In its seventh meeting of the year, the Federal Reserve voted to drop interest rates to the 3.75% to 4.00% range. That’s welcome news for those hoping to refinance a mortgage, but disappointing for consumers looking to save.
As we head into fall, there are still plenty of CDs offering yields above 4%. That’s higher than CD rates have been in the last decade and higher than inflation, which currently sits at 3.0% as of September.
However, economists expect the Fed to continue cutting rates later this year. The Fed Watch Tool currently estimates a 67% chance of another rate cut in December.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Your best bet is to lock in current higher rates for as long as you can with a 5-year CD. Right now, the best 5-year CD rates are above 4%. While shorter-term CDs are a little higher, the benefit of securing higher yields for the next five years is worth taking the slightly lower rate.
If rates do keep dropping through the rest of this year, you might not find offers this good again when your short-term CD matures in a few months or a year from now.
So, if you can afford to lock up your cash for a few years, a 5-year CD is one of the best places to store your cash in 2025.
5-Year CDs we recommend after the Fed meeting
With 5-year CD rates still above 4%, this is a great time to lock in inflation-beating yields for the long term.
Since rates are fixed for the entire term, these longer term CDs allow you to secure today’s above-average rates before the decreases expected later this year.
Here are some of the top 5-year CD accounts you can open today:
Account | APY | Min. Deposit |
|---|---|---|
4.15% | $500 | |
4.00% | $500 | |
3.97% | $500 | |
3.91% | $500 | |
3.90% | $500 | |
3.80% | $5,000 | |
3.65% | $1,000 | |
3.60% | $1,000 |
Short-term CDs are still a good choice if you need flexibility
Locking up your cash for five years isn’t a realistic option for everyone. If you know you’ll need to tap into those savings sooner, there are plenty of attractive shorter-term CDs to choose from.
The best 1-year CD rates are hovering around 4.15%. You can also find 3-month or 6-month CDs offering similar yields. So if you need a little more flexibility with your funds, it’s worth considering a shorter-term CD.
Use the tool below to compare the best CD rates by term and APY, powered by Bankrate:
When to consider a high-yield savings account
Even with the pause on rate cuts over, now is still a good time to open a high-yield savings account. You won’t be able to lock in rates for a fixed term like you can with a CD, but there’s also no penalty for dipping into those savings as needed.
With some of the best high-yield savings accounts offering rates as high as 4.35% APY, this is the best place to stash your emergency fund, vacation savings, or other cash that you need regular access to.
Use the Bankrate tool below to find the best fit for your savings.
How to make the most of today’s CD rates
After the Federal Reserve’s rate cut, locking in a 5-year CD remains one of the best ways to maximize your savings. With yields still above 4%, these accounts continue to beat inflation and can protect your money from further rate declines expected later this year.
If you need more flexibility, shorter-term CDs or high-yield savings accounts are still strong choices for keeping your cash accessible while earning a competitive return.
Related content
-
Investors Buy the Nasdaq's Big Dip: Stock Market TodayStocks are up and down again to end an up-and-down week ahead of big earnings announcements and the eventual return of regular economic data flow.
-
What to Know About Portable MortgagesA closer look at how portable mortgages would work, who might benefit and why the concept is gaining attention amid high rates and limited supply.
-
No-Penalty CD or High-Yield Savings? What Works Best NowDiscover which option can help you reach your savings goals quickly.
-
I Inherited $50,000, and My Retirement is Fully Funded. Where's the Best Place to Store It for Maximum Growth?These savings solutions can help you maximize returns without the risk.
-
Where You Choose to Stash $100k Now Comes with a Big Opportunity CostThe Fed recently cut rates. Here's where to maximize your savings while rates remain higher.
-
Where to Deposit Your Social Security CheckIf you receive Social Security checks, where you deposit them matters because it can help grow your earnings. See the best options.
-
Top Places to Park $10K (or More) as Rates Start to FallWith more rate cuts upcoming, here are some smart places to maximize your savings on $10,000.
-
Savvy Savings Moves to Make Now – Or You Could Lose ThousandsDespite a rate cut and inflation, these moves can still help you reach your savings goals quickly.
-
I Have $150,000 That I Don’t Need Anytime Soon, but I Don’t Want To Put It in the Market. What Should I Do?My strategy offers a guaranteed return that can earn you thousands effortlessly.
-
Falling Interest Rates: What They Mean for Homeowners, Savers and InvestorsAs interest rates fall, homeowners may celebrate while savers feel the pinch. Here’s what the change could mean for your money.
