Key Takeaways
- Dozens of nationwide CDs offer guaranteed returns in the 4% range right now—with a leading offer of 5.00% APY.
- Unlike savings account rates, a CD’s APY is yours to keep until the end of its term.
- Because it’s expected that the Fed will begin cutting interest rates in the spring or early summer, April is an excellent time to lock in a guaranteed return before CD rates start falling.
- Below, we share five pro tips that can boost your earnings and virtually eliminate any risk.
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These Smart CD Strategies Can Significantly Boost Your Savings
Certificates of deposit (CDs) offer an attractive feature you can’t get from a savings or money market account: a guaranteed return that can’t be lowered. A rate lock like this is especially useful because U.S. interest rates are expected to move lower this year. The Federal Reserve could even cut rates this spring.
Fortunately for you, dozens of the best nationwide CDs are offering guaranteed returns in the 4% range. In every major CD term right now, you can lock in more than 4.30% and as much as 5.00% APY with the national leader.
While CDs are pretty easy to open, several smart strategies can help you earn as much as possible while also essentially eliminating any risk.
CD Pro Tip #1. Always Shop Around
Rates on CDs vary widely across institutions. Big-name banks like Chase and Bank of America often pay rates close to zero, while smaller banks and credit unions typically pay among the highest rates in the nation.
The current national average rate on a 1-year CD from an FDIC bank is 1.78%. But shopping around for the best rates can lead you to returns more than 2.5 times that amount, with the best 1-year APY in the country clocking in at 4.60% right now.
Fortunately, we make your rate homework easy by tracking rates of about 200 nationwide banks and credit unions and ranking the 15 best APYs in each CD term. So whether you’re looking for a short 3-month CD, a long 5-year CD, or any duration in between, you can always find the top nationwide rates in our daily rankings—all of which are linked at the end of this article.
CD Pro Tip #2. Consider More Than One CD
If you feel uneasy about committing all of your CD savings to a fixed term, one way to keep your money a bit more flexible is to split your CD savings into two or three buckets and put those amounts in CDs of different lengths. For instance, you can put one portion of your savings into a 6-month CD, another allocation in a 1-year certificate, and maybe a third amount in an 18-month CD.
By spreading your funds in different terms, you can diversify how long you will have to wait to regain access to your funds. In the example above, some of your savings would become available every six months. It also means that if an emergency hits and you have to cash in a CD early, you may be able to get by with only breaking one CD while keeping the others intact.
Important
Most CDs involve an early withdrawal penalty, which you’ll incur if you opt to withdraw your funds before the CD’s maturity date. These also vary greatly across institutions, with some charging just a few months’ interest and others charging much harsher penalties. In any case, incurring an early withdrawal penalty isn’t the end of the world—but it does cut into what you’re earning. So it’s smart to hold CDs to full maturity whenever possible.
CD Pro Tip #3. Put Some Reserve in a High-Yield Savings Account
To help you avoid having to cash in a CD before it matures, it’s always wise to keep some of your savings in a liquid account, like a savings or money market account. That way, if you need to dip into your savings for something unexpected, you can start with the savings account funds and hopefully not have to cash in a CD.
But you’ll need to be strategic about the savings account you choose. You’ll want to put your “first reserve” funds in a high-yield savings account, the best of which are currently paying up to 4.60%, with more than another dozen options offering at least 4.40%. As with CDs, we monitor all of the best high-yield savings account rates and present a ranking of the 15 best APYs every day.
CD Pro Tip #4. Don’t Delay.
While we’re currently in a period of much economic uncertainty, last week, the Federal Reserve forecasted that it will lower the federal funds rate twice, at a quarter-point each, during this calendar year. Whether or not this comes to pass is anyone’s guess, but the general expectation is that the Fed will push its benchmark rate lower this year and probably again in 2026.
When they sense the Fed is ready to cut federal funds rates, banks and credit unions will begin to lower their CD rates, and they won’t necessarily wait until an official rate cut announcement. If market confidence is high that the central bank is going to lower rates at an upcoming meeting, some institutions will move ahead with CD rate reductions.
That’s why April is a great time to lock in one of today’s stellar rates while you still can. At the time of this writing, the CME Group’s FedWatch Tool indicates that financial markets are pricing in a 64% probability that the Fed will make its first 2025 rate cut by its June meeting. The more likely that becomes, the higher the odds that CD rates will begin dropping. So, delaying could mean missing out on a remarkable rate that evaporates before you lock in.
CD Pro Tip #5. Set a Future Reminder for Yourself
Anytime you open a new CD, an expert tip is to mark a pre-maturity reminder on your calendar or in a reminder app—or both so you can’t miss it. The smartest timing for this reminder is 1–2 months before your CD is set to mature.
The reason it’s so useful is that it triggers you to think ahead about what you want to do with the funds that are maturing. You’ll need to give the bank or credit union instructions on where you want your funds to go, and if you’re interested in moving them to another CD, you’ll need to do your rate shopping once again. So it’s important to give yourself enough time to do this so you can make a smart saver’s choice before the maturity date arrives.
Warning
While the automatic roll-over option you’ll likely be offered on a maturing CD seems convenient, the rates offered when rolling over are almost always sub-par. You stand to earn much more by shopping around for the current best rates and then moving your money to a new top CD.
Daily Rankings of the Best CDs and Savings Accounts
Important
Note that the “top rates” quoted here are the highest nationally available rates that Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is very different from the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that’s below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
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