Here's Why Ignoring CD Rates Could Be the Most Expensive Mistake You Make in 2025
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CD rates are already starting to slide in 2025, and the window to lock in some of the highest returns in years is closing fast. After two years of hikes that pushed top 1-year CDs up around 4.50% APY, the Federal Reserve has now started cutting rates. Banks are following suit. Wait too long, and the CDs available later this year could pay far less than what's on the table today.
The impact on your wallet is real. A $25,000 deposited at 4.50% APY would earn about $1,125 in a year. Let that same money sit until rates drift down to 3.50%, and you'd only pocket $875. That's $250 gone in a single year, just for waiting. Stretch that out over bigger deposits or multiple years, and the missed earnings pile up quickly.
Why CDs matter now
Certificates of deposit stand out right now for one key reason: certainty. You know your exact return the day you open one, and the bank can't cut your rate for the full term. That stability can be a comfort in a year when markets feel shaky.
Right now, top CDs still pay around 4.00% to 4.50% APY on 1-year terms. Compare that with the national average savings account at just 0.40%, and the gap is obvious. Even against high-yield savings accounts, CDs give you one big advantage: You lock in today's rate, and it doesn't drop if rates are cut further. Check out some of the best CDs around to secure the best rate today.
What to do with your savings
If you don't want to tie up all your cash at once, laddering CDs can be a smart strategy. That means splitting your money into multiple terms -- maybe a 1-year, 2-year, and 3-year CD. You'll capture some of today's best rates while keeping part of your savings accessible sooner. When shorter CDs mature, you can reinvest based on where rates stand then.
Don't miss this chance
CD yields won't stay where they are now if the Fed keeps cutting rates. If you have money you won't need right away, compare the best CD rates available now and consider locking one in before they fall further.
Your future self will be glad you didn't wait.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.