Taddie of Focus Partners, expect CD rates to start declining later in the year if the Fed proceeds with rate cuts.

Is Now the Right Time to Open a CD?

CD rates might not be as high as they were last year, but that shouldn't deter you from locking in a favorable rate while you still can. Experts like Davide Accomazzo of Pepperdine University's Graziadio Business School advise against waiting for a clear direction in interest rates before opening a CD. Instead, consider opening a CD with a term that matches your timeline for when you'll need the money, allowing you to lock in a rate and remove some of the uncertainty.



In conclusion, the CD rate landscape in 2025 is likely to be influenced by the Federal Reserve's monetary policy, economic conditions, and competition among banks. While experts have differing opinions on the direction of CD rates, it's essential to stay informed and make decisions based on your financial goals and risk tolerance. By keeping an eye on economic indicators and market trends, you can position yourself to take advantage of favorable CD rates in the coming year.