Important points
The Federal Reserve is scheduled to announce its new interest rate decision next Thursday, and the overwhelming expectation is that it will cut rates by a quarter of a percentage point. This lowers savings account and CD rates, so now is a smart time to secure future rates on one of the best CDs nationwide. The top 12 CDs pay 5.00% to 5.50% on contracts of up to 12 months. Alternatively, you can secure a maximum interest rate of 4.00% to 4.65% that is fixed from 2026 onwards and even until 2029. The Fed is expected to continue lowering rates in December, so the sooner you open a CD, the better. And through 2025, savings and CD returns will continue to decline.
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Why you should consider a CD with guaranteed rates until 2025 and beyond
When interest rates are high but trending downward, certificates of deposit (CDs) are one of the smartest places to keep some of your cash savings. That’s because the Annual Percentage Yield (APY) you signed up for is the rate you’ll stay at, even though interest rates on savings accounts and new CDs are dropping.
That’s the situation American savers are in now. CD rates rose to their highest level in more than 20 years last fall in the wake of the Fed’s aggressive rate hike campaign in 2022-2023, and they continue to pay historically high interest rates. But the days of the 5% CD seem to be over.
This is because the Fed has decided to cut interest rates now that inflation has cooled. The central bank began this new phase with a 0.50 percentage point cut on September 18, and is expected to further reduce its rate cuts at next week’s meeting, which concludes with an announcement of its rate decision on November 7.
The best CDs charge 5% or more for up to a year, but a longer warranty may be wiser
Although CD prices are already down from their 20-year peak, you can still get competitive rates. For example, the top 12 nationally available CD options earn returns of 5.00% or more. The highest offer is 5.50% APY and is available for an 8-month term. Or you can get a maximum interest rate of 5.00% fixed for one year. These terms guarantee CD rates through 2025.
5.50% Consider a combo strategy
Now, you’re lucky to have the option of a combined approach where you can earn 5.50% on the nation’s highest-rated savings account and earn the same 5.50% on some of the cash you put in a major CD. This winning combo lets you lock in today’s highest interest rates on CDs and keep some of your withdrawable cash in a high-yield savings account.
However, choosing a longer CD term with a longer APY may be a better choice. If you can manage to go longer than 18 months without using any of your savings, you can extend your current excellent interest rate even further. The top interest rate for 15 months is 4.65%, compared to the primary 2-year CD payment rate of 4.50%. This 24-month rate lock allows you to earn guaranteed returns through Halloween 2026.
It is also wise to consider longer rate locks. Earn rates as high as 4.00% to 4.25% with a certificate that guarantees your rate through 2027, 2028, or even late 2029.
Don’t delay — multiple Fed rate cuts could continue to push savings rates and CD rates down
More than 95% of interest rate traders are currently betting on the announcement, according to CME Group’s FedWatch tool, with another quarter-point rate cut likely next week. However, this is unlikely to be the end. Almost three-quarters of these investors expect a quarter-point cut at the December 18th meeting.
The Fed also expects to cut rates further in 2025 and possibly 2026, as the dot plot shows. The quarterly chart, last released on September 18, shows what each Fed member anonymously expects to happen to the federal funds rate over the next few years. As seen below, their median forecast is for a total rate cut of 0.5 percent over the past two meetings in 2024, another 0.5 percent rate cut in 2025, and possibly another 0.5 percent rate cut in 2026. Probably.
Only time will tell what happens to the federal funds rate after this year. However, it is fairly certain that the interest rates that can be guaranteed now are significantly better than the rates expected in the coming months. Therefore, locking your favorite CDs right away is still a wise and proactive move.
Daily ranking of best CDs and savings accounts
Please note that the “best interest rate” quoted here is the highest interest rate available nationally, as determined by Investopedia in its daily interest rate survey of hundreds of banks and credit unions. This is significantly different from the national average, which includes all banks that offer CDs for that term, including many large banks that pay nominal interest. So while the national average is always very low, the best rates you can shop around and find are often 5, 10, or even 15 times higher.
How to find the best savings and CD rates
Every business day, Investopedia tracks interest rate data from more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide to determine a daily ranking of the highest paying accounts. To be on our list, a financial institution must be federally insured (FDIC for banks, NCUA for credit unions) and have a minimum initial account deposit of $25,000. Must not be exceeded. You also cannot specify a maximum deposit amount less than $5,000.
To qualify for national banking, you must be able to bank in at least 40 states. Additionally, some credit unions may require a specific charity or We ask you to donate to organizations, but we exclude credit unions with contribution requirements of $40 or more. To learn more about how to choose the best rate, read our full methodology.
