Top CD rates today: January 31, 2025 | Leading APY remains 4.65% after Fed rate pause

The second half of January has proven to be a stable one for certificate of deposit (CD) rates, with no changes in leading rates whatsoever. Conversely, the first half of the month saw 13 such decreases, although more than half of these were due to just one bank — Popular Direct — lowering its annual percentage yields (APYs).

The Federal Reserve’s decision this week not to cut its benchmark rate could mean continued stability for APYs on some high-yielding CDs. Regardless, locking in a rate now could be a way to hedge against any further potential drops in competitive APYs.

Check out Bankrate’s table below for the highest APY on CD terms from three months to five years, as well as how much $5,000 would earn for each term.

Today's CD rates by term

Note: Annual percentage yields (APYs) shown are as of January 31, 2025. APYs for some products may vary by region.

Note: Bankrate has made infrastructure enhancements to our national averages database as of Jan 30, 2025, resulting in quality improvements to the products included in our calculations.

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.

Locking in a CD rate now could benefit you down the line

An upside of putting your funds into a guaranteed-rate CD is you’ll continue to earn the fixed APY for its entire term, even if the bank lowers the yields on new CDs it issues in the meantime. Rates on competitive CDs are currently outpacing inflation, which is currently at a rate of 2.9 percent.

The Fed cut its benchmark rate three times in 2024, on Sept. 18, Nov. 7 and Dec. 18, for a total of a full percentage point, or 100 basis points. In January 2025, however, officials chose to hold the federal funds rate at its current target range of 4.25 to 4.5 percent. It remains to be seen whether policymakers will choose to lower rates further in 2025. The next rate-setting meeting is scheduled for March 19, 2025.

What the current rate environment means for CDs

Recent federal funds rate changes: The Federal Reserve left its benchmark interest rate untouched at its January 2025 meeting, 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. Prior to the 2024 rate cuts, the Fed had gradually raised rates 11 times in 2022 and 2023, and rates stood at a 23-year high leading up to the September 2024 cut.

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. While competitive CD rates have been decreasing for more than a year, the recent pause in rate cuts could mean the APYs on some CDs stabilize.

Prior to the September 2024 rate cut, the Fed had held rates steady since July 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.

• 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.