As the Federal Reserve wraps up its policy meeting today, take advantage of a unique opportunity to secure steady returns, regardless of the outcome. Certificates of Deposit (CDs) offer fixed rates of up to 4.75% APY for guaranteed returns that remain unchanged throughout the CD’s term, regardless of the Fed’s future monetary policy decisions. This means the competitive yield you lock in today will continue to earn the same interest percentage, even if market rates drop in the future. Protect a portion of your savings from potential rate decreases with the assurance of knowing exactly what your money will earn at maturity. Your deposits and interest earned are FDIC-insured up to $250,000, offering additional peace of mind.
To maintain flexibility with your funds, consider a CD ladder strategy that spreads your deposits across multiple maturity dates. This strategy allows regular access to portions of your savings while capitalizing on today’s highest rates. Alternatively, combine laddered CDs with a high-yield savings account to retain liquidity for unexpected expenses while maximizing returns on long-term savings.
Whether you are saving for upcoming expenses or looking to diversify your investment portfolio with stable returns, discover the best CD rates for terms of 10 months or longer today. Access simple online signup processes and low or no minimum deposits to secure today’s top yields.
Today’s leading CD rates:
– Bread Financial Savings CDs: 4.50% APY on a 6-month term with a $1,500 minimum
– Valley Bank Online CDs: Up to 4.30% APY with a $25,000 minimum
– Alliant Credit Union CDs: 4.25% APY on a 12-month term with a $1,000 minimum
– Discover Bank CDs: 4.10% APY on 24-month terms and 4.00% APY for 12-month terms
– American First Credit Union CDs: 4.10% APY on a 12-month term with a $1 minimum
– Barclays Bank Online CDs: 4.00% APY on 12-month terms with no minimums
– CIT Bank CDs: 3.50% APY 11-month no-penalty CD
Discover more top CD rates by sorting results based on APY for yields or term to align with your financial objectives. Rest assured that online-only banks and digital accounts, although less familiar, offer FDIC-insured deposit accounts protected for up to $250,000 by the FDIC or NCUA, similar to traditional banks.
Learn more about smart financial moves before and after Fed rate cuts and explore how CDs function as a secure method to earn higher yields over fixed terms.
Explore further: Understanding how Certificates of Deposit work to enhance your savings, including a comprehensive overview of 7 different types of CDs.
Conventional CD Rates
The Federal Deposit Insurance Corporation (FDIC) monitors the monthly average interest rates earned on certificates of deposit and similar savings accounts. Established by Congress, the FDIC is an autonomous government entity tasked with upholding stability and public trust in the U.S. financial system, as well as providing insurance on consumer deposit accounts.
Comparing FDIC national deposit rates on a $10,000 minimum deposit from January to February 2025 for traditional low-interest deposit accounts reveals the following changes:
Savings and Deposit Account Rates
– National deposit rate on March 17, 2025: 0.41%
– National deposit rate on February 18, 2025: 0.41%
– Month-over-month change: No change
Interest Checking
– National deposit rate on March 17, 2025: 0.07%
– National deposit rate on February 18, 2025: 0.07%
– Month-over-month change: No change
Money Market
– National deposit rate on March 17, 2025: 0.63%
– National deposit rate on February 18, 2025: 0.64%
– Month-over-month change: Down 1 basis point
1-Month CD
– National deposit rate on March 17, 2025: 0.25%
– National deposit rate on February 18, 2025: 0.22%
– Month-over-month change: Up 3 basis points
This article provides insights into the role of the FDIC in safeguarding the financial sector and outlines the adjustments in deposit rates between January and February 2025. Further analysis delves into the prudent investment choices for retirees seeking secure returns on their savings. Additionally, it examines the correlation between CD rates and the Federal Reserve’s key interest rate, shedding light on the impact of Fed decisions on various financial products.
Upcoming Changes and Updates until May:
Ahead of the Federal Reserve’s upcoming policy meeting on March 18–19, 2025, it is anticipated that there will be no adjustments to the current Fed rate of 4.25% to 4.50%. Market expectations remain high with a 99% likelihood that rates will stay unchanged. Economists are closely monitoring inflation and labor data, speculating on the timing of potential future rate cuts. Recent reports show a decline in inflation rates from a peak of 9.1% in June 2022 to a range of 2.5% to 4% since May 2023. A recent labor report indicated a rise in unemployment to 4.1% in February, with employers adding 151,000 jobs, falling slightly below expectations. Additionally, the latest consumer price index revealed a decrease in the annual inflation rate to 2.8% in February, alleviating concerns about economic health. Federal Reserve Chair Jerome Powell emphasized the stability of the US economy during a recent policy forum, stating a cautious approach to potential policy changes. The rate-setting panel led by Powell will announce their decision on Wednesday, March 19, 2025, at 2 p.m. ET.
Further Information:
For more details on the upcoming Federal Reserve meeting and its impact on your finances, consider the following factors when comparing certificate of deposit (CD) options:
Term Length: Choose a term length based on your savings goals, with shorter terms suitable for specific short-term objectives and longer terms for locking in higher annual percentage yields (APYs).
Rate of Return: Look for the best APY for your chosen term, as CD rates are fixed and offer a consistent return over the term duration.
Minimum Deposit: Some CDs may require a minimum deposit, which can affect the APY offered. Consider your budget when selecting an appropriate deposit amount.
Type of Bank: Digital banks often provide competitive interest rates, so explore different banking options to find the best rates for your financial goals.
Consider exploring high-yield savings accounts or money market accounts if you prefer not to use online-only banks. These options often offer attractive interest rates without withdrawal penalties. Early withdrawal penalties for certificates of deposit (CDs) are usually based on a certain number of months of interest foregone, such as 90 days for CDs with terms up to 24 months. Longer-term CDs may have higher penalty fees.
It’s important to assess the circumstances in which breaking a CD could be beneficial. CDs provide guaranteed returns with fixed interest rates upon maturity, often offering higher rates than traditional savings accounts. CD terms range from three months to several years, catering to various financial goals. While CDs offer a safe method to earn interest, other investments like stocks, bonds, or mutual funds may yield higher returns over the long run. Additionally, once a CD is locked in, you cannot add more funds until maturity.
If you need liquidity, consider alternatives to CDs, such as high-yield savings accounts or money market accounts that provide flexibility in accessing your funds. These options offer steady returns without penalties for withdrawals. For those seeking higher returns, investments in stocks, index funds, or mutual funds may present opportunities, albeit with greater risk. Stay informed by learning more about CDs and various investment options to optimize your financial journey. Keep track of your CD maturity date through notifications from your bank via mail, email, or online alerts. Ensure your contact details are current to receive timely updates.
Ensure you don’t miss important notifications and set your own reminder a few weeks before your CD matures. Find out more in our guide on what to do after your CD matures.
How do banks generate revenue with a CD? Banks make money by charging higher interest rates on loans compared to the interest they pay on customer deposits. This profit margin, known as a spread, is essential for banks to make money. Unlike a regular savings account that allows for easy access to your funds, a CD requires you to lock in your deposit for a specific period, promising a return of your initial deposit plus interest upon maturity. This lock-in period, along with penalties for early withdrawal, enables banks to plan better for earning from your deposit and justifies offering slightly higher interest rates.
Is my money safe with online-only banks like Lending Club or SoFi? Yes, online-only banks and digital accounts are secure, just like traditional banks. They are either FDIC-insured chartered banks or partner with established banks to offer deposit accounts protected by the government for up to $250,000. Even if the fintech company were to face issues or close down, your money is safeguarded by the FDIC. When comparing options, look for terms like “member FDIC,” “FDIC insured,” or “NCUA insured” to ensure your funds are protected.
What is compound interest? Compound interest is the concept of earning interest not just on your initial deposit but also on the interest you accumulate over time. This strategy accelerates your savings growth by making every dollar work harder towards your financial objectives. The Annual Percentage Yield (APY) reflects the total interest you’ll earn on your deposit in a year, including compound interest, shown as a percentage.
What is a jumbo CD? A jumbo CD is a type of certificate of deposit that requires a minimum deposit of $100,000 to open. Similar to standard CDs, jumbo CDs offer a fixed interest rate and term. While they traditionally provided higher rates than regular CDs, the current high interest rates set by the Fed may not always guarantee better returns. It’s advisable to compare offerings before deciding on a jumbo CD.
What is a no-penalty CD? A no-penalty CD, also known as a liquid CD, is a type of CD where you can lock in a deposit for a fixed return over a specified period but have the flexibility to withdraw your funds without penalty before the CD matures. However, this flexibility may come with lower interest rates compared to a traditional CD. Given the current high rates, a high-yield savings account might offer similar or better rates with the same flexibility. Consider the pros and cons before opting for a no-penalty CD.
What is a CD ladder? A CD ladder is a financial strategy that involves dividing your money among multiple CDs to benefit from higher rates without committing your entire investment to a single long-term CD. This approach allows you to access a portion of your funds at regular intervals while
Learn how to create a CD ladder by investing at regular, timed intervals to secure today’s top rates and enjoy continuous returns. Discover the benefits of brokered CDs, which are purchased through brokerage firms rather than traditional financial institutions. These CDs offer flexibility, allowing you to acquire them through your investment account from either new issuances or existing investors. Explore the differences between saving and investing, understanding how each approach impacts the accessibility and risk associated with your funds. Consider various investment options such as stocks, bonds, and mutual funds to potentially achieve higher returns. Stay informed with the most recent annual percentage yields and rates, keeping in mind that these figures may vary by region and are subject to change. Stay updated with reliable sources including the FDIC, U.S. Bureau of Labor and Statistics, and CME Group for comprehensive financial insights.
