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Why You Should Consider a CD That Guarantees 🐟Its Rate Unti🍸l 2025 or Beyond

When interest rates are high but headed down, 澳洲幸运5官方开奖结果体彩网:certificates of deposit (CDs) are one of the smartest places to put some of your cash savings. That's because the 澳洲幸运5官方开奖结果体彩网:annual percentage yield (APY)✃ you sign up for i𒐪s the rate you'll keep—even while interest rates on savings accounts and new CDs are falling.

That's the situation U.S. savers are in right now. Triggered by an aggressive 2022–2023 rate-hike campaign by the 澳洲幸运5官方开奖结果体彩网:Federal Reserve, CD rates climbed last fall to their highest levels in more than 20 years﷽—and they're still paying historically high rates. But the days of 5% CDs are likely numbered.

The reason is that the Fed has shifted into rate reductions now that 澳洲幸运5官方开奖结果体彩网:inflation has cooled. The central bank kicked off this new phase with a 0.50 percentage point rate cut on Sept. 18, and it's expected to throttle back further at its meeting next week, which will conclude with a rate decision announcement on Nov. 7.

The Best CDs Pay 5ꦛ% or Better for Up to a Year—But Longer-🍰Term Guarantees May Be Smarter

Although CD rates have already eased down from their two-decade peak, you can still lock in attractive rates. For instance, the top dozen nationally-available CD options earn 5.00% or more. The highest-paying 澳洲幸运5官方开奖结果体彩网:offers 5.50% APY, available with an 8-month term. Or you can earn a top rate of 5.00% that's 澳洲幸运5官方开奖结果体彩网:locked in for a year. Both of these terms will keep your CD rate guaranteed well into 202▨5.

But opting for a longer CD term, with a lower APY, might be a better move. If you can manage without some of your savings for 18 months or more, you can extend one of today's stellar rates even longer. You could score a 澳洲幸运5官方开奖结果体彩网:top rate of 4.65% for 15 months, while the 澳洲幸运5官方开奖结果体彩网:leading 2-year CD pays 4.50%. This 24-month rate lock will let you earn a gua෴ranteed return until Haꦰlloween 2026.

Longer rate locks are also smart to consider. You can earn a top rate of 4.00% to ꦑ4.25% on certificates guaranteeing their rate until 2027, 2028, or even late 2029.

Don't Delay—Multiple Fed Rate Cuts Are Likely to Keep Pushing Savings and CD Rates Down

A further rate cut of a quarter percentage point appears likely next week, with more than 95% of interest rate traders currently betting on the announcement, according to the CME Group's FedWatch Tool. But it's not likely to stop there. Almost three-quarters of these investors expect a quarter-point reduction at the Dec. 18 meeting.

The Fed also expects to cut rates further in 2025 and likely 2026, as shown by its "dot plot." The quarterly chart, last released on Sept. 18, anonymously indicates what each Fed committee member expects will happen to the 澳洲幸运5官方开奖结果体彩网:federal funds rate over the next few years. As you can see below, their median predictions are for rate cuts totaling half a percentage point in the last two 2024 meetings, another percentage point of cuts in 2025, and possibly another half-point reduction in 2026.

Time will tell what happens to the federal funds rate this year and beyond. But it's reasonably sure the rates you can guarantee today are quite a bit better than what we'll likely see in the coming months. So locking in your preferred CD soon is still a smart, forward-thinking move.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.

Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, 澳洲幸运5官方开奖结果体彩网:read our full methodology.