Preserve Your Earning Power with Competitive CD Rates
The recent federal funds rate cuts have sent deposit account rates tumbling. However, you can still secure a competitive return on a certificate of deposit (CD) and protect your earning power. In fact, the top CDs currently offer rates above 4%.
CD Rates Today: A Snapshot
CDs continue to outperform traditional savings accounts, with short-term CDs (six to 12 months) offering rates between 4.00% to 4.50% APY. The highest CD rate available is 4.25% APY, offered by Marcus by Goldman Sachs on its 1-year CD, with a minimum opening deposit of $500 required.
A Look Back at CD Rates
The 2000s were marked by significant economic fluctuations, including the dot-com bubble and the global financial crisis of 2008. CD rates initially rose but eventually fell as the economy slowed and the Federal Reserve cut its target rate to stimulate growth. By 2009, CD rates had plummeted, with one-year CDs paying around 1% APY and five-year CDs at less than 2% APY.
The Shift in CD Rates
The trend of falling CD rates continued into the 2010s, especially after the Great Recession. However, things changed between 2015 and 2018, when the Fed started gradually increasing rates again. This led to a slight improvement in CD rates as the economy expanded. The COVID-19 pandemic prompted emergency rate cuts, causing CD rates to fall to new record lows. But as inflation began to spiral out of control, the Fed hiked rates 11 times between March 2022 and July 2023, leading to higher rates on loans and higher APYs on savings products, including CDs.
CD Rates Today: A New Era
Fast forward to September 2024, and the Fed has finally cut the federal funds rate, causing CD rates to come down from their peak. Even so, CD rates remain high by historical standards. Traditionally, longer-term CDs have offered higher interest rates compared to shorter-term CDs. However, this pattern doesn’t necessarily hold today, with the highest average CD rate available for a 12-month term.
Choosing the Right CD for You
When opening a CD, it’s essential to consider more than just the APY. Your goals, the type of financial institution, account terms, and inflation all play a crucial role in determining whether a particular CD is best for your needs and overall return.
Don’t Miss Out on Today’s High CD Rates
Now may be your last chance to lock in today’s high CD rates. Compare the best CD rates available today and ensure you’re earning the best rate possible.
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