Will CD Rates Fall After the Fed's June 17-18 Meeting?

As of today, interest rate traders see a 99% chance that the Federal Reserve will keep interest rates unchanged at its June 17-18 meeting next week, according to the CME FedWatch Tool. But what does that mean for the CD market?

In short, it means that banks probably won't cut certificate of deposit (CD) rates right away. But there's still a good chance that the Fed will decrease interest rates later this year -- and if that happens, CD rates will likely follow.

Here's what you need to know about when to lock in your CD rate.

CD rates largely follow the Fed

CD rates are tied closely to the Fed's actions. That means when the Fed cuts rates, banks usually lower their APYs on CDs and other products.

Right now, some of the best CD rates can be found on short-term CDs of a year or less, with APYs reaching as high as 4.60%.

Some top CDs have no minimum deposit requirement, while others may require as much as $5,000 to open, so it's a good idea to read the fine print. CD rates right now are still among the highest rates we've seen in years, but they may not last if the Fed starts implementing cuts.

Don't wait too long to decide

It's possible rates will stay where they are through the summer -- but the longer you wait, the higher the chance banks start pulling back. CD rate drops could even come before the Fed cuts rates; some banks have already trimmed their rates in anticipation.

If you're holding cash or waiting for a better offer, you may end up missing out. Locking in a CD now can be a smart way to hedge against falling rates -- as opposed to high-yield savings accounts, whose rates are high now but can change at any time.

If the Fed holds rates steady this month, CD rates may stick around their relative highs for a bit longer. But with cuts likely coming later this year, you may not want to hesitate.

Looking to protect your money? Lock in a top APY with one of our favorite CDs today before it's too late.