The Federal Reserve is widely expected to lower its benchmark rate on Wednesday, and many consumers are paying close attention. Whether you’re a saver, an investor or a borrower, your finances would likely experience a ripple effect from a lower federal funds rate.

For instance, savers have enjoyed high yields on savings accounts and certificates of deposit (CDs) in recent years, thanks to a federal funds rate that gradually increased to its current 23-year high. Just as many banks raised their annual percentage yields (APYs) in lockstep with Fed rate hikes, they’re likely to lower their APYs if the Fed cuts rates.

During a falling-rate environment, one bright spot for savers can be fixed-rate CDs. By locking in a high rate now, you’ll continue to earn that APY throughout the CD’s term, even if your bank starts to lower the yields on new CDs it issues. If you’re in the market for a high-yield CD, read on for options of various term lengths, all available from well-rated, federally insured banks and credit unions.

Quontic Bank: 6-month CD

APY: 5.10%

Minimum deposit requirement: $500

Interest you’d earn with a $10,000 deposit: $252

Bankrate’s rating of Quontic Bank’s CDs: 3.8 stars out of 5

Bankrate’s overall rating of Quontic Bank: 4.7 stars out of 5

Additional details: Quontic Bank currently offers the highest-earning six-month CD, among all banks monitored by Bankrate. It requires a relatively low minimum deposit of $500. Note that if you need access to your money before the six-month term expires, the early withdrawal penalty will be equal to the interest for the full length of the term.

CIBC Bank USA: 1-year CD

APY: 5.06%

Minimum deposit requirement: $1,000

Interest you’d earn with a $10,000 deposit: $506

Bankrate’s rating of CIBC Bank’s CDs: 4.5 stars out of 5

Bankrate’s overall rating of CIBC Bank USA: 4.3 stars out of 5

Additional details: CIBC Bank USA currently offers the highest yield among all one-year CDs Bankrate monitors. Its minimum deposit requirement falls in line with what various other banks require. In total, the bank offers six terms of CDs, all of which earn competitive yields.

Bask Bank: 2-year CD

APY: 4.50%

Minimum deposit requirement: $1,000

Interest you’d earn with a $10,000 deposit: $920

Bankrate’s rating of Bask Bank’s CDs: 4.4 stars out of 5

Bankrate’s overall rating of Bask Bank: 3.9 stars out of 5

Additional details: Bask Bank is an online-only bank that offers six terms of CDs, all of which earn competitive APYs. Term lengths range from three months to two years. Note that your CD may be closed if you don’t fund it within 10 business days.

Synchrony Bank: 3-year CD

APY: 4.15%

Minimum deposit requirement: $0

Interest you’d earn with a $10,000 deposit: $1,297

Bankrate’s rating of Synchrony Bank’s CDs: 4.9 stars out of 5

Bankrate’s overall rating of Synchrony Bank: 4.3 stars out of 5

Additional details: Synchrony Bank offers a competitive rate on its three-year CD, as well as many of its other CD terms. Unlike many other banks, Synchrony doesn’t require any minimum deposit amount for its CDs (or for its savings or money market accounts). In addition to nine terms of standard CDs, it offers an 11-month no-penalty CD and a two-year bump-up CD. 

Alliant Credit Union: 5-year CD

APY: 4.00%

Minimum deposit requirement: $1,000

Interest you’d earn with a $10,000 deposit: $2,167

Bankrate’s rating of Alliant Credit Union’s CDs: 4.7 stars out of 5

Bankrate’s overall rating of Alliant Credit Union: 4.6 stars out of 5

Additional details: Alliant Credit Union offers one of the top APYs on a five-year CD, along with a relatively manageable minimum opening deposit requirement. For many of its eight CD terms, Alliant pays a slightly higher APY when you deposit $75,000 or more. Alliant makes it easy to become a member, based on where you live or work, or you can also join by making a nominal donation to a cause Alliant supports.

Note: The above CD rates are accurate as of Sept. 16 and are subject to change at any time.

Things to consider when choosing a CD

Three important factors to keep in mind when shopping around for a CD include APY, term length and minimum deposit requirement.

APY

APY is a percentage that indicates how much interest your account will earn in a year, including compound interest — which is the interest you’ll earn on interest.

It pays to shop around for a CD that earns a high APY, considering competitive banks are offering rates several times greater than average CD rates. For instance, the average APY on a one-year CD is currently 1.78 percent, while you can find APYs of up to 5.06 percent from competitive online banks.

What does this translate to in dollars? For instance, putting $10,000 into such a top-earning one-year CD could earn you over $500 more in interest than depositing that amount into a one-year CD that pays a rock-bottom APY of 0.01 percent.

Term length

In addition to looking for a CD that earns a high yield, it’s important to choose a term length with which you’re comfortable. Only lock money into a CD that you’re sure you won’t need access to before the CD’s maturity date. Otherwise, you’ll likely be subjected to an early withdrawal penalty that could eat away at your interest and possibly even some principal.

When choosing a term length, consider when you’ll want to access the funds again. For instance, if you plan to purchase a home in two years, an 18-month CD could be a way to earn some interest on money for your down payment. 

A no-penalty CD is an option that provides a fixed APY and doesn’t charge a penalty for early withdrawals. However, note you’ll likely be earning a lower yield than you would from a standard CD.

Minimum deposit requirement

Many CDs require a set minimum deposit amount, and this varies from bank to bank. Synchrony Bank, which we listed above, doesn’t require any set minimum deposit amount. Other banks require minimum amounts of $500, $1,000 or $2,500, and some even require you to deposit at least $10,000.

One perk of a fixed-rate CD is you can determine up front exactly how much money the CD will be worth when it matures. Bankrate’s CD calculator can come in handy in figuring out this amount.

Similar to considering a CD’s term length, determine up front how much you’re comfortable locking away in a CD. If you’ll need the money sooner for emergencies or to pay for living expenses, the money is better off in a liquid savings account.

Bottom line

CD rates have been decreasing slightly in 2024, as banks anticipate the Fed lowering its benchmark rate. However, competitive CD APYs remain higher, overall, than they’ve been in years. In fact, some CD watchers refer to 2024 as the year of the CD.

Locking in a fixed-rate CD now that earns a high yield, on a term you’re comfortable with, allows you to benefit from that APY until the CD matures — even if banks continue to lower their rates on new CDs.