You can earn up to 4.65% APY. Check out the best CD rates on February 4, 2025

The best CD rates on February 4, 2025 return up to 4.65% annual percentage yield. That means you could lock in high rates for years if you funded a certificate right now, depending on the term that’s best suited to your financial goals. Markets expect a few more Fed rate cuts this year, so there’s no time to waste.

The best CD rates on February 4, 2025: Earn up to 4.65%

The highest CD rate on February 4, 2025 of 4.65% is offered by Bask Bank on its 3-month CD. Fortune monitors the top rates offered by leading U.S. financial institutions to help readers obtain the best possible return on their CD investments. Here are the highest CD rates on February 4, 2025:

Compare CD rates by term length

Currently, CD rates are high for both short-term and long-term options. While APYs aren't the only factor to consider when choosing an institution for your CD, being aware of the highest rates available on February 4, 2025 can help you make an informed decision about how long you want to tie up your funds.

Compare CD rates at top national banks

If you're unfamiliar with many of the bank names mentioned above, there's a straightforward reason. CDs typically don't generate substantial income for major financial institutions on their own.

Large, national banks like Chase, PNC, and U.S. Bank focus on attracting customers through more profitable products, such as loans and credit cards, rather than CDs. As a result, the interest rates offered on CDs at these banks are often much lower than those available at smaller regional banks or online institutions. Additionally, to secure a good rate at these larger banks, you may be required to open other deposit accounts or deposit much higher minimums.

CD rates news 2025

Investors need to understand that CD rates change close on the heels of adjustments to Federal Reserve monetary policy, specifically when the central bank raises or cuts the fed funds rate. Anyone who invests in CDs should keep a wary eye on the Fed's policy shifts in order to anticipate potential rate changes.

Last week, the Federal Open Market Committee (FOMC) held its first meeting of 2025. There were no changes to fed funds at the meeting, suggesting that CD rates will likely remain stable for the foreseeable future. The next FOMC meeting will take place March 18-19.

In the period between September and December 2024, the Fed cut rates three times, to a range of 4.25%-4.50%. The central bank eased policy to support the economy as inflation cooled. CD yields declined rapidly from the two-decade highs that had prevailed before the Fed's rate cuts.

The high CD rates seen in 2022 and 2023 were driven by the Fed's aggressive campaign to control 40-year highs in U.S. inflation levels, which had resulted from the disruptions of the Covid-19 pandemic. Between March 2022 and July 2023, the FOMC increased interest rates a total of 11 times, from zero to a range of 5.25%-5.50%.

Keep in mind that CD rates are not far off their recent peaks, indicating favorable market conditions. Investors have the chance to lock in competitive rates on both short-term and long-term CDs. By contributing a larger lump sum to your CD investment, you can achieve considerable interest earnings.

Historical CD rates

In the early 1980s, CD rates soared into double digits, starkly contrasting rates. By 2019, however, the APY for a five-year CD was just above 3%.

Throughout the early 2020s, top rates generally stayed below 1% APY. Recently, we saw a period of rising rates, with the best offerings exceeding 5% APY for 1-year CDs. These are beginning to fall slightly, but are still much higher than pre-pandemic times.

How to get a good CD rate

Determining a "good" CD rate depends on balancing the highest rate with your ability to keep funds locked for the term. For example, a 5% APY CD over five years might not be ideal if you need liquidity sooner or if rates rise, leaving you with a lower return. Generally, rates above the national average are worthwhile. Compare rates across banks for your desired term to find the best option.

Key factors to evaluate when comparing CDs include:

• Term length: Ensure it matches your savings goals and timeline.
• APY: Higher rates are usually offered for longer terms.
• Penalties: Understand the costs associated with early withdrawals.
• Minimum deposit: Ensure you meet the required minimum balance.
• Deposit insurance: Verify Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA) coverage.

Additionally, online banks typically offer higher interest rates—but check for any minimum balance requirements and associated fees. Opting for a bank rather than a broker might help avoid unnecessary fees.

Look into offerings from online banks

Online banks and financial technology companies (fintechs) typically offer better rates than national banks. Large financial institutions generate revenue primarily through interest on loans, fees, and investments in securities.

Alternatively, smaller banks and online fintech companies attract new customers by offering competitive APYs on deposit accounts. Additionally, online banks usually have lower overhead costs, enabling them to provide better rates to their clients.

Set up a CD ladder

CD ladders are ideal for savers reluctant to lock in their money for long periods of time. By splitting savings across CDs with varying maturities, you can enjoy both short-term access and higher long-term rates.

For example, you could invest $3,000 in three staggered CDs (1-year, 2-year, and 3-year). As each CD matures, reinvest the money into a new 3-year CD. This strategy provides annual access to your money plus the interest earned.

Types of CDs you should know of

Different types of CDs serve various needs:

• Brokered CDs are purchased and sold through brokerage accounts rather than directly from banks or credit unions. Brokered CDs typically offer higher APYs than traditional CDs because they are issued by banks and then sold to brokerages.
• Callable CDs include a call feature that allows the issuing institution to terminate the CD before its maturity date. If this feature is exercised, investors receive their principal and any accrued interest up to the call date.
• Bump-up CDs allow you to request a higher APY if interest rates rise after you've opened the account. You can usually adjust the rate once or twice during the CD's term.
• No-penalty CDs do not impose penalties for early withdrawals before maturity. This type is less common and may offer lower APYs than traditional CDs.
• Jumbo CDs require a minimum initial deposit, often starting at $100,000 or more. They generally offer higher APYs than standard CDs.
• Variable-rate CDs have an APY that changes in response to prevailing interest rates. These CDs carry more risk than traditional CDs because decreasing interest rates before maturity can lead to a lower yield.