Top CD rates today: January 29, 2025 | What today’s Fed rate cut pause means for CDs

Today, policymakers decided to leave the Federal Reserve’s key benchmark rate untouched. This pause takes place after three consecutive rate cuts in recent months, which gradually brought down the federal funds rate to where it currently stands at a range of 4.25-4.5 percent.

Rates on competitive certificates of deposit (CDs) have been decreasing steadily for more than a year, both leading up to and after each of the Fed rate cuts in 2024. A Fed rate cut pause could mean that annual percentage yields (APYs) on some CDs hold steady. Savers can still lock in historically high CD rates.

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

Note: Annual percentage yields (APYs) shown are as of January 29, 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 going on with CD interest 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, although market watchers expect policymakers to hold rates steady today and possibly again in March. Despite recent decreases in APYs, competitive CD rates continue to outpace the rate of inflation, which currently stands at 2.9 percent.

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.