Top CD rates today: February 12, 2025 | Highest rates still outpace sticky inflation

It was announced today that inflation rose in January to a year-over-year level of 3 percent, up from 2.9 percent in December. This marks the fourth consecutive month of increases in the consumer price index (CPI), a commonly used measure of inflation. The Federal Reserve considers an annual rate of 2 percent inflation as a sign of a healthy economy, and inflation is one of the factors it considers when setting its key borrowing rate.

What the greater economy means for rates on certificates of deposit (CDs) is that banks often change their annual percentage yields (APYs) in lockstep with the federal funds rate. As such, we’ve seen decreases in many CDs’ APYs both before and after the Fed’s three rate cuts in 2024. Policymakers decided to leave this key rate unchanged when they met in January, however, and we may see stability when it comes to some competitive CD APYs, as a result.

This week, top CD rates have held steady, after a few decreases took place earlier in the month. The table below shows top CD rates for the most common terms, as well as national averages and the amount you can earn in interest with a $5,000 deposit.

Today's top CD rates by term

Note: Annual percentage yields (APYs) shown are as of February 12, 2025. APYs for some products may vary by region.

N/A: Not available; Bankrate doesn’t track national averages for the 9-month CD term due to limited available data. Estimated earnings are based on the highest APYs and assume interest is compounded annually.

What to do about falling CD rates

Last year, many banks lowered their CD rates leading up to the September Fed rate cut, and various top rates have been decreasing since then. In total the federal funds rate was reduced three times in 2024, while policymakers chose to hold the benchmark rate steady at their most recent meeting in January.

Even though we’ve seen top CD rates fall for months, competitive CDs are still earning historically high yields. In fact, these rates continue to outpace the rate of inflation. This means your money in a high-yielding CD isn’t losing purchasing power at this time. Opening a fixed-rate CD now ensures you’ll earn the same APY until the CD matures.

How inflation impacts monetary policy

After holding its key benchmark rate steady since July 2023 to combat high inflation, officials cut the federal funds rate by a combined total of one percentage point, or 100 basis points, in three recent rate-setting meetings. The rate cuts came at a time when the consumer price index (CPI), a measure of inflation, had been decreasing significantly from its decades-high annual rate of 9.1 percent in June 2022. However, in recent months, inflation has been ticking back up, and it's currently at 3.0 percent.

Policymakers decided to hold the federal funds rate steady in January.

The current rate of inflation is a significant factor that affects what the Fed decides to do with rates. A decrease in the federal funds rate, say close to or below the current inflation rate of 3.0 percent, can be bad for savers. Namely, it can translate to lower APYs on many CDs and savings accounts. Meanwhile, a fed rate cut can be good for borrowers as interest rates tend to decrease on loans.

CD glossary

Here are some terms you’ll likely come across when choosing a CD.

• Add-on CD: An add-on CD enables you to make additional deposits after your initial investment. This feature affords more flexibility than traditional CDs, which only allow one deposit at the beginning of the term.
• Annual percentage yield (APY): A percentage that indicates how much interest a CD earns in one year, which takes into account the effect of compounding.
• Brokered CD: A type of CD issued by a bank but sold through a brokerage firm or other financial institution.
• CD ladder: An investment strategy that involves purchasing multiple CDs with varying maturity dates to provide liquidity and take advantage of higher rates.
• Early withdrawal penalty: A fee charged if funds are withdrawn from a CD before the maturity date. Penalties often range anywhere from 90 days to 365 days’ worth of interest.
• Grace period: A specific time after the maturity date during which an account holder can make changes to the CD without penalties. A grace period typically ranges from five to 14 days.
• IRA CD: A CD that’s held within an individual retirement account.
• Minimum opening deposit: The lowest amount of money required to open a CD account, which can vary by institution. Some institutions don’t have a minimum deposit requirement.
• No-penalty CD: A type of CD that allows you to withdraw your money without facing a penalty while providing a fixed APY.
• Promotional CD: Also known as a bonus or special CD, it’s a CD with an above average APY. These may be offered by banks and credit unions as a way to obtain new customers.
• Jumbo CD: A CD that has a high minimum balance requirement, typically $100,000, sometimes as low as $95,000. This type of CD tends to offer a higher interest rate than regular CDs with the same term.
• Bump-up CD: Also known as a “raise-your-rate CD,” a bump-up CD provides savers with the option to increase the CD’s APY without having to change its term. Generally, only one rate increase is allowed during its term.

• Research methodology

  Bankrate calculates and reports the national average APYs for various CD terms. Factored into national average rates are the competitive APYs commonly offered by online banks, along with the very low rates often found at large brick-and-mortar banks.

  In June 2023, Bankrate updated its methodology that determines the national average CD rates. For the process, more than 500 banks and credit unions are now surveyed each week to generate the national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.