This Account Pays 4.55% APY -- Is It the Best Deal in May 2025?

If you're looking to lock in a high APY on a certificate of deposit (CD), now may be the time.

After years of high rates, a number of banks have quietly reduced their CD yields over the last few weeks. That's because the Federal Reserve is expected to lower interest rates later this year -- possibly as soon as June. That means you should lock in a CD sooner rather than later if you're interested.

Right now, United Fidelity Bank is offering the highest return that we've found -- a 6-month CD that pays 4.55% APY. But how do you know when you've found the right CD rate and term length for you?

Why CD rates may be falling soon

CD rates often track closely with the federal funds rate, overseen by the Federal Reserve. Even before the Fed officially announces a cut, banks might begin decreasing their own rates in anticipation. So if you're looking for high APY -- especially on a short-term CD -- locking in your rate now is the way to go.

Another consideration of a shorter-term CD is that -- at the risk of stating the obvious -- it ends sooner, meaning you'll get a quicker return on your money. That could be good or bad, depending on how soon you need your money back and where rates go from here.

Why a long-term CD might be a smarter move

Shorter-term CDs are currently paying some of the highest yields, and United Fidelity Bank's 6-month term gives you a mix of earnings and flexibility. But it could also mean you miss out on more total value by going with a longer-term CD.

For example, putting $5,000 into a 6-month CD that earns 4.55% APY would earn you $112.48 in interest. But if you put that same $5,000 into a 14-month LendingClub CD -- which currently earns 4.10% APY -- you'd get $239.97 in interest.

The downside, of course, is that you have to lock up your money for twice as long. But you're also getting a comparable 4.10% APY -- a rate that might not be available when your shorter, 6-month CD ends.

The same goes for something like high-yield savings accounts (HYSAs), which are offering comparable returns -- and more flexibility -- but can (and will) lower rates whenever they want.

In short: If you want a faster return on your money, choose a shorter-term CD. But if you're okay locking up your cash for a year or more to earn more in total interest, a longer-term CD is the way to go.

Ready to lock in your cash and start earning? Open a LendingClub CD with a minimum deposit of just $500 and get 4.25% APY for 14 months today.

Should you wait or act now?

If you're still holding out for higher CD rates, you're likely going to miss out. Many banks have already started pulling back, and the Fed's looming rate cuts mean better deals are unlikely for the time being.

If you're still on the fence about locking away your money, look into an HYSA instead. Barclays Tiered Savings pays 3.90% APY on balances under $250,000 with no account minimums. Your rate won't be locked in, but you'll earn more interest until rates drop further, and your cash will be available to you at any time. Open a Barclays Tiered Savings account today.