Best CD rates today, October 3, 2025 (up to 4.20% APY return)

Core Insights - CD rates are currently declining due to the Federal Reserve's decision to cut its benchmark rate three times in late 2024 and a recent cut in September 2025 [2] - The highest CD rate available as of October 3, 2025, is 4.20% APY, offered by United Fidelity Bank for a 2-year CD and First National Bank of America for a 7-month CD [3] - Online banks and neobanks typically offer the best CD rates due to lower overhead costs, allowing them to provide higher interest rates on deposit accounts [4] CD Rate Comparisons - Top CD rates currently reach about 4% APY, particularly for shorter terms of one year or less [2] - National averages for CD rates are significantly lower than the top rates available, emphasizing the need for consumers to shop around [3] Financial Institutions Offering Competitive Rates - Online banks are not the only institutions with competitive CD rates; credit unions also offer attractive rates, returning profits to their member-owners [5] - Some credit unions have strict membership requirements, but many are accessible to a broader audience [5] Considerations for Opening a CD - CDs are considered a safe and stable savings vehicle, backed by federal insurance, and allow locking in current rates [6] - Early withdrawal penalties apply if funds are accessed before the term ends, making high-yield savings accounts or money market accounts alternatives for those needing flexibility [7] - While current CD rates are high by historical standards, they may not provide sufficient growth for long-term savings goals compared to market investments [8]