2025 CD Rates Surge: Discover the Best Returns Up to 5.70% APY Now

In 2024, Certificate of Deposit (CD) rates continue their upward trajectory, breaking records across almost every term length.

Since early 2022, CD rates have climbed to levels unseen in nearly 16 years. Although the rapid increases from last year have slowed, the latest Federal Deposit Insurance Corporation (FDIC) data reveals that rates are still rising for most CD terms. This trend prompts savers to ask: How much longer will these attractive rates persist?

Record-Breaking CD Rate Averages in 2024

The FDIC’s recent report confirms that average CD rates increased across nearly all terms last month.

Notably, the 1-year CD rate average leads the gains, maintaining the highest average among all terms since January 2023. While most terms saw increases, the 5-year CD average rate held steady at 1.37%.

However, savvy investors can earn significantly more than these averages by shopping strategically. For example, while the national 1-year CD average is a modest 1.72% APY, the top 1-year CD currently offers an impressive 5.50% APY from Garden Savings Federal Credit Union. Even more enticing, the best 18-month CD rate reaches 5.70% APY through USAlliance Financial.

Pro Tip

Every CD term from 3 months to 3 years offers rates of at least 5.00% APY, with longer terms featuring rates in the high 4% range. Use our daily updated rankings to find the highest-yielding CDs tailored to your preferred term length.

The sharp rise in CD rates over the last 16 months is closely tied to the Federal Reserve’s interest rate hikes. Between March 2022 and May 2023, the Fed increased the federal funds rate ten consecutive times to combat inflation reaching four-decade highs. Since the federal funds rate directly influences the rates banks and credit unions offer on deposits, CD rates responded by climbing accordingly.

In June 2023, the Fed paused rate increases to evaluate the impact of prior hikes. This pause caused many CD rates to stabilize during May and early June, as reflected in the FDIC’s June data showing a slowdown in rate growth, with some terms remaining flat or even declining slightly.

As July 2024 approaches, anticipation of another Fed rate hike has led many banks to preemptively raise their CD rates ahead of the expected announcement on July 25-26.

Will CD Rates Continue to Rise in 2024?

The Fed’s rapid series of rate hikes has pushed the benchmark federal funds rate to a 5.00–5.25% target range, marking the fastest increase pace in nearly 40 years and reaching near two-decade highs. Consequently, bank deposit rates, including CDs, have surged to their highest levels since at least 2007.

Given the strong likelihood of another Fed rate increase next week, CD rates may edge higher, though any gains are expected to be modest—likely a quarter percentage point or less. Some institutions have already adjusted rates upward in anticipation, while others may follow suit later this month or in August.

Looking beyond July, the future of rate hikes remains uncertain. The Fed’s June 14 "dot plot" indicated that most policymakers expected at least two more hikes in 2024. However, recent easing inflation—3.0% year-over-year in June compared to 4.0% in May—has led many market participants to believe the July increase could be the last for the year.

Federal Reserve decisions remain highly responsive to real-time economic data, including inflation, employment, and banking sector developments, making precise predictions challenging.

If additional hikes occur, savings, money market, and CD rates would likely rise further, though increases will probably be incremental.

How We Collect CD Rate Data

Investopedia tracks daily rate data from over 200 federally insured banks and credit unions nationwide offering money market, savings, and CD accounts. To qualify for our listings, institutions must be FDIC or NCUA insured, have a minimum initial deposit cap of $25,000 or less, and banks must operate in at least 40 states. Credit unions with donation requirements of $40 or more are excluded. For full details, see our rate collection methodology.

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