Certificate of deposit rates have largely held steady lately, but that doesn’t mean you should wait too long to open an account. Although the Federal Reserve paused interest rates for the fourth time in a row this month, some experts believe it could begin cutting rates as soon as this month. That means now’s the time to lock in your annual percentage yield while APYs remain high.
To help you narrow down your options, we’ve rounded up our top choices.
Best CD rates for July 2025
| Bank | 6-month APY | 1-year APY | 3-year APY | 5-year APY |
|---|---|---|---|---|
| BMO Alto | 3.00% | 3.00% | 2.75% | 2.85% |
| CommunityWide Federal Credit Union | 4.50% | 4.40% | 3.80% | 3.40% |
| First Internet Bank of Indiana | 4.49% | 4.40% | 3.97% | 3.97% |
| Bread Savings | 4.45% | 4.00% | 4.00% | 4.00% |
| CFG Bank | N/A | 4.15% | 3.75% | 3.65% |
| LendingClub | 4.00% | 3.75% | N/A | 3.40% |
| MYSB Direct | 4.15% | 4.00% | 3.91% | 3.91% |
| NexBank | 4.14% | 4.35% | 3.44% | 3.29% |
Average CD rates
Because APYs represent the yield you’ll earn for a year, CD terms shorter than 12 months typically have lower returns. Right now, short-term CDs have higher APYs than most long-term CDs. That means you can earn a decent return for locking up your money for a short time and you’ll have access to your funds sooner. It’s always a good idea to compare rates at different banks and credit unions before opening a CD, to get the best offer to fit your financial goals.
Below is a look at the average CD rates by term based on those tracked by the Federal Deposit Insurance Corporation and those we tracked at CNET. The FDIC includes rates from major national banks, which are historically lower than online-only banks.
Type | 6-month | 1-year | 3-year | 5-year |
|---|---|---|---|---|
FDIC-tracked | 1.57% | 1.62% | 1.34% | 1.33% |
CNET-tracked | 4.00% | 3.98% | 3.59% | 3.59% |
Note: APYs shown are as of June 26, 2025. CNET’s editorial team updates this information regularly. Source: FDIC.
Best CD rates by bank
Is now a good time to open a CD?
Whether now is a good time to lock in a CD depends on your financial goals.
Bernadette Joy, founder of Crush Your Money Goals, notes that the real benefit of a CD is locking in a fixed return. Joy put her money into two one-year CDs that offered a bit over 4% in February 2023, then witnessed rates go even higher.
“I have zero regrets on not waiting — that money in the CD was not money I was planning to spend any time soon and it actually helped me take the mental gymnastics out of thinking of what to do with the money,” Joy said. She also opened an 11-month CD with a 6.15% APY.
CD rates have been falling for months and the possibility of rate cuts in 2025 means they could fall even further. There’s a decent chance that the longer you wait to open a CD, the lower the APY you might be able to get.
What to know before opening a CD
When you’re ready to open a CD, consider these factors to choose the best one for you:
- Term: Think about how long you can leave the money deposited in a CD account. If you’ll need access to your funds before a CD term ends, consider a high-yield savings account with more liquidity, a shorter CD term or a no-penalty CD to avoid paying an early withdrawal penalty.
- APY: Look for the highest yield available for the CD term you’ve selected. Online-only banks and credit unions usually offer the best rates but if a minimum deposit is required, make sure you’re comfortable with the amount or choose another bank that doesn’t have that requirement.
- Type: There are many types of CDs that still give you a guaranteed rate of return while offering more flexibility than a standard CD. Some CD types have lower APYs and limited CD terms to choose from. Consider your financial goals and various CD options to determine what’s best for your money.
- Early withdrawal penalty: Unless you choose a no-penalty CD, most banks charge an early withdrawal penalty if you need to pull money from your CD before the term ends. This is usually a period’s worth of interest, depending on the term and the bank. If you’re worried about not having access to your funds, consider another savings option or a bank with a lower early withdrawal penalty.
- Minimum deposit: CDs allow only a one-time initial deposit and some banks require a minimum amount to open an account. If this is a problem, consider an account with a lower (or no) deposit requirement.
Alternatives to CDs
If you want to make regular contributions to your savings, or you’re looking for a higher rate, there are other savings options worth exploring.
If you need the flexibility to deposit and withdraw money regularly while still earning a high yield, consider a high-yield savings account . Although high-yield savings accounts have variable interest rates — meaning they rise and fall based on the economy and the bank’s preferences — top rates are currently as high as 5% APY.
The main appeal of a high-yield savings account over a CD is flexibility. You may be charged an early withdrawal penalty if you take money out of a CD before the term ends but you can access funds in a savings account whenever you need them. This makes it a good spot to stash your emergency fund or money for short-term goals like a holiday fund or concert tickets .
A money market account functions like a savings account but often has checking account privileges like the ability to write checks or make transactions with a debit card. Money market accounts also have competitive APYs, although most are lower than the best CD rates.
Most money market accounts require a high minimum balance to earn interest. Although these accounts usually come with a debit card and check writing, you’ll be limited to a certain number of transactions per month.
CDs and treasury bonds are low-risk savings options with a fixed rate. Most CDs are insured by the National Credit Union Association or the Federal Deposit Insurance Corporation; bonds are backed by the government or company that sells them.
You’ll have a guaranteed return as long as you don’t withdraw money before the bond or CD matures. If you do, you could miss out on future interest and pay a penalty that lowers the value.
Other types of CDs to consider
Several types of CDs offer more flexibility than a standard CD. For example, an add-on CD lets you add funds after your initial deposit, while a bump-up or step-up CD increases your yield if rates go up. A no-penalty CD allows you to withdraw your money without incurring an early withdrawal penalty.
If there’s a chance you’ll need access to the money in your CD before the term ends, a no-penalty CD is a good option. No-penalty CDs typically offer lower yields than traditional CDs because you can take your funds out before maturity, said Chelsea Ransom-Cooper, managing partner and financial planning director at Zenith Wealth Partners .
If you’re looking for flexibility and a better return, another option would be a money market account, Ransom-Cooper added. Here’s a look at rates for no-penalty CDs .
A bump-up CD allows you to take advantage of a higher rate for your CD term if one becomes available after you open your account. The APY may still be lower than a standard CD.
The advantages of a bump-up CD are determined by the rate environment. If you think rates might go up and don’t want to be stuck with a low APY, this could be a fail-safe technique.
Because the Federal Reserve has paused rates at its last three meetings, and is expected to cut them later this year, you should evaluate if this kind of account makes sense for you.
How to open a CD
Here’s a step-by-step guide to help you open a CD.
- Compare banks and rates. You can open a CD at your local physical branch or online. Most retail banks and credit unions also offer CDs or share certificates, as do online-only banks. Make sure the bank or credit union you choose is FDIC- or NCUA-insured to protect your funds. All the banks we track above are FDIC- or NCUA-insured.
- Choose the CD type and term. When you’re ready to open an account, you’ll choose the CD type and term you want. Be sure to compare rates and weigh all options based on your savings goals.
- Complete an application. Just like with a checking or savings account, you’ll fill out an application with your personal information, including your name, birth date, Social Security number (or Individual Taxpayer Identification Number) and address.
- Fund your account. When opening a CD, you’ll need to make a one-time deposit. You won’t be able to make any additional contributions so you should open the CD only when you have the funds available.
After you’ve set up your account, you’ll begin earning interest. When your CD matures at the end of the term, you can withdraw your funds or reinvest them into another CD at the then-current rate.
FAQs
Choosing between a CD, money market or high-yield savings account depends on your financial goals, timeframe and liquidity needs.
For instance, if you’re starting from scratch, you may choose a high-yield savings account to build up your savings. If you plan to have a high balance but need debit card access, you might go with a money market account. If you already have the funds and won’t need them for a while, a CD is a good option.
Because early withdrawal penalties vary depending on the bank and CD term, there isn’t a standard way to calculate them. Most early withdrawal penalties equal a loss of interest or dividends for a certain period. A longer CD term generally has a greater penalty for early withdrawal.
If you need access to your funds before the CD matures, some banks require you to withdraw the entire amount of the account, while others charge a penalty only on the amount of a partial withdrawal. If the early withdrawal penalty exceeds the interest you’ve earned, you’ll lose money on your principal investment.
Many banks tie the APY that CDs earn to the federal funds rate established by the Federal Reserve. The federal funds rate is the rate banks use to lend and borrow money. The rates on CDs can rise and fall based on actions taken by the Fed to regulate the health of the economy.
For instance, the sequence of Fed rate hikes from 2022 to 2023 caused APYs to increase. A series of rate pauses after that caused APYs to largely hold steady. Since the Fed’s September rate cut — its first in years — we’ve seen CD rates fall, and they’ve continued falling since the Fed cut rates again in November and December. Although the Fed chose to hold rates steady in January, March, May and June, experts expect rate cuts to resume later this year.
You typically won’t lose money with a CD, as long as you keep your funds invested until the term ends. If you withdraw money from your CD early, you’ll often pay an early withdrawal fee that’s equal to a certain amount of interest. This fee could cut into your principal — the amount you initially deposited — if the fee is greater than the interest you accrued.
In addition, a CD at an FDIC- or NCUA-insured bank or credit union protects your deposit for up to $250,000 per person, per account category in case of a bank failure or loss. The value of a brokered CD purchased through an investment firm or brokerage can fluctuate and isn’t always protected by federal insurance.
You should leave your money untouched in a CD until the term you’ve chosen ends. Then you can renew it for the same period, choose another CD term or bank altogether or withdraw your funds for something else.
If you don’t withdraw your money when the term ends, some CDs are set up to automatically renew, and you might get locked into a lower interest rate. CDs generally offer a grace period of a few days so you can decide whether to withdraw the money or renew the CD. It’s a good idea to have a plan for your funds once the CD term ends.
Our CD methodology
CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We selected the CDs with the highest APY for five-year terms from among the organizations we surveyed and considered rates for shorter terms if five-year terms were identical or unavailable. All information is reviewed by experts for accuracy.
Banks we reviewed
Alliant Credit Union, Ally Bank, America First FCU, American Express National Bank, Barclays, Bask Bank, Bethpage, BMO Alto, Bread Savings, Capital One, CFG Bank, CIT, CommunityWide Federal Credit Union, Connexus Credit Union, Discover, EverBank, First Internet Bank of Indiana, First National Bank of America, Forbright, Lending Club, Limelight Bank, Marcus by Goldman Sachs, MYSB Direct, NexBank, Popular Bank, Quontic, Rising Bank and Synchrony.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. We may receive compensation when you click on links to products or services offered by our partners.