What's a good CD interest rate after the Fed cut rates?
Borrowers who saw some slight but noticeable relief last month after the Federal Reserve cut interest rates are in store for additional help in the weeks and months ahead. Not only is another interest rate cut widely expected for when the central bank meets again on October 29, but a third one is now anticipated for the Fed's final 2025 meeting in December, too. That will make borrowing costs more manageable on everything from personal loans and credit cards to mortgages and home equity borrowing products.
Savers, however, may want to be proactive now. Rates on high-interest earning vehicles like certificate of deposit (CD) and high-yield savings accounts are already noticeably lower than they were at this point in 2024 and they're likely to fall further alongside a declining federal funds rate. At the same time, rates here are still exponentially higher than what savers can secure with a traditional savings account, and, with a CD specifically, they can lock in a high rate to protect against rate reductions still to come.
To better understand which CD rate is worth locking, however, it helps to know what a "good" CD rate is considered to be now, after the Fed cut rates and before the bank does so again. Below, we'll break down what savers should consider now.
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What's a good CD interest rate after the Fed cut rates?
The 6% and 7% CD rates that some savers were eligible for in recent years are long gone. But that doesn't mean you can't still find a good rate with one of these accounts, especially if you look at short-term CDs, which mature in under a year. Here are some of the top rates that savers can still find now, all of which are considered good in today's cooling rate climate:
- 3-month CDs: 4.10%
- 6-month CDs: 4.30%
- 9-month CDs: 4.15%
- 1-year CDs: 4.20%
- 18-month CDs: 4.05%
- 2-year CDs: 4.00%:
- 3-year CDs: 3.95%
- 5-year CDs: 4.00%
While these rates aren't as profitable as they once were, they're still elevated, especially compared to the start of the decade when rates were hovering around 1% or lower. Still, waiting to act doesn't make sense, either. Rates here have likely peaked for this cycle, so it behooves savers who are still interested in this unique savings account to get started quickly.
Get started with a top CD account online now.
Look to online banks
In a different interest rate climate, in which high-rate CD accounts are ubiquitous, you can find a profitable account at your local banking branch. But with rates declining again, savers may need to do a bit more shopping around, and that likely extends to finding CDs with online banks instead. Online lenders tend to offer higher rates on these accounts than their counterparts with physical locations, so take the time to find one that has the right rate and term for your needs now.
The bottom line
Savers can still find CD accounts with rates around 4% or higher now, especially if they utilize an online bank. But with rate cuts looming for the final weeks of the year, time is running out to secure a high-rate CD. So, calculate your interest-earning potential, shop around for rates online and get started promptly. And remember to only deposit an amount in an account with a term that you can easily complete until maturity to avoid having to pay an early withdrawal penalty.