Best CDs to Buy in 2025: Earn Over 5% Interest Today

Certificates of Deposit (CDs) are currently offering some of the highest interest rates seen in years, with many surpassing 5.00% APY. If you're looking for a secure way to grow your savings and meet specific financial goals, now is an ideal time to consider investing in CDs.

Before committing, ensure you can lock your funds for the CD's term, as early withdrawals often come with penalties. However, the benefits of guaranteed returns and protection against inflation make CDs a compelling choice in today's economic environment.

Key Points to Consider

• Top CD rates in 2024 have climbed above 5.00%, the highest in over a decade.
• CDs provide a safe, predictable way to grow your savings for future expenses.
• They offer a reliable hedge against inflation by locking in competitive interest rates.
• Be mindful of the term length and early withdrawal penalties before investing.

When Are CDs the Right Investment?

CDs suit investors who prioritize safety and have a clear timeline for using their funds. With interest rates at their peak since 2007, CDs offer an attractive yield compared to other low-risk options. The Federal Reserve’s current stance suggests rates will remain elevated, making CDs a smart choice for locking in high returns.

CD terms can range up to 10 years, aligning well with long-term goals like home purchases or education funding. Additionally, CDs are federally insured up to $250,000, providing security even during financial market volatility.

Ideal for Savers with Specific Financial Goals

If you’re planning a purchase such as a car or a home, CDs can help your money grow safely within your timeline. For example, a 6-month CD at 5.25% APY on $10,000 could earn you an extra $259, helping offset costs.

Longer-term savers can use a CD ladder strategy—dividing funds into multiple CDs with staggered maturities—to maintain liquidity while maximizing interest earnings over time.

Building an Emergency Fund with CDs

Certified Financial Planner Jordan Benold recommends using CDs to store cash you don’t plan to access immediately, making them suitable for emergency funds. While early withdrawal penalties apply, if you don’t anticipate needing immediate access, short-term CDs can yield higher returns than traditional savings accounts.

For those requiring more liquidity without penalties, a high-yield savings account may be preferable.

Beating Inflation with High-Yield CDs

With inflation rates still around 4%, CDs offering over 5% APY help preserve your purchasing power. As the Federal Reserve’s rate hikes take effect, locking in today’s high CD rates can protect your savings against rising costs.

Investors can diversify by holding multiple CDs, positioning themselves to benefit if rates continue to climb.

Safe, Steady Income for Conservative Investors

For those seeking consistent income with minimal risk, CDs are an excellent choice. John Corron, CFP, highlights that risk-averse investors can now earn attractive yields without venturing into volatile markets.

Using brokered CDs or a laddered approach can provide flexibility and periodic access to funds while maintaining FDIC or NCUA insurance coverage up to $250,000 per institution.

How We Collect CD Rate Data

Our daily rankings are based on rates from over 200 federally insured banks and credit unions nationwide. Institutions must meet strict criteria, including availability in at least 40 states and reasonable deposit requirements, to ensure our recommendations reflect the best options available to consumers.

For full details on our methodology, please refer to our comprehensive guide.

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