This weekend is your final opportunity to secure current certificate of deposit rates before the upcoming Federal Reserve meeting. While experts anticipate that rates will remain stable, taking advantage of a CD now eliminates any uncertainty by ensuring your earnings are locked in regardless of the Fed’s decision. With yields as high as 4.40% APY available until the end of the weekend, CDs offer returns that far surpass the national average of 0.41% on standard savings accounts. These rates are fixed for the entire term, providing a reliable source of income you can depend on.
Most banks offer convenient online applications that can be completed in minutes, with many requiring no initial deposit to get started. If you prefer to keep your funds accessible, you may want to consider a CD ladder to maintain periodic access or a no-penalty CD that allows you to withdraw your savings whenever needed.
Discover the strongest rates for FDIC-insured CDs available this weekend across various terms, offering guaranteed returns that won’t be affected by next week’s Federal Reserve meeting. Today’s top savings rates are offered by FDIC-insured digital banks and online accounts, with rates reaching up to 4.40% APY at Bread Financial, Alliant Credit Union, and other reputable providers as of Friday, May 2, 2025.
– Bread Financial Savings CDs: 4.40% APY on 6-month terms with a $1,500 minimum
– Valley Bank Online CDs: Up to 4.30% APY on 3-month terms with a $25,000 minimum and 3.90% APY on 12-month terms with a $500 minimum
– Alliant Credit Union CDs: 4.10% APY on 6-month terms with a $1,000 minimum
– Discover Bank CDs: 4.00% APY on 12-month terms with no minimum
– American First Credit Union CDs: 4.00% APY on 12-month terms with a $1 minimum
– Barclays Bank Online CDs: 4.00% APY on 12-month terms with no minimums
– CIT Bank No-Penalty CD: 3.50% APY on an 11-month term with a $1,000 minimum
Although online-only banks and digital accounts may not be as widely recognized as larger institutions, each is FDIC-insured or works with an FDIC-insured bank to offer protected deposit accounts up to $250,000, just like your local bank.
For more information on smart financial strategies before and after Fed rate adjustments, as well as a detailed explanation of how a certificate of deposit functions, refer to the information provided above.
Compare the national deposit rates between April and March 2025 for traditional low-interest deposit accounts:
– Savings: 0.41% in April and 0.41% in March, no change
– Interest checking: 0.07% in April and 0.07% in March, no change
– Money market: 0.62% in April and 0.63% in March, down 1 basis point
– 1-month CD: 0.24% in April and 0.25% in March, down 1 basis point
– 3-month CD: 1.42% in April and 1.43% in March, down 1 basis point
– 6-month CD: 1.60% in April and 1.61% in March, down 1 basis point
– 12-month (1 year) CD: 1.77% in April and 1.78% in March, down 1 basis point
– 24-month (2 year) CD: 1.49% in April and 1.49% in March, no change
– 36-month (3 year) CD: 1.35% in April and 1.35% in March, no change
– 48-month (4 year) CD: 1.27% in April and 1.27% in March, no change
– 60-month (5 year) CD: 1.34% in April and 1.34% in March, no change
Looking back over the past year, there has been minimal movement in traditional savings account rates, with more significant changes in short- and long-term CD rates. The FDIC oversees consumer deposit accounts, aiming to maintain stability and public confidence in the U.S. financial system.
For retirees seeking low-risk investments with steady returns, CD rates are influenced by the Federal Reserve’s key interest rate. The Fed recently paused rate cuts, holding the federal funds target interest rate steady at 4.25% to 4.50%. The next policy meeting is expected to maintain these rates, with a focus on economic growth and inflation management.
Regarding the timing of future cuts to the Fed rate, recent data has shown a decrease in inflation from a peak of 9.1% in June 2022 to rates fluctuating between 2.5% and 4% since May 2023. New jobs data released on April 4 by the Bureau of Labor Services revealed that employers added 228,000 jobs in March, surpassing expectations and exceeding the 151,000 added in February. The unemployment rate in March rose slightly to 4.2% from 4.1% in February, remaining within a narrow range of fluctuations since May 2024.
The consumer price index released on April 10 indicated that the annual inflation rate eased to 2.4% in March, lower than forecast and down from 2.8% in February. Overall prices decreased by 0.1% for the month, driven by lower energy costs such as a 6.3% drop in gasoline prices and reduced travel expenses. Similarly, the producer price index released on April 11 showed a 0.4% decline in wholesale prices in March, with gasoline prices plunging 11.1%. The annual increase in the PPI slowed to 2.7%, suggesting a moderation in inflation.
Federal Reserve Chair Jerome Powell, speaking in Chicago on April 16, acknowledged the challenges posed by President Trump’s tariffs on the Fed’s future policy decisions. Powell stated that the Fed is currently positioned to wait for more clarity before considering any adjustments to their policy stance. The rate-setting panel led by Powell will announce a rate decision at the conclusion of its meeting on Wednesday, May 7, 2025, at 2 p.m. ET.
To better understand the next Federal Reserve meeting and its potential impact on finances, it is important to compare various factors when choosing a certificate of deposit (CD). Consider the term length, rate of return, minimum deposit requirements, and the type of bank or financial institution offering the CD. Additionally, be aware of any penalties or fees associated with early withdrawal from the CD.
CDs, or certificate of deposit accounts, offer a range of terms spanning up to 24 months, with penalty fees typically increasing for longer terms. While breaking a CD may incur fees, it is worth considering in certain situations. Benefits of CDs include guaranteed returns with a fixed interest rate, higher rates compared to traditional accounts, and a variety of term options to align with financial objectives. However, drawbacks include penalties for early withdrawals, potentially lower returns compared to other investment options, and restrictions on adding funds once the CD is locked. Alternatives to CDs include high-yield savings accounts, money market accounts, and higher-risk investments like stocks and mutual funds. Banks earn money with CDs through the interest rate spread between lending and deposit accounts. Stay informed about CD maturity dates through notifications from your bank and consider various financial strategies to optimize your savings and investments.
A certificate of deposit (CD) is a financial product that requires you to lock in your deposit over a specified period of time, in exchange for earning interest on your principal amount. Unlike regular savings accounts that allow movement of your money without penalty, a CD is designed to be held until maturity, at which point you receive your initial deposit along with the accrued interest. This lock-in period, along with penalties for early withdrawal, enables banks to plan their investments better and offer slightly higher interest rates for the increased reliability.
Is it safe to keep your money in an online-only bank such as Lending Club or SoFi? Yes, online-only banks and digital accounts are just as safe as traditional banks. They are either FDIC-insured chartered banks or partner with well-known banks to provide deposit accounts that are protected by the government for up to $250,000. The FDIC ensures the safety of your funds, even in the event of the fintech company facing financial difficulties. When comparing options, look for terms like “member FDIC,” “FDIC insured,” or “NCUA insured.”
Compound interest is the concept of earning interest not only on your initial deposit but also on the accumulated interest over time. It is a powerful tool for growing your savings exponentially and accelerating progress towards your financial goals. The Annual Percentage Yield (APY) represents the total interest earned on your deposit over one year, inclusive of compound interest, expressed as a percentage.
A jumbo CD is a type of certificate of deposit that requires a minimum deposit of $100,000 to open. Similar to regular CDs, jumbo CDs offer a fixed interest rate and term. Historically, jumbo CDs provided a way for individuals and businesses to invest large sums of money at higher rates than traditional CDs. However, with current interest rates at historic highs, the assumption that jumbo CDs always offer higher rates may not hold true. It is advisable to compare rates before investing in a jumbo CD.
A no-penalty CD, also known as a liquid CD, is similar to a traditional CD but allows you to withdraw your funds before maturity without incurring penalties. While this flexibility is beneficial, it typically comes with lower rates of return compared to traditional CDs. With interest rates currently elevated, a high-yield savings account might offer comparable or higher rates than a no-penalty CD with greater flexibility.
A CD ladder is a savings strategy that involves spreading your funds across multiple CDs with varying maturity dates to take advantage of higher interest rates without locking in your entire investment into a single long-term CD. By creating a CD ladder, you gain access to a portion of your funds at regular intervals while benefiting from rolling returns. This approach allows you to secure the best rates available without being fully committed to a single term.
Lastly, a brokered CD is a type of certificate of deposit that is purchased through a brokerage firm rather than directly from a bank or credit union. Similar to traditional CDs, brokered CDs offer
Explore brokered CDs, whether new or “used” from other investors, for your investment account. Understand the differences between saving and investing, where saving involves secure accounts with minimal risk while investing entails purchasing assets like stocks, bonds, or mutual funds for potentially higher returns. Discover the best strategy for your nest egg in our saving and investing guide. Please note that APYs shown were accurate as of Friday, May 2, 2025, at 7 a.m. ET and may vary by region. Sources include FDIC for National Rates and Rate Caps, U.S. Bureau of Labor and Statistics for Consumer Price Index Summary and Producer Price Index News Release, and CME Group for Employment Situation Summary and CME FedWatch Tool.
