Seize the Opportunity: Lock in High CD Rates Before They Drop
The Federal Reserve’s recent interest rate reductions in 2024 have created a window of opportunity for savers to capitalize on high certificate of deposit (CD) rates. With rates expected to decline, now is the time to act and secure a competitive CD rate.
Competitive CD Rates Still Available
As of January 20, 2025, CD rates remain attractive, particularly for shorter terms. Several financial institutions offer rates around 4.00% APY for terms of a year or less. While longer-term CD rates are not as high, top offers still hover around 3.00%-4.00% APY for terms of three years and longer.
Top CD Rates Today
NexBank leads the pack with a 1-year CD term offering a 4.27% APY, although it requires a substantial minimum opening deposit of $25,000. Marcus by Goldman Sachs follows closely with a 1-year CD offering a 4.25% APY, requiring a minimum deposit of $500.
Why Online Banks and Credit Unions Stand Out
Online banks and credit unions generally offer more competitive rates compared to traditional brick-and-mortar banks. This is due to their lower overhead costs, allowing them to pass the savings on to customers.
National Average CD Rates
As of December 2024, the highest national average interest rate for CDs stands at 1.83% for a 1-year term. While today’s average CD rates are some of the highest seen in nearly two decades, it’s essential to choose a CD with a high APY and term length that aligns with your financial goals.
Tips for Finding the Best CD Rates
- Shop Around: Evaluate CD rates from various financial institutions and compare your options before settling on an account.
- Consider Online Banks: Online banks tend to offer higher interest rates on CDs due to lower overhead costs.
- Check Minimum Deposit Requirements: Ensure the amount you plan to deposit aligns with the requirements to get the best rate.
- Review Account Terms and Conditions: Look beyond the CD’s rate and consider terms for early withdrawal penalties and auto-renewal policies.
By following these tips and seizing the opportunity to lock in high CD rates, you can make the most of your savings and achieve your financial goals.
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