The Federal Reserve made three rate cuts in 2024, impacting deposit account rates, including Certificates of Deposit (CDs). With rates expected to decline further, now may be the best time to secure a high-yield CD before returns decrease. Below, we outline the best CD rates available today, national averages, and expert recommendations for maximizing your earnings.
Best CD Rates Today – January 20, 2025
As of January 20, 2025, CD rates remain highly competitive, particularly for short-term CDs. The best 1-year CD rates currently offer up to 4.27% APY, while longer-term CDs provide slightly lower yields.
Top High-Yield CDs Available Today
| Bank/Institution | Term | APY (%) | Minimum Deposit |
| NexBank | 12 months | 4.27 | $25,000 |
| Marcus by Goldman Sachs | 12 months | 4.25 | $500 |
| Ally Bank | 18 months | 4.10 | $0 |
| Capital One | 24 months | 4.05 | $1,000 |
| Discover Bank | 36 months | 3.95 | $2,500 |
Key Insights on Today’s CD Rates
Online banks and credit unions typically offer higher APYs compared to traditional brick-and-mortar institutions.
Short-term CDs (6-18 months) currently offer the highest rates, making them a great option for savers looking for maximum returns in a short period.
Long-term CDs (3-5 years) provide stable and predictable growth, but their rates are slightly lower than shorter terms.
National Average CD Rates (January 2025)
While some institutions offer high-yield CDs, the national average CD rates remain significantly lower. According to the latest FDIC data (December 2024), here’s how national averages compare:
| CD Term | Average APY |
| 1 month | 0.23% |
| 3 months | 1.50% |
| 6 months | 1.65% |
| 12 months | 1.83% |
| 24 months | 1.52% |
| 36 months | 1.33% |
| 48 months | 1.24% |
| 60 months | 1.32% |
Even though these averages are lower than the top available rates, they still reflect some of the highest CD rates seen in nearly two decades, thanks to inflation-fighting policies from the Federal Reserve.
Why Lock in a CD Now?
CD rates are influenced by Federal Reserve interest rate policies. With the Fed making three rate cuts in 2024, experts predict further reductions in 2025. Locking in a high-yield CD today can help secure the best returns before rates decline.
Benefits of Locking in a CD Now:
- Guaranteed Interest Rates: Unlike savings accounts, CD rates are fixed for the duration of the term, providing predictable earnings.
- Higher Yields than Savings Accounts: CDs typically offer better returns than traditional savings and money market accounts.
- Protection Against Falling Rates: If interest rates drop in the coming months, you will still earn the locked-in higher rate.
How to Choose the Best CD for Your Needs
1. Compare APYs and Terms
Look for CDs with the highest APY for your desired term length. If you need liquidity, consider a shorter-term CD.
2. Evaluate Minimum Deposit Requirements
Some high-yield CDs, like NexBank’s 4.27% APY CD, require large deposits ($25,000+), while others like Ally Bank have no minimum deposit.
3. Consider Early Withdrawal Penalties
Most CDs charge a penalty for early withdrawals. Ensure you won’t need access to your funds before the term ends.
4. Choose FDIC or NCUA-Insured Institutions
To protect your deposit, select CDs from FDIC-insured banks or NCUA-insured credit unions, which provide coverage up to $250,000 per depositor.
Best Strategies to Maximize Your CD Earnings
1. Laddering Strategy
A CD ladder involves dividing your investment across multiple CDs with staggered maturity dates. This strategy allows you to benefit from higher long-term rates while maintaining liquidity.
2. Consider No-Penalty CDs
Some banks offer no-penalty CDs, allowing withdrawals without a fee. These are ideal if you anticipate needing access to your funds.
3. Look for Promotional Offers
Banks sometimes offer limited-time promotional rates, which can be significantly higher than standard CDs. Keep an eye on the latest CD deals.
Where to Open a High-Yield CD Today
- Online Banks: Offer some of the best CD rates with low or no minimum deposit requirements.
- Credit Unions: Often provide higher rates than traditional banks, especially for members.
- Traditional Banks: While they typically offer lower APYs, they may have promotional rates for existing customers.
Final Thoughts
With CD rates still at their peak, now is an excellent time to secure high-yield certificates of deposit before potential rate cuts. Whether you’re looking for short-term gains or long-term security, there are plenty of competitive CD options available today.