From Yahoo Finance · · 2m
CD rates hit 4.40% as deposit returns decline
Lock in competitive certificate of deposit rates today before they fall further from recent peaks.
In brief
Lock in competitive certificate of deposit rates today before they fall further from recent peaks. CD rates are declining but still historically high, with the best 2-year rate at 4.40% APY from Happen Bank. Originally reported by Yahoo Finance.
Top CD rate reaches 4.40%
Happen Bank offers the highest CD rate today at 4.40% APY on its 2-year certificate of deposit. Short-term CDs of six to 12 months generally pay between 4% and 4.5% APY.
Rates are falling from peaks
Deposit account rates are declining, but you can still lock in competitive returns. The best CDs continue to pay 4% or higher, preserving your earning power.
“You can lock in a competitive return on a certificate of deposit (CD) today and preserve your earning power.”
The 2000s financial crisis impact
CD rates fell sharply after the 2008 financial crisis. By 2009, one-year CDs paid around 1% APY and five-year CDs returned less than 2% APY.
Record lows in the 2010s
The Fed kept rates near zero after the Great Recession, causing CD rates to plummet. By 2013, six-month CDs averaged just 0.1% APY while five-year CDs returned 0.8% APY.
Pandemic drove rates down again
CD rates improved slightly between 2015 and 2018 as the Fed raised rates. But COVID-19 in early 2020 triggered emergency Fed rate cuts, pushing CD rates to new record lows.
Inflation sparked rate hikes
Spiraling inflation prompted the Fed to hike rates 11 times between March 2022 and July 2023. This led to higher APYs on savings products, including CDs.
Fed cuts began in 2024
The Fed started cutting rates in September 2024 after determining inflation was under control. Three more cuts followed in 2025, causing CD rates to decline from their peak.
Yield curve shows uncertainty
Longer-term CDs usually offer higher rates, but today's highest average rate is for 12-month terms. This flattening suggests uncertain economic times or expectations of declining rates.
How to pick the right CD
Consider your timeline, compare rates across online banks and credit unions, and check withdrawal penalties. Online banks often offer higher rates due to lower overhead costs.
Watch out for inflation risk
CDs offer safe, fixed returns but may not keep pace with inflation over longer terms. Factor this into your decision about how much to invest and for how long.
The main idea
CD rates are declining but still historically high, with the best 2-year rate at 4.40% APY from Happen Bank.
