Home / Business and Economy / Rates Dip as Fed Cuts Bring Changes to CD Yields
Rates Dip as Fed Cuts Bring Changes to CD Yields
17 Nov
Summary
- Fed cuts rates in Sept. and Oct. 2025, more cuts expected
- Best CD rates now up to 4.20% APY, but may decrease further
- Smaller banks offer higher CD rates than major institutions
In 2025, the Federal Reserve has been actively adjusting interest rates, which has impacted the yields on certificates of deposit (CDs). After declining in 2024 as the Fed cut rates, CD yields stabilized in early 2025. However, the central bank has since made two more rate cuts, one in September and another in October.
As a result, the best CD rates on the market have now reached up to 4.20% annual percentage yield (APY). Experts warn that these high rates may not last, as the Fed is expected to potentially make another cut when it meets in December. Therefore, those looking to earn a great return on a CD should act quickly to lock in the current favorable rates.
The article highlights that smaller regional banks and online institutions typically offer more competitive CD rates compared to major financial institutions like Chase, PNC, and U.S. Bank. These larger banks often prioritize more profitable products like loans and credit cards, leading to lower APYs on their CDs.
Investors are advised to closely monitor the Fed's monetary policy decisions, as changes to the federal funds rate directly impact CD yields. With the current federal funds rate standing at 3.75%-4.00%, further rate cuts could result in a continued decline in CD rates in the coming months.
