Most Banks Are Cutting Rates. Discover Just Raised Its 12-Month CD to 4.05%
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If you've checked your savings rates lately, you've probably noticed a frustrating trend: they're trending down. After the Fed lowered rates in late October, most banks quickly followed, cutting APYs on CDs and high-yield savings accounts.
But in a rare twist, Discover® Bank just went the other direction. Discover® Bank raised the rate on its 12-month CD to 4.05% APY -- one of the few banks moving up while everyone else moves down.
That's a big deal in a cooling rate environment. When most institutions are quietly pulling back, Discover® Bank's increase signals it's still competing hard for deposits, and giving savers a chance to lock in a stronger return before yields drop even more.
Why this stands out in 2025
Typically, banks take their cue from the Fed. When benchmark rates drop, so do payouts on your savings. But Discover® Bank's bump says it's not ready to join the rate-cut crowd just yet.
Locking in 4.05% APY for 12 months could look even better a few months from now if competitors keep trimming. On a $10,000 deposit, that's about $405 in guaranteed interest. And unlike a savings account, your rate stays fixed the entire term.
Discover CD
On Discover Bank's Secure Website.
Why a 12-month CD hits the sweet spot
If you're trying to balance safety and flexibility, a 1-year CD often strikes the right middle ground. It's long enough to earn a stronger return, breaking into the 4.00% range, but short enough that your money isn't tied up for years. You'll know exactly what you're earning and when your funds become available again.
Many savers use a 12-month CD as part of a broader CD ladder strategy, pairing it with shorter and longer terms to lock in a mix of higher rates and easier access. But even on its own, a 1-year CD gives you the best of both worlds: stability and a solid yield.
What to know before opening
Discover® Bank's CDs have no minimum deposit requirement, so you can start with whatever amount fits your savings goals. Early withdrawals do come with a penalty, so it's best for money you know you can set aside for the full year. There are no monthly fees, and your deposits are FDIC insured up to $250,000 per depositor, per ownership category.
If you've been waiting for the right time to lock in a short-term rate, this could be it. Most banks are heading down -- Discover® Bank just gave savers a reason to look up.
Don't miss the chance to put your money to work with guaranteed, hassle-free growth. Explore Discover® Bank's CD options now and lock in a rate before it changes.
Our Research Expert
Brooklyn Sprunger is a full-time Content Manager and Personal Finance Writer at Motley Fool Money, where she oversees product reviews and ratings while also writing about credit cards, bank accounts, investing, auto insurance, and other personal finance topics. She has worked in financial content since 2018, including more than four years at The Motley Fool. When she’s not writing or editing, Brooklyn is likely hiking and watching the Tennessee Vols.