Do you want to maintain your current savings rates of 4%? Here’s the trick Savvy Savers uses

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The Fed is almost certain to cut interest rates this week – here’s what it means for your savings

The Federal Reserve is currently meeting, 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.

Smart Savings Trick: Use a CD to lock in today’s high returns before they dip

With interest rates expected to fall, savvy savers know it’s 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 around 4.30% to 4.40% 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. You can compare options in 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 can still earn up to 5% flexible savings, but that window will likely close.

A smart CD strategy also relies on keeping some cash on hand. That way, if you suddenly need money, you can withdraw from savings first — without breaking your CD and incurring any penalty. Just as important, that cash cushion should not remain idle. To maximize your total return, keep it in a high-yield savings account that earns as competitive a rate as possible.

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, today’s best high-yield options pay APYs approximately 10 to 13 times above average. The best offers currently pay up to 5.00% APY, and our daily ranking of the best high-yield savings accounts includes more than a dozen accounts above 4.25%, many with no limits.

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.