Best CD rates of January 2025 (Up to 4.65%)

CDs generally have an early withdrawal penalty for taking your money out before the CD matures. No-penalty CDs are the exception, though they may also impose a penalty if the funds are withdrawn during the first six or seven days after the account is opened.

A good CD rate depends on a few factors, but the true answer depends on your personal financial situation. If you need to access your money in a year, for example, your best CD options will be those with a one-year term or less. If you’re able to lock up your money for longer, you may be able to achieve a higher yield with a longer-term CD. In general, longer terms may pay better yields.

Knowing for sure that you won’t need your cash for a specific amount of time also typically allows you to earn a higher rate. The bank is willing to pay you more for the certainty that your money will remain in its hands for the designated length of time.

Compare CD rates to the national average to make sure you’re getting a competitive return.  For example, the national average APY for 1-year CDs is 1.79 percent as of January 30, 2025, while some top-yielding banks are currently offering one-year CDs with APYs of up to 4.52 percent.

Online banks tend to offer higher APYs than brick-and-mortar banks. These online-only institutions typically have lower overhead costs and are able to pass the savings along to their customers in the form of higher rates. In addition, unlike your bank located on the corner of Main Street, online banks may need a higher APY to get your attention and earn your business.

You can keep your money in a CD and let it renew over and over. CDs generally automatically renew. However, unclaimed CDs can be escheated — or transferred from an estate to the government — subject to each state’s laws. To avoid your CD being escheated due to being considered abandoned property, be sure to keep in touch with your bank and keep a valid mailing address on file.

Banks give account holders with CDs the opportunity to name a beneficiary, which is a person who will inherit your savings in the event that you die. While naming a beneficiary for your CD may be the last thing on your mind, experts say it’s an important step to take.

If you don’t have a beneficiary designated to receive the funds in your CD, your savings will go through probate, which is the court process for deciding what happens to the property of an individual after their death.

As long as your CD is at an FDIC-insured bank or an NCUA credit union and it’s within insurance limits and guidelines, you won’t lose money with a CD. You may lose some of your interest — and potentially some of your principal — by making an early withdrawal, however.