Top CD rates today: February 3, 2025 | Leading 1-year APY falls to 4.35%
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Key takeaways
- Today's top CD rate across terms is 4.65 percent APY, offered on a three-month term.
- For some CD terms, national averages are only yielding around one-third of the highest rates.
- After climbing for around two years, high-yield CD APYs declined throughout 2024 in response to Federal Reserve rate cuts. However, some competitive APYs could stabilize after the Fed's latest decision to leave rates untouched.
Opening a fixed-rate certificate of deposit (CD) now should give you peace of mind that your savings will continue to earn the same annual percentage yield (APY) should rates continue to retreat. APYs on competitive CDs decreased gradually in 2024, as banks anticipated the Federal Reserve could cut rates, which it did three times in recent months. However, the Fed chose to leave rates untouched at its most recent rate-setting meeting, so APYs on some competitive CDs could stabilize as a result.
As of late, the top APY across CD terms is 4.65 percent, which is offered on a three-month CD from Bask Bank and requires a minimum deposit of $1,000. You’ll find that many shorter terms are earning higher APYs than longer ones in the current rate environment.
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 best CD rates by term
| CD term | Institution offering top APY | Highest APY | National average APY | Estimated earnings on $5,000 with top APY |
|---|---|---|---|---|
| 3-month | Bask Bank | 4.65% | 1.29% | $57 |
| 6-month | CIBC Bank USA | 4.51% | 1.74% | $112 |
| 9-month | America First Credit Union | 4.40% | N/A | $164 |
| 1-year | America First Credit Union | 4.35% | 1.82% | $218 |
| 18-month | TAB Bank | 4.16% | 2.10% | $315 |
| 2-year | America First Credit Union | 4.15% | 1.60% | $424 |
| 3-year | America First Credit Union | 4.15% | 1.52% | $649 |
| 4-year | America First Credit Union | 4.20% | 1.69% | $894 |
| 5-year | America First Credit Union | 4.25% | 1.52% | $1,157 |
Note: Annual percentage yields (APYs) shown are as of February 3, 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.
When is a CD a good idea?
A CD can be a good option when you find one with a competitive rate and you can afford to lock in the money for the entire term. Most CDs charge an early withdrawal penalty for taking out the money before the maturity date. An upside to such a penalty structure is you’ll be less tempted to withdraw the money early and use it for impulse purchases.
How the current rate environment impacts CDs
Recent federal funds rate changes: The Federal Reserve chose to leave its benchmark rate untouched at its January 2025 meeting, after having lowered the rate three times in recent months. The federal funds rate currently stands at a target range of 4.25-4.5 percent.
What this means for deposit accounts such as CDs: Yields on competitive savings accounts and CDs tend to move in lockstep with the Fed’s interest rate moves. As such, many banks increase their yields when the Fed raises rates, and they lower yields when the federal funds rate drops. The Fed’s latest decision to hold rates steady could mean APYs on competitive CDs stabilize, for now.
Prior to the September 2024 rate cut, the Fed had held rates steady since July 2023, after gradually raising them 11 times in 2022 and 2023. Meanwhile, top CD APYs peaked in late 2023 and have since been decreasing gradually, as illustrated below.
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.