Is It Too Late to Buy CDs in 2025?

If you missed the CD boom of 2023 and 2024, don't worry. You haven't totally missed the boat.

Right now, short-term CDs are still paying very competitive rates -- many in the 4.00% APY range for 6- to 12-month terms.

But those rates may not last much longer.

While rate cuts were widely predicted in 2025, the Fed has held rates steady so far -- and most traders now expect them to stay unchanged through the September meeting, according to CME FedWatch.

So if you're sitting on extra cash and want a guaranteed return, we may be nearing your last, best chance to lock in.

Short-term CDs are the sweet spot

Many online banks are offering short-term CDs in the 4.00% to 4.25% APY range. That's higher than most long-term CDs, and it gives you more flexibility when rates eventually change.

Short-term CDs are perfect if you've got cash you won't need for the next six to 18 months. Maybe it's a travel fund, next year's tuition, or just extra savings you want to grow safely without tying it up for years.

Here's an example of what a $15,000 deposit could earn at 4.00%:

Locking in a solid 4.00%+ yield into mid or late-2026 sounds pretty dang smart right now. By then, we may have a clearer picture of inflation, interest rates, and where the economy's heading.

Why rate cuts are likely coming soon

Thankfully, we haven't seen a resurgence of the wild inflation spikes from 2021 and 2022. But the Fed has been super cautious about cutting rates too fast, and has been in a holding pattern since late last year.

Earlier this year, most of Wall Street was betting on a summer rate cut. But those expectations have now been pushed out towards the end of 2025, as the Fed takes its time and waits for more consistent economic data.

The truth is, nobody really knows exactly when the first cut will happen. Markets are constantly guessing, and the Fed has made it clear they're in "wait and see" mode.

What we do know is that CD rates are still strong right now. If you want to lock in a solid return on your savings, it's definitely not too late -- and you might be glad you acted before the next move.

What about high-yield savings accounts?

I'll be honest -- most of my cash is in a high-yield savings account (HYSA). It's been earning around 4.00% APY, and I love the flexibility.

Yes, HYSA rates are variable and can drop anytime. In fact, we've already seen a couple banks lower their rates in anticipation of a Fed rate cut.

But, they're perfect for folks who need access to their cash at the drop of a hat.

And even if rates decrease, it's not like they'll drop to zero overnight. We'll likely see a gradual decrease, which means APY's could still stay above 3.00% in the short term.

You won't earn quite as much as with a CD, but you'll keep your money liquid and penalty-free.

Not sure what to choose? Do both

There's no rule saying you have to pick one or the other. Many people split their savings between an HYSA and a CD.

That way they earn a high yield on the money they don't need right now, while keeping any emergency funds accessible.

Here's how a simple split could look if you had $10,000 in savings:

• $5,000 in a 12-month CD at 4.00% = $200 interest
• $5,000 in a HYSA at 3.50% = ~$175 interest (assuming a couple rate drops)
• Total interest = ~$375 with minimal effort or risk

Not bad, especially if you're the kind of person who likes guaranteed wins.

No, it's not too late to buy CDs in 2025

In fact, short-term CDs are still offering some of the best returns we've seen in years.

But with rate cuts potentially just months away, the window to lock in these yields could close fast.

So whether you're parking short-term cash or planning for a 2026 goal, now's a smart time to act.

Explore our best CD picks here, with rates up to 4.25% APY