6-Month or 5-Year CDs: Which Are Better Right Now?
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CDs offer something rare: guaranteed returns and zero drama. With top yields still hovering around 4.00% APY, CDs let you earn solid interest without worrying about the stock market or the Fed's next move.
The real question is how long you should lock in your money. Let's compare what 6-month and 5-year CDs look like heading into late 2025.
Rate comparison: 6-month vs. 5-year CDs
Here's where things stand this month:
- Top 6-month CD: around 4.10% APY
- Top 5-year CD: around 4.00% APY
If you invest $10,000 today, a 6-month CD would earn about $205 by maturity. The same amount in a 5-year CD would grow to roughly $2,166 over the full term.
When a 6-month CD makes sense
Short-term CDs are ideal for savers who want flexibility. Your money is tied up for only half a year, which means you can quickly move it if rates rise or you find a better offer.
The Fed might cut rates again before the end of 2025, and shorter CDs give you the freedom to pivot while still earning something meaningful in the meantime.
A 6-month CD could be a smart move if you:
- Expect to need your cash within the next year
- Want to lock in a top short-term rate before it drops
- Think another rate bump might still happen before cuts begin
Want to see where rates are highest right now? Compare today's best CD accounts and lock in your return before they drop.
When a 5-year CD makes sense
If you've got savings you won't touch for several years, a 5-year CD can lock in today's higher yields before they disappear.
Long-term CDs protect you from falling rates. Even if the Fed trims rates again next year, your return stays fixed. That's peace of mind for anyone who values predictable income.
A 5-year CD might fit best if you:
- Have long-term cash you won't need until 2030 or later
- Want a guaranteed return that outpaces inflation
- Believe rates are more likely to fall than rise
Explore the best 5-year CDs available today and lock in your rate before the next round of cuts.
Don't overlook high-yield savings accounts
If you're not ready to commit your money for months or years, a high-yield savings account (HYSA) is a great middle ground.
Top accounts right now are paying between 4.00% and 4.50% APY, and you can withdraw funds anytime without penalties.
Savings rates can drop quickly when the Fed cuts rates, but you'll keep full access to your cash while earning a solid return. It's a flexible way to park money while you decide what's next.
The takeaway
Both 6-month and 5-year CDs still offer competitive yields in late 2025. The right one depends on how soon you'll need your money and how confident you are about where rates go next.
If you want security, predictability, and easy returns, CDs are still one of the safest bets out there.
Compare today's best CD rates and find the term that fits your goals before banks start trimming yields.
Our Research Expert
Joel O’Leary is a full-time Personal Finance Writer at Motley Fool Money, covering credit cards, bank accounts, investing, mortgages, and other personal finance topics. Joel has been writing about personal finance since 2018, previously leading editorial content for the How To Money podcast and serving as a resident writer at Budgets Are Sexy. He bought his first rental property at age 18, funding the down payment with savings from his high school job at McDonald’s -- a testament to his lifelong passion for smart money decisions. His work aims to make personal finance accessible and actionable for everyday readers. When he’s not writing, Joel enjoys surfing and spending time with his family.