Top CD rates today: January 22, 2025 | The clock is ticking on high APYs

A certificate of deposit (CD) can be a useful tool for meeting your savings goals. Whether you’re saving to buy a house, a new car or your dream vacation, a CD allows you to calculate up front exactly how much interest you’ll have earned when the term is up. This is possible due to a CD’s fixed annual percentage yield (APY).

Today, highest APY across CD terms remains 4.51 percent, which is available on a six-month CD. In total, 13 decreases in highest APYs have taken place in the month of January, to date. Highest APYs continue to outpace inflation, however, and locking in a rate on a CD now ensures you'll continue to earn that rate until the CD matures — even if going rates on new CDs fall further.

Bankrate’s table below shows the highest yields offered on widely available CDs, by term. It also lists national average CD rates and how much you’d earn for each term with a $5,000 investment.

Today's top CD rates by term

Note: Annual percentage yields (APYs) shown are as of January 22, 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’s been happening with CD rates?

Rates on high-yield CDs started falling in late 2023 and early 2024 as banks anticipated Federal Reserve rate cuts. The APYs banks offer on deposit accounts tend to move in lockstep with the federal funds rate. Top yields continue to decrease in the wake of three Fed rate cuts in 2024, and it remains to be seen how much further, and how quickly, APYs will go down.

However, competitive CD rates continue to outpace the rate of inflation, which currently stands at 2.9 percent. "Now is a good time to open a CD so you can lock in a solid rate and start earning on your savings sooner," says Louise Eisenach, vice president of savings and deposits at Capital One. "While future interest rates will in part remain up to the Fed, opening a CD now can help you lock in a strong rate to earn guaranteed returns on savings you don’t need immediate access to."

What is the impact of inflation on 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. These moves come at a time when the consumer price index (CPI), a measure of inflation, has decreased significantly, overall, from its decades-high annual rate of 9.1 percent in June 2022. It’s currently at 2.9 percent.

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 2.9 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.