Banks are currently paying varying rates on certificates of deposit, with some offering competitive returns despite a general decline. The Federal Reserve cut its benchmark rate three times in late 2024 and made three additional cuts in 2025, contributing to lower rates overall.
Top CD rates now reach about 4% annual percentage yield, particularly for terms of one year or less. Marcus by Goldman Sachs offers a 4% APY on its 1-year CD, which stands as the highest available rate today.
National average CD rates, based on FDIC data from December 2025, are much lower than these top offerings. This difference emphasizes the need for consumers to compare rates before opening accounts.
Online banks and neobanks, which operate solely via the web, often provide higher CD rates due to lower overhead costs. These institutions pass savings to customers through better rates and lower fees.
Credit unions also offer competitive CD rates. As not-for-profit cooperatives, they return profits to member-owners, though some have strict membership requirements based on associations or geographic areas.
CDs are considered safe savings vehicles, backed by federal insurance and protecting against loss in most cases. They allow savers to lock in current rates, but funds must remain deposited for the full term to avoid early withdrawal penalties.
For those needing flexible access to funds, high-yield savings or money market accounts might be preferable. While today's CD rates are high historically, they generally don't match potential market investment returns, making them less suitable for long-term goals like retirement.