Take Advantage of High CD Rates Before They Drop
The Federal Reserve’s recent decision to lower the federal funds rate for the third time this year has sent deposit account rates tumbling. But there’s still time to lock in a competitive return on a certificate of deposit (CD) and preserve your earning power.
CD Rates Remain Attractive
Despite the decline, CD rates remain high by historical standards, especially for shorter terms. You can find rates of 4.00% APY or higher for terms of about one year and under. Even longer-term CDs offer attractive rates, with the best available rates hovering near 3%-4% APY for terms of three years or more.
Top CD Rates Available Today
NexBank offers the highest CD rate of 4.27% APY on its 1-year CD term, although it requires a minimum opening deposit of $25,000. Marcus by Goldman Sachs and Synchrony Bank follow closely with rates of 4.25% APY on their 1-year and 13-month CD terms, respectively.
Why CD Rates Are Falling
CD rates are tied to the federal funds rate, which means they usually follow the Fed’s target rate. With the Fed’s recent rate cuts, CD rates have begun to fall. Experts predict additional rate cuts in 2025, making now a crucial time to lock in today’s higher CD rates.
Is a CD Right for You?
Before investing in a CD, consider the following factors:
- Interest Rates: CDs are more attractive when interest rates are high or trending downward, as they lock in the current rate for the entire term.
- Financial Goals: CDs are a safe investment choice for preserving capital and earning a steady return, but may not be suitable for long-term goals like retirement.
- Liquidity Needs: CDs require locking in your money for a set period, so consider your liquidity needs before investing.
Where to Find the Best CD Rates
Look beyond your current bank to find the best CD rates. Online banks, credit unions, and community banks often offer more competitive rates than traditional brick-and-mortar banks. Compare multiple CD account options to find the best fit for your needs.
Don’t Miss Out on High CD Rates
With CD rates trending down, now is the time to take advantage of today’s higher rates. Research and compare CD options to find the best fit for your financial goals and needs.
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