CD Rate Forecast: Are CD Rates Going Up in 2025?
A falling-rate environment began in 2024, was steady for half of 2025 and resumed as the Fed cut its rate in Sept. Uncertainty about future rate cuts has crept in.
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Interest rates on certificates of deposit play an important role for some savers. CDs’ fixed rates can offer guaranteed returns for several months or years, and locking in a high CD rate can mean earning strong yields even if the economy enters a low-rate environment. Here’s an overview of where CD rates might be headed.
» COMPARE: NerdWallet’s best CD rates
Are CD rates going up?
No, CD rates have been falling slowly or staying steady in 2025 given some economic uncertainty. Both national average and high-yield CD rates began to noticeably drop around September 2024, which is when the Federal Reserve began lowering its federal funds rate. The last rate cut was in December 2024. Nearly a year later, the Fed finally made its first rate cut of 2025 in September. Some current political and economic events may impact inflation's direction, though, making the near future of rate movements somewhat hard to predict.
Here’s a snapshot of recent rate movement: From September 2024 to January 2025, the midpoint for one-year CD rates at 21 online banks and credit unions dropped from 4.60% to 4.00% annual percentage yield, according to a NerdWallet analysis. Through late August, however, the midpoint for one-year CD rates remained at 4.00%. Now’s the time to take advantage of current high-yield CDs before rates drop due to the September 2025 Fed rate cut.
» Skip down to see more on 2025 CD rate changes
When is the next Fed meeting?
Despite some of the recent dips, CD rates are still at some of highest in more than a decade. A big reason why rates are at such highs is the frequency with which the Fed increased its federal funds rate in 2022 and 2023. The Fed pushed up the target range of this Fed rate, which is the interest rate banks use to borrow money from each other, as one tool to curb inflation. From March 2022 to July 2023, the Fed raised its rate 11 times. After a year of no rate changes, the Fed lowered its rate three times in 2024 from September to December. The pattern continued where the Fed held off on rate changes for the first half of 2025 and finally cut its rates in September 2025.
Banks generally adjust their rates on new CDs in the same direction as Fed rate changes. Credit unions — the not-for-profit equivalent to banks — similarly raise rates on their CDs, known as share certificates. Learn more about what Fed rate decisions mean for CDs and savings accounts.
» Dive deeper: What happens now that the Fed finally cut rates?
CD rate trends
High-yield CDs tend to be at online banks and online credit unions, which have rates that are whole percentages higher than national average CD rates. For example, the national averages are 1.70% for one-year CDs and 1.34% for five-year CDs. Top one-year yields are around 4.00%, and the best five-year CD rates are closer to 3.80%.
Short-term CD rates have had higher yields than longer-term rates since the end of 2022, according to a NerdWallet analysis of national average and high-yield CDs. However, short-term rates in mid-2025 are dropping faster than long-term rates, so the gap may not last.
Marcus by Goldman Sachs 7 Month No-Penalty CD
4.00%
7 months
Member FDIC
Discover® CD
3.50%
6 months
Member FDIC
Discover® CD
4.00%
1 year
CD rate forecast: 2025
The Fed dropped its rates for the first time in 2025, by 0.25 percentage points to a rate range of 4.00% to 4.25%. This came after its sixth regularly scheduled meeting of the year on Sept. 16-17. Projections remain mixed on whether the Fed will continue dropping its rate, but October may bring another cut, according to CME FedWatch (accessed on Sept. 17, 2025). When the Fed rate drops, CD rates will likely follow suit, though it’s up to each bank and credit union if and when that occurs.
The Fed "is likely to face significant challenges in returning inflation to its 2% target," and tariffs add to the risk of a recession, according to a March 2025 forecast from the American Bankers Association’s Economic Advisory Committee. The committee consists of chief economists from some of the largest U.S. banks.
"The near-term path [for rates] looks a bit more clear. The Fed is very likely to decrease rates, and they’ve been pretty consistent on where they think they’re going to land — in that 3% to 3.5% range. What happens between here and there, there are still some question marks," Adam Stockton, head of retail deposits and lending at the banking analytics firm Curinos, said in a September interview. Tariffs and global conflict seem to be two driving factors, Stockon said, but the impact, particularly from tariffs, is not totally clear.
2025 data highlight: Gradual dips for high-yield CDs
CD rates at nearly two dozen online banks and credit unions saw a slowdown in their descent from December 2024 through August 2025. Longer-term CDs stayed more steady while short-term CDs dipped slightly. This gradual decrease contrasts to larger rate drops around September 2024, which was when the Federal Reserve made its first rate cut since 2020. The more recent rate dips were less than or equal to 10 basis points (0.10 percentage point). With the Sept. 2025 rate cut, steeper drops are likely.
CD term | Median APY: Sept. 2024 | Median APY: Jan. 2025 | Median APY: August 2025 |
|---|---|---|---|
6-month CD | 4.55%. | 4.00%. | 3.90%. |
1-year CD | 4.60%. | 4.00%. | 4.00%. |
3-year CD | 3.90%. | 3.50%. | 3.50%. |
5-year CD | 3.60%. | 3.50%. | 3.50%. |
See methodology details | |||
Take advantage of today’s CD rates
Lock in CD rates sooner than later. CDs are typically best for specific goals, such as protecting some savings from inflation’s effects or earmarking a fixed sum for a large purchase within five years, such as a car or house.
Remember specialty CDs. If you’re unsure about getting a CD now, know that some types of CDs offer flexibility. Bump-up CDs allow you to increase the rate at least once during a CD term if new CD rates go up. But in a falling-rate environment, it’s more likely for bump-up CD rates to stay the same. No-penalty CDs give you a fixed rate plus the opportunity to jump ship for free.
Consider a CD ladder to hedge your bets. A CD ladder strategy reduces the stress around timing your CDs. Split up an investment equally into several CDs of different term lengths, such as one year, two years and three years. When each CD matures, reinvest in a longer-term CD or, if you need the cash, withdraw. Ideally, though, you can have multiple long-term CDs that mature at staggered intervals. You mix short-term CD access with long-term rates.
Compare other short-term ways to save and invest. For more everyday savings with the same low risks as CDs, consider a high-yield savings account or money market account, which have top rates above 4% APY. Or, if you’re looking to invest, consider more ways to invest your savings.