Certificates of deposit are paying rates that most savings accounts simply cannot match right now, and unlike a savings account, a CD's annual percentage yield stays locked for the entire term you choose, so the return you sign up for is the return you get, regardless of what the Federal Reserve does next.
Why the Timing Matters
That fixed nature is the whole appeal at this moment. The Fed is widely expected to cut its benchmark rate at some point this year, with additional cuts projected into 2026. Some forecasts suggest rates could fall by a full percentage point or more by the end of next year. Once that happens, savings account yields and new CD offers will likely follow rates downward. A CD opened today locks in today's yield no matter what the Fed decides later.
The Fed's next meeting runs July 29 and 30, and most observers expect another hold. But markets will parse the statement and Fed Chair Jerome Powell's press conference for hints about the following meeting, September 16 and 17. Any signal that a cut is coming could push banks and credit unions to trim CD rates preemptively, since institutions don't want to be stuck paying out a rate they'll regret in a few months.
Right now, dozens of nationwide CDs are still paying in the mid 4% range. Every major term currently offers at least 4.28%, and the top nationwide rate sits at 4.60% APY on a 19 month term, which would lock that yield in through February 2027.
Shopping Around Still Pays Off
CD rates vary enormously by institution, and that gap is where savers either win or lose. Large, familiar banks such as Chase and Bank of America routinely offer CD rates close to zero, while smaller banks and credit unions tend to sit at the top of the rate tables.
| CD Term | National Average APY | Top Available APY |
|---|---|---|
| 1 year | 1.62% | 4.50% |
| 19 months | N/A | 4.60% |
| All major terms | Varies, generally low | 4.28% to 4.60% |
The national average on a 1 year CD from an FDIC insured bank is currently 1.62%. Shopping around can get you a rate more than two and a half times higher, with the best 1 year CD paying 4.50%, and the nationwide leader, a 19 month CD, paying 4.60%.
Brian Kearns, a certified financial planner at Haddam Road Advisors, points out that CDs work well for money you want parked somewhere productive without market risk.