Time is running out to lock in higher interest rates before the Fed’s next move

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The Federal Reserve is likely to cut interest rates next week – here’s how it could affect your savings

The Federal Reserve meets next week, and financial markets widely expect central bankers to announce another quarter-point rate cut on Wednesday. This would follow a similar move in September, the first reduction in 2025.

For savers, this is important – since bank savings yields generally move in line with the benchmark interest rate set by the Federal Reserve. This rate is still relatively high, which is why savings returns today remain strong at 4% to 5%. But with one or more cuts by the Fed, those highs will start to fall — making now a smart time to lock in a higher interest rate before it disappears.

CDs allow you to realize today’s high returns before they start to decline

With prices expected to fall, this is a good time to open a Certificate of Deposit (CD). Unlike savings or checking accounts, where returns can decrease at any time, a CD locks in your rate until maturity. If you can set aside money for a few months, a year or more, CDs allow you to lock in higher returns today before the Fed’s next moves push them lower.

Currently, the best CD rates range from about 4.30% to 4.45% over shorter terms of 3 to 13 months. Upper mid-term CDs — those with a term of 18 months to 3 years — let you lock in an interest rate in the range of 4.20% to 4.25%, while longer-term CDs offer a 4- to 5-year interest rate in the low 4% range. Check out our daily rankings of the best CDs to see where returns stand today.

Just make sure your CD matches your schedule. Withdraw before the due date and you will face an early withdrawal penalty. And always keep some cash on hand for emergencies so you don’t have to tap your CD early.

Your money could still make up to 5%, but the clock is ticking

For cash you want to maintain access to — whether alongside or in place of a CD — it can still pay to have a solid yield. The FDIC’s national average savings rate is just 0.40%, and some of the largest banks — such as Chase, Bank of America, and Wells Fargo — pay close to zero. In contrast, the best high-yielding options offer APYs 10 to 13 times higher.

Currently, the best high-yield savings accounts pay up to 5.00% annual yield. While this higher rate requires certain conditions to be met, our daily ranking of the best accounts includes more than a dozen accounts paying more than 4.25%, many with no restrictions.

How to Find the Best Savings and CD Rates

Each business day, Investopedia tracks rate data for more than 200 banks and credit unions that offer CDs and savings accounts to customers across the country and determines a daily ranking of the highest-grossing accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the minimum initial account deposit must not exceed $25,000. It is also not possible to determine A maximum The deposit amount is less than $5,000.

Banks must be available in at least 40 states to be eligible to be available nationwide. While some credit unions require you to donate to a specific charity or association to become a member if you do not meet other eligibility criteria (for example, if you do not live in a certain area or work a certain type of job), we exclude credit unions with donation requirements of $40 or more. To learn more about how to choose the best rates, read our full methodology.