Key Takeaways
- The Federal Reserve will announce its interest rate decision next Wednesday, and it’s almost certain to keep rates unchanged.
- Rate cuts are ultimately expected in 2025, with markets pricing in reductions of at least a half percentage point by the end of the year.
- The best savings account rates typically follow the federal funds rate, so they’re expected to remain steady for the time being.
- CD rates, however, often adjust in anticipation of Fed moves, so the best CD rates could start to drop once a rate cut appears likely.
- However, with the economic outlook clouded by President Donald Trump’s shifting tariff policies, Fed rate forecasts are more tentative than usual.
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What to Expect From the Fed Next Week and Through 2025
Through three consecutive meetings this year, the Federal Reserve has kept the federal funds rate steady. This followed a series of three rate cuts between September and December 2024, which reduced the benchmark rate by a full percentage point. Prior to that, the Fed held its key rate at a 23-year high for 14 months.
The Fed’s rate-setting committee will meet again next week. While the official decision won’t come until Wednesday afternoon, the CME Group’s FedWatch Tool currently shows a 0% chance of the central bank lowering its benchmark rate next week.
Another rate hold is expected for the July 30 announcement as well, with less than a 20% probability of a July rate reduction. That means we likely won’t see a Fed rate cut until the September meeting. (The Fed is not scheduled to meet in August.)
By year-end, however, traders are pricing in about a 70% chance of at least half a percentage point in rate cuts by the December meeting. This would most likely occur through two 0.25-point reductions.
Warning
As always, we caution against relying too heavily on long-term rate predictions, as the Fed bases each decision on the most current economic data. This is particularly true right now, given the potential impact of the Trump administration’s tariff policies on inflation and jobs.
How Next Week’s Fed Announcement Could Affect Savings and CD Rates
Since the Fed is not expected to change rates next week, we don’t foresee any significant shifts in savings account rates in the short term. Because banks and credit unions can adjust their rates on savings accounts quickly, they typically wait for a Fed move before making any changes on those accounts.
Of course, there’s never a guarantee that the top savings account rate will remain available, as any given offer can be adjusted at any time. But across our ranking of the best high-yield savings accounts, we don’t anticipate that next week’s Fed announcement will trigger any meaningful change in the general range of APYs you see there, which currently run from 4.30% to 5.00% APY.
CD rates, however, work a bit differently. Unlike savings accounts, CDs offer not just a current rate, but a guaranteed rate for the future—meaning banks and credit unions are cautious about locking in rates they might regret later. As a result, institutions often adjust CD rates in anticipation of an upcoming Fed move, especially when there’s high confidence in the Fed’s decision.
The best CD rates are currently as high as 4.60% APY. What does the Fed’s meeting mean for them next week? It largely depends on the Fed’s statement and the signals Fed Chair Jerome Powell provides in his post-meeting press conference. Additionally, the Fed’s quarterly “dot plot” projection will give insight into future rate expectations.
If the Fed hints at becoming more comfortable with a near-term rate cut, some institutions may begin lowering their CD rates sooner rather than later. However, if the Fed sticks to its wait-and-see stance, CD rates are likely to remain stable until there’s stronger evidence the central bank is approaching a move.
When CD rate declines do occur, they are likely to be gradual, rather than drastic (unless the Fed makes an unexpected decision). That said, the outlook remains uncertain, since the impacts of President Donald Trump’s tariff policy on inflation, economic growth, and—by extension—Fed monetary policy remain to be seen.
Daily Rankings of the Best CDs and Savings Accounts
We update these rankings every business day to give you the best deposit rates available:
Important
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than 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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