High APYs May Not Be Around Much Longer Following Fed Rate Cut. Today’s CD Rates, Dec. 19, 2024
- You can earn up to 4.70% APY with today’s best CDs.
- The Fed cut interest rates for the third time yesterday, which means the APY is likely to continue its downward trend.
- The earlier you open your CD, the higher interest rate you’ll be able to lock in.
yesterday, Fed cuts interest rates The gain was 25 basis points, as most experts expected. This is the third time the Fed has cut interest rates this year, and after the previous two cuts we saw a significant drop in CD rates.
you can still find Top CD Earnings as high as 4.70% – more than double national average Interest rates on certain terms. But with the latest rate cut and more expected in 2025, now is the time to lock in APY. If you wait too long, chances are you won’t find such a great deal.
Here are some of the highest CD rates available right now and how much you can earn by depositing $5,000.
Today’s Best CD Rates
| semester | Maximum annualized interest rate* | bank | Estimated revenue |
|---|---|---|---|
| 6 months | 4.70% | rise bank | $117.50 |
| 1 year | 4.47% | Nicks Bank | $223.50 |
| 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.
Why CD rates could drop with latest Fed moves
The Fed will hold its last meeting of the year on December 17th and 18th. Although it does not directly set CD interest rates, the Fed’s decisions affect how banks set APYs on CDs and consumer products such as CDs. savings account. When the Federal Reserve lowers the federal funds rate, banks tend to lower the annual interest rates on these products, and vice versa.
The Federal Reserve raised interest rates 11 times between March 2022 and July 2023 to curb post-pandemic inflation. As a result, CD rates that we track at CNET have soared, reaching a high of 5.65% annualized. But deposit rates and savings rates have been falling slowly this year.
Fed September interest rate cut — first rate cut since March 2020 — and again in 2020 November. Thereafter, fixed deposit and savings rates fell faster. At the beginning of 2024, the average annualized yield on six-month time deposits was 4.92%, but after the interest rate cut in September, it fell to 4.38%. This week it was 4.14%. We may see further declines due to yesterday’s rate cut.
Here’s how CD rates looked at the beginning of this week compared to the beginning of last week:
What happened to CD rates last week?
| semester | CNET average APY last week | CNET average APY this week** | Weekly changes*** |
|---|---|---|---|
| 6 months | 4.14% | 4.15% | 0.0024 |
| 1 year | 4.07% | 4.08% | 0.24 |
| 3 years | 3.52% | 3.52% | no change |
| 5 years | 3.46% | 3.46% | no change |
Why now is the time to open the CD
If you’re trying to grow your savings, there’s still time to earn an attractive annual interest rate. If you’ve saved money that you won’t need for a few years, you can lock in high, guaranteed returns with CDs now.
“CDs are a good, stable way to earn predictable returns while controlling the times when you can’t access your money,” says Bobbi Rebell, Certified Financial Planner® and personal finance expert. Bad Credit Network. “From a historical perspective, interest rates remain high.”
Additionally, “if the Fed takes a more aggressive approach to rate cuts in 2025, it could be advantageous to lock in CD rates now,” said Faron Daugs, CFP, founder and CEO. Harrison Wallace Financial Group.
If you need access to your funds at any time, you can also use High Yield Savings Account. HYSA is better suited for your application emergency fund Because you can withdraw cash at any time without penalty.
What to look for in 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 18, 2024, based on banks we track at CNET. Earnings are based on APY and assume interest compounded annually.
**Weekly percentage increase/decrease between December 9, 2024 and December 16, 2024.
