Certificate of deposit rates remain significantly above national averages as savers rush to lock in competitive yields before further declines. The Federal Reserve reduced its target interest rate three times in 2025, creating a ripple effect that has pushed deposit account rates lower. Financial experts suggest this may be the last opportunity for savers to secure today’s elevated CD rates before they drop further.
According to recent data, the highest CD rate currently available is 4% APY, offered by Marcus by Goldman Sachs on its 1-year certificate of deposit. Meanwhile, the national average interest rate for a 1-year CD stands at just 1.61% as of January 2026, according to the most recent FDIC data.
Best CD Rates Outpace National Averages
The gap between top-tier CD rates and national averages highlights the importance of shopping around for competitive yields. Online banks and credit unions consistently offer more attractive rates compared to traditional brick-and-mortar institutions, largely due to lower overhead costs. These savings are passed directly to consumers through higher annual percentage yields on savings products.
However, today’s CD rates represent some of the highest levels seen in nearly two decades. This trend stems from the Federal Reserve’s sustained efforts to combat inflation by maintaining elevated interest rates through much of 2024 and early 2025.
Why Online Banks Lead in CD Rates
Financial institutions without physical branch networks can allocate more resources toward customer returns. Online banks typically feature the most competitive certificate of deposit rates available in the current market. Additionally, these digital-first institutions often provide streamlined account opening processes and responsive customer service through mobile apps and online platforms.
In contrast, traditional banks with extensive branch networks face higher operational expenses. These costs often translate to lower yields on deposit products, including certificates of deposit and savings accounts.
How to Find the Best Certificate of Deposit Rates
Experts recommend comparing offers from multiple financial institutions before committing funds to a CD. Rate comparison websites allow savers to quickly evaluate options across dozens of banks and credit unions. Beyond the advertised APY, consumers should examine minimum deposit requirements, which vary significantly between institutions.
According to financial advisors, higher CD rates sometimes come with steeper minimum deposit thresholds. Savers should ensure their planned deposit amount aligns with account requirements to qualify for promotional rates. Furthermore, reviewing terms and conditions proves essential, particularly regarding early withdrawal penalties and automatic renewal policies.
Alternative CD Options Worth Considering
Some institutions offer no-penalty CDs that provide withdrawal flexibility without fees before the maturity date. These products typically feature slightly lower rates than traditional certificates of deposit but offer liquidity advantages for savers uncertain about their cash flow needs. Additionally, CD laddering strategies allow investors to spread deposits across multiple maturity dates, balancing access to funds with competitive yields.
The term length selection should align with individual financial goals and expectations about future rate movements. Shorter-term CDs provide flexibility to reinvest at potentially higher rates, while longer terms lock in current yields against future declines.
Interest Rate Environment Shapes CD Strategy
The Federal Reserve’s three rate cuts in 2025 signal a shift toward monetary easing after an extended period of restrictive policy. This transition typically leads to declining yields on deposit accounts over subsequent months. Financial institutions adjust their CD rates in response to changing federal funds rate targets, though the timing and magnitude vary by institution.
Meanwhile, savers face a strategic decision about whether to secure current rates or wait for potential future increases. Market analysts note that further rate cuts remain possible if economic conditions warrant additional monetary stimulus.
The Federal Reserve’s next policy meeting will provide additional clarity on the interest rate trajectory for 2026. Until then, savers seeking guaranteed returns may benefit from acting before CD rates decline further, though future policy decisions remain uncertain.
