CD Rates Are Dropping, but It's Not Too Late to Lock In a Great One
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CD shoppers had a pretty sweet ride over the past two years. Now, that era's coming to a close. As of fall 2025, the Fed has already trimmed rates, and experts expect more cuts through 2026. Naturally, CD yields are starting to come down too.
That being said, there's still time to lock in relatively high yields. Some online banks are offering around 4.00% APY on 12-month CDs, which is excellent compared to the national average of just 1.68%, according to FDIC data.
If you've been waiting for the right time to open a CD, here's where to look.
How much you can earn right now
My team and I track CD rates daily, always hunting down the best offers from top online banks.
Here's what the interest would look like with a 4.00% APY at different savings amounts:
| Deposit | Interest Earned |
|---|---|
| $5,000 | $200 |
| $10,000 | $400 |
| $20,000 | $800 |
| $50,000 | $2,000 |
That's a pretty sweet return for something completely risk-free. Even though rates are easing down, a 4.00% APY still beats what most big banks are offering by a mile. In fact, the national average for a 12-month CD is just 1.68%, according to the FDIC.
That gap adds up fast. On a $50,000 balance, choosing a top online bank instead of the average CD could mean an extra $1,100 in your pocket by this time next year.
If you've been sitting on extra cash in a checking account or low-rate savings account, this is an easy win. A CD gives that money a job to do while keeping it completely safe and FDIC-insured.
One of our expert picks right now is LendingClub's 8 Mo. CD at 4.10% APY -- a flexible option with a great bank. Read our full LendingClub CD review to see if it's the right fit for you.
LendingClub CD
On LendingClub's Secure Website.
When a high-yield savings account might be better
CDs aren't the only way to earn decent interest. High-yield savings accounts (HYSAs) are still paying between 3.50% and 4.50% APY.
But they come with one major tradeoff -- rates can change at any time.
That means HYSAs are vulnerable to immediate APY changes. On the flip side, they offer unmatched flexibility. You can access your cash anytime, with no penalties like CDs have.
Personally, I keep all my short-term cash and emergency funds (about $25,000 right now) in an HYSA. I'm okay with getting a slightly lower return and retaining full access to my money.
Having the option to move cash quickly or jump on a new investment opportunity is worth it to me. It really comes down to whether you value certainty or access more right now.
Explore today's best high-yield savings accounts -- flexible, FDIC-insured options still paying near 4.00% APY.
Why it pays to act now
It's tempting to think rates might bounce back up, but that's unlikely in the near term. Once the Fed starts a rate-cutting cycle, banks follow quickly. Savings accounts, CDs, and money markets all slide together.
Opening a CD now lets you "freeze" one of the remaining high yields before it disappears.
If you've got extra cash sitting in your checking account or emergency fund overflow, locking it into a CD or putting it into an HYSA gives it purpose. You'll earn guaranteed interest and remove the temptation to dip into it for impulse spending.
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.