Put your savings on autopilot with guaranteed yields of up to 4.60% APY — January 7, 2025

Savvy savers know a sure thing when they see it, and today’s best certificates of deposit paying up to 4.60% APY offer exactly that. By opening a CD today, you’re able to lock in fixed rates of return that significantly outearn your traditional savings accounts — more than 10 times the 0.42% average savings yield.

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That predictability is the real advantage of CDs: After you secure your guaranteed rate, it doesn’t change until your term expires regardless of market swings or Federal Reserve policy moves in 2025. This reliability sets CDs apart from other savings vehicles with variable rates that tend to fall soon after the Fed rate cuts.

For those wanting flexibility alongside strong returns, CD ladders are a time-tested savings strategy. By spreading your deposit across multiple maturity dates, you gain regular access to portions of your savings while still benefiting from today’s elevated yields. Or opt for no-penalty CDs that allow for early withdrawals without the fees.

Whether you’re building an emergency fund or adding low-risk investments to your retirement savings, it takes just minutes online to open your new CD. Here’s where to catch the highest rates right now on a range of FDIC-insured CDs with no or low minimum deposits across a range of terms — from 6 months to 5 years.

💰 Today’s best rates: Swap your everyday savings for faster growth at up to 4.80% APY

Best CD rates for January 7, 2025

Today’s best rates of returns are found at FDIC-insured digital banks and online accounts paying out up to 4.60% APY with low or no minimums at Bankwell, Capital One and other trusted providers as of Tuesday, January 7, 2025.

Select APY to sort by yields, or sort by term to find the best fit with your financial goals.

Online-only banks and digital accounts may not sound as familiar as bigger names, though each is FDIC-insured or partners with an FDIC-insured bank to offer deposit accounts that are protected for up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) — just like those at your neighborhood bank.

Dig deeper: How to protect your money from Fed rate cuts

How a certificate of deposit works

A CD is a type of savings or deposit account that’s offered by banks, credit unions and other financial institutions. Unlike a traditional savings account, a certificate of deposit holds your money for a fixed period of time — terms of one month to five years or longer — paying out your initial deposit and interest you’ve earned after the term expires or “matures.”

Typical CD rates are fixed, which means you’re guaranteed a rate of return that doesn’t change. While you can’t add to or access your cash until the CD matures, the trade-off is a safe, stable way to earn a much higher yield than you’d find with a traditional savings account.

Dig deeper: How CDs work — including 7 types for boosting your savings

Traditional CD rates

The Federal Deposit Insurance Corporation tracks monthly average interest rates paid on certificates of deposit and other savings accounts. Created by Congress, the FDIC is an independent government agency charged with maintaining stability and public confidence in the U.S. financial system and providing insurance on consumer deposit accounts.

Here’s how FDIC national deposit rates on a $10,000 minimum deposit compare to other deposit accounts between November and December 2024.

The FDIC is an independent government agency charged with maintaining stability and public confidence in the U.S. financial system and providing insurance on consumer deposit accounts.

Dig deeper: Best low-risk investments for retirees with steady returns on your nest egg

CD rates in the news

CD rates strongly track with the key interest rate set by the Federal Reserve, the U.S.’s central bank. This Fed rate is the benchmark that affects rates on deposit accounts, loans, mortgages, credit cards and other financial products. Typically, as the Fed rate rises, so do APYs on savings products like CDs, high-yield accounts and money market accounts.

After increasing the target interest rate 11 times from March 2022 to July 2023 in an effort to combat the highest inflation in four decades coming out of the pandemic, the Federal Reserve announced a highly anticipated half-point cut to its federal funds target interest rate on Sept. 18, followed by two additional quarter-point cuts after its November and December policy meetings.

December 18, 2024: Fed cuts rates by another quarter point — third straight cut since Sept.

At the conclusion of its eighth and final rate-setting policy meeting of the year on December 18, 2024, the Federal Reserve announced it was lowering the federal funds target interest rate by 25 basis points to a range of 4.25% to 4.50%. The Fed’s third consecutive cut this year comes after slashing the Fed rate by a jumbo half point in September and quarter point in November.

In its post-meeting statement, the Federal Reserve said it was lowering the target range, citing “labor market conditions have generally eased, and the unemployment rate has moved up but remains low” while acknowledging a “somewhat elevated” inflation rate. “In considering additional adjustments,” the Fed said it would “carefully assess incoming data, the evolving outlook, and the balance of risks.”

Policymakers estimate just two additional cuts in 2025, down from four cuts projected after Sept.’s meeting — though in addition to mixed economic signals that include stubborn inflation and strong job growth, the impacts of a Trump presidency leave the market uncertain as to how deep the cuts to expect.

What to expect at the Fed’s next policy meeting: January 28–29, 2025

It’s expected the Federal Reserve will hold the Fed rate at 4.25% to 4.50% after its policy meeting on January 28 and January 29, 2025. The CME FedWatch Tool, which measures market expectations for Fed fund rate changes, predicts a 91% chance that the Fed will keep rates where they are.

Economists are keeping a close eye on inflation and labor reports amid speculation as to timing of future cuts to the Fed rate, with inflation data indicating a continued decline from a peak of 9.1% in June 2022 to rates that have ranged from 2.5% and 4% since May 2023.

An eagerly awaited jobs report released on December 6 showed hiring rebounding sharply, with employers adding 227,000 jobs to payrolls in November — significantly higher than economists’ expectations and a dramatic surge from October’s revised gain of 36,000 jobs. The unemployment rate edged up moderately to 4.2% from October’s 4.1%. A new labor reading for December is due on January 10, 2025 — the first major economic report in the new year.

November’s inflation reports showed inflation ticking up, starting with the consumer price index released on December 11 — a widely used indicator of inflation — showed the prices of consumer goods and services rising 2.7% year over year in November, up from 2.6% in October though largely in line with forecasts. Producer price index data released on December 12 reported wholesale prices — or the prices manufacturers pay to producers of goods and services — rising 3% year over year in November, up from 2.4% in October, largely driven by a surge in food costs. Fresh inflation readings for December are due in mid-January, two weeks before the next FOMC meeting.

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At a press conference following December’s FOMC meeting, Federal Reserve Chair Jerome Powell said about future Fed rate changes, “We’re not on any preset course,” adding, “we’re going to be cautious about new cuts” in the new year.

The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on Wednesday, January 29, 2025, at 2 p.m. ET.

Dig deeper: When’s the next Federal Reserve meeting? What to expect — and how it affects your finances

How to compare CDs

When choosing the best certificate of deposit for your budget, compare these key factors against your specific savings or financial goals.

• Term length. A CD is ideal for saving toward a specific goal with money you’re not likely to need until the account matures. Look to shorter terms for saving toward, say, a family holiday or home renovation. Terms of one to five years or longer can help you lock in today’s highest APYs before interest rates inch lower.

• Rate of return. Look for the highest APY for the term you’re interested in. The APY is the amount of interest the CD earns in a year — including compounding. Unlike a savings account, CD rates are fixed, meaning they won’t change over the life of your term.

• Minimum deposit. While you can find CDs without minimum starting deposits, some CDs require $100 to $1,000 to open an account. Generally, if you have the money for a higher initial deposit, you can earn a higher APY — just be sure that amount isn’t a hardship on your budget.

• Type of bank or financial institution. Today’s best interest rates are offered by digital banks, with few exceptions among traditional brick-and-mortar banks or credit unions. If you aren’t comfortable with an online-only bank, look to a high-yield savings account or money market account offering a high rate without withdrawal penalties.

• Penalties and fees. Life happens, and you might find yourself needing to tap into your money before the CD matures. Early withdrawal penalties are typically expressed in months of interest you’re giving up — for example, 90 days of interest for CD terms of up to 24 months. Often the longer the term, the higher the penalty fee.

Dig deeper: When is it worth it to break a CD? An expert’s thoughts on early withdrawals and breaking even

Benefits of a certificate of deposit

• Guaranteed returns. With a CD, you make one deposit and earn a guaranteed interest rate over your term that’s yours after the CD matures.

• Higher rates than traditional accounts. Many banks and financial institutions offer CDs at rates that are higher than you’ll earn with the average savings or money market account — with digital and online banks offering the highest rates on average.

• Range of CD terms. You can find CD terms of three months to five years or more to fit your financial goals. Rates for six-month CDs can outpace the average bank account, and longer terms offer rates comparable to the best high-yield savings accounts.

Drawbacks of a certificate of a deposit

• Penalty for early withdrawals. If you need to access your money before your CD term expires, you face fees equal to several months of interest — as much as three to six months’ worth, depending on the account and your term.

• Not the highest investment returns. CDs are a safe way to steadily earn interest, but you stand to earn more over the long term through stocks, bonds, mutual funds, annuities or other securities. And by locking your money in a CD, you could miss out if average rates increase.

• You can’t add more money. After your CD locks, you aren’t able to add to your balance until after the CD matures — at which point, you can move your money to another account or roll it over to a new CD.

Dig deeper: High-yield savings account vs. CD: What to know when rates are high

Alternatives to a certificate of deposit

A certificate of deposit isn’t the only low-risk way to earn interest on your savings. Look to these alternatives that offer safe, steady returns — with the flexibility to add to or withdraw your money without penalty.

Dig deeper: The best low-risk investments for retirees for safe, steady returns

FAQs: CDs, safety and growing your money

Learn more about how certificates of deposit work when comparing the best for your budget and financial goals. And take a look at our growing library of personal finance guides that can help you save money, earn money and grow your wealth for the long term.

How do I know when my CD matures?

Your bank will typically notify you by mail, email or an online account alert when your CD is close to maturing. Be sure your contact information is up to date so you don’t miss important notifications. Also, set your own reminder a few weeks before the maturity date. Learn more in our guide to your options after your CD matures.

How do banks make money with a CD?

Banks charge higher interest rates on money they lend out than the interest they pay on customer deposit accounts. The difference is called a spread, and it’s what banks rely on to make money. Unlike a traditional savings account that allows for flexible movement of your money without penalty, a CD requires you to lock in your deposit over a specified period of time, returning your principal plus interest after the account matures. That lock-in period — and penalties that discourage your early withdrawal — allows a bank to better plan how long it has to make money off your deposit, and it’s typically willing to pay a little more for that reliability.

Is my money safe with an online-only bank like Lending Club or SoFi?

Yes. Online-only banks and digital accounts are as safe as their traditional counterparts. They are either FDIC-insured chartered banks or partner with more recognizable banks to offer deposit accounts that are protected by the government for up to $250,000. The FDIC insures the safety of your money, even if the fintech were to fail or go out of business. Look for terms like “member FDIC,” “FDIC insured” or “NCUA insured” when comparing your options. Learn more about how online banks compare to traditional banks when it comes to rates, fees and management of your money.

What is compound interest?

Compound interest is often described as earning interest on your interest. It’s a powerful way to boost your savings over time by earning interest on both your initial deposit and any interest you earn along the way. It means that every dollar you save is working harder and growing faster toward your financial goals.

An account’s APY is the total amount of interest you’ll earn on your deposit over one year, including compound interest, expressed as a percentage. Learn more about how you can turn time into money in our guide to how compound interest works.

What is a jumbo CD?

A jumbo CD is a certificate of deposit that requires a minimum of $100,000 to open the account. Like regular CDs, jumbo CDs come with a fixed interest rate and term. In the past, jumbo CDs offered a way for people and businesses to safely invest money at higher rates than available with a traditional CD.

However, with the Fed holding interest rates at 23-year highs, it’s not always true that jumbo CDs have a higher interest rate than traditional CDs. Learn more about jumbo CDs and why it’s wise to shop around before locking your money into one.

What is a no-penalty CD?

A no-penalty CD — also called a liquid CD — is like a traditional CD through which you lock in a deposit for a guaranteed rate of return over a stated period of time, but with the flexibility of withdrawing your money without penalty before the CD matures. This flexibility comes with trade-offs, however, including lower rates of return than a traditional CD. With rates at historic highs, a high-yield savings account may offer comparable or even higher rates than a no-penalty CD with the same flexibility. Learn more about what to watch for with no-penalty CDs.

What is a CD ladder?

A CD ladder is a savings strategy designed to spread out your money across multiple CDs to leverage high rates without tying up your full investment into one long-term CD. The result of CD laddering is access to a portion of your investment at regular, timed intervals. Learn how to build a CD ladder that helps you lock in today’s highest rates while enjoying rolling returns — before today’s best rates are gone.

What is a brokered CD?

A brokered CD is a certificate of deposit you buy through a brokerage firm, instead of from a bank or credit union. Like traditional CDs, you choose a term length that comes with a set interest rate. But unlike with regular CDs, you can buy them through your investment account either new or “used” from other investors. Learn more about brokered CDs — and what to consider before investing in one.

What’s the difference between saving and investing?

The core difference between saving and investing lies in the accessibility of your money and the risks you take with it. Saving means keeping your money in secure accounts with little to no risk of losing your principal. On the other hand, investing involves buying assets like stocks, bonds or mutual funds that can potentially earn higher returns. Learn more in our guide to saving and investing to find the best approach for your nest egg.

Editor’s note: Annual percentage yields shown are as of Tuesday, January 7, 2025, at 8:10 a.m. ET. APYs and promotional rates for some products can vary by region and are subject to change.

Sources

• National Rates and Rate Caps, FDIC. Accessed December 17, 2024.

• Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed December 12, 2024.

• Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed December 13, 2024.

• Employment Situation Summary, U.S. Bureau of Labor and Statistics. Accessed December 9, 2024.

• CME FedWatch Tool, CME Group. Accessed January 7, 2025.