Could the Best CD Rates Drop Below 4% After the Next Fed Meeting? Today’s CD Rates. Dec. 9, 2024
- For six-month CDs, you can still lock in up to 4.70% APY.
- Opening a CD today protects your interest rate, so you don’t have to worry about your income being reduced if the Fed cuts interest rates next week.
- Currently, short-term CDs have a higher APY than long-term CDs.
The Federal Reserve will meet in a little over a week. There has been much speculation about what the central bank will do next, but most experts are leaning towards another 25 basis point rate cut. This means you can see the rates savings and certificate of deposit Entering the new year, I’m stuck again.
If you have savings that you don’t need to touch for a year or more, putting that money into a term deposit allows you to lock in a fixed interest rate. Some banks offer CD rates between 4.15% and 4.70% depending on the term, but the average APR has slipped to 4.15%.
Opening a CD now allows you to lock in your interest rate so that even if interest rates drop, you won’t miss out on interest.
Here are the top CD rates right now, and how much you can earn by depositing $5,000, according to the banks we track at CNET.
Today’s Best CD Rates
| semester | Maximum annualized interest rate* | bank | Estimated revenue |
|---|---|---|---|
| 6 months | 4.70% | Bread savings and rising banks | $117.50 |
| 1 year | 4.45% | community federal credit union | $222.50 |
| 3 years | 4.15% | America’s First Credit Union | $648.69 |
| 5 years | 4.25% | America’s First Credit Union | $1,156.73 |
Experts recommend comparing interest rates before opening a CD account to get the best possible annual return. Enter your information below to get the best prices in your area from CNET partners.
How another Fed rate cut will affect deposit rates next year
The Fed does not directly set deposit rates, but it does control the federal funds rate. The federal funds rate is the overnight lending rate that banks charge each other to borrow funds. When the federal funds rate falls, interest rates on consumer products such as CDs fall. savings account interest rate tend to follow.
After the Federal Reserve issued an order to raise interest rates after the epidemic, CD interest rates surged above 5% for maturities of 6 to 18 months. But deposit rates and savings rates have been falling slowly this year.
Fed September interest rate cutThis is the first rate cut since March 2020. Since then, deposit and savings rates have fallen rapidly. The average six-month CD rate started the new year at 4.92% APY, but after the rate cut in September, it fell to 4.38% APY. It fell to 4.15% last week.
If the Fed cuts interest rates on December 18, CD rates could fall further. Experts now say the Fed is likely to cut interest rates again this month unless we see a sharp rise in inflation in Wednesday’s Consumer Price Index report.
CDs are still a good place to stash savings you won’t need for a while
If you’re trying to grow your savings, there’s still time to earn a high APR. If you’ve saved money that you won’t need for a few years, you can lock in high, guaranteed returns with CDs now.
Even with another rate cut looming, a handful of CDs on our list raised their rates this week. By locking in your CD early, you’ll likely get a higher return on your money, but you’ll still earn a competitive interest rate by growing your savings. High Yield Savings Account.
Here’s how CD rates looked at the beginning of this week compared to the beginning of last week:
Here’s what you need to pay attention to when opening a CD
Competitive APY is important when comparing CD accounts, but it’s not the only factor you should focus on. To find the account that’s right for you, also consider the following:
- When you need money: Early withdrawal penalties It will eat into your interest income. So be sure to choose a term that fits your savings schedule. Alternatively, you can choose a No penalty CDalthough the APY may not be as high as a traditional CD of the same term.
- Minimum deposit requirements: Some CDs require a minimum amount to open an account, usually $500 to $1,000. Others don’t. How much money you need to set aside can help you narrow down your options.
- cost: Maintenance fees and other expenses eat into your income. many online banking There are no fees because their administrative costs are lower than banks with physical branches. However, please read the fine print of any account you are evaluating.
- Federal Deposit Insurance: Make sure any bank or credit union You are considering becoming an FDIC or NCUA member so your money is protected if the bank fails.
- Customer ratings and reviews: Check out sites like Trustpilot to find out what customers are saying about your bank. You want a bank that is responsive, professional and easy to work with.
methodology
CNET reviews CD rates based on the latest APY information from the issuer’s website. We evaluated CD rates from more than 50 banks, credit unions and finance companies. We evaluate CDs based on APY, product offerings, accessibility, and customer service.
Current banks included in CNET’s weekly CD averages include Alliant Credit Union, Ally Bank, American Express National Bank, Barclays, Bask Bank, Bread Savings, Capital One, CFG Bank, CIT, Fulbright, Marcus by Goldman Sachs, MYSB Direct, Quontic, Rising Bank, Synchrony, EverBank, Popular Bank, First Internet Bank of Indiana, First American Federal Credit Union, CommunityWide Federal Credit Union, Discover, Bethpage, BMO Alto, Limelight Bank, First National Bank of America and Connexus Credit Union.
*APY as of December 6, 2024, based on banks we track at CNET. Earnings are based on APY and assume interest compounded annually. Weekly percentage increase/decrease between December 2, 2024 and December 6, 2024.
