Is it too late to secure a CD before the Fed cuts interest rates?

The full article continues below these offers from our partners.

The Fed is likely to cut interest rates this week – what it means for loan and savings rates

The Federal Reserve meets on Wednesday, and financial markets widely expect central bankers to announce another quarter-point rate cut — likely to be followed by an additional cut in December. This comes after September’s quarter-point cut, the first of 2025.

For savers, this is important. Deposit rates at banks and credit unions generally move in line with the Federal Reserve’s benchmark rate, so each cut will push yields on savings and CDs gradually lower. You can’t stop interest rates from falling, but you can take smart steps now to maximize what your money earns in the coming months.

If you’ve been thinking about opening a CD, now is a good time to make your move. Acting quickly can help you get a higher guaranteed return for months — or even years — before the best CD offers start disappearing.

CDs allow you to lock in today’s high returns before they fall

As rates start to fall, certificates of deposit (CDs) provide a smart way to lock in one of today’s high yields. 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 longer, a CD allows you to get the highest 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. 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 can still earn up to 5%, but rates won’t stay high forever

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.

With the recent inflation rate at 3%, earning less than that means your savings lose value over time. That’s why it’s important to keep your money in an account that keeps up with the pace of progress.

Fortunately, there are dozens of options for doing this — including high-yield savings accounts that pay up to 5.00% APY. While this higher return requires certain conditions to be met, our daily ranking of the best accounts includes 15 accounts offering a return of 4.25% or better, many with no conditions.

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.