Best CD rates today, December 31, 2025: Lock in up to 4% APY

Core Insights - Deposit account rates are declining, but competitive returns on certificates of deposit (CDs) can still be locked in, with the best CDs offering rates above 4% [1] Group 1: Current CD Rates - The best short-term CDs (six to 12 months) currently offer rates around 4% to 4.5% APY, with Marcus by Goldman Sachs offering the highest rate of 4% APY on its 1-year CD [2] - Historical trends show that CD rates were significantly higher in the early 2000s but fell to around 1% APY for one-year CDs by 2009 due to economic slowdowns and Federal Reserve rate cuts [2] - The average rates on 6-month CDs fell to about 0.1% APY and 5-year CDs to 0.8% APY by 2013, reflecting the impact of the Fed's near-zero interest rate policy [3] Group 2: Economic Influences on CD Rates - Between 2015 and 2018, the Fed's gradual rate increases led to a slight improvement in CD rates, marking the end of nearly a decade of ultra-low rates [4] - The COVID-19 pandemic prompted emergency rate cuts by the Fed, resulting in new record lows for CD rates [4] - Following the pandemic, the Fed raised rates 11 times between March 2022 and July 2023 to combat inflation, leading to higher APYs on savings products, including CDs [5] Group 3: Future Trends and Considerations - As of September 2024, the Fed began cutting the federal funds rate, resulting in a steady decline in CD rates from their peak, although they remain high by historical standards [6] - Traditionally, longer-term CDs offered higher interest rates, but currently, the highest average CD rate is for a 12-month term, indicating a flattening or inversion of the yield curve [6][7] - When choosing a CD, factors such as goals, type of financial institution, account terms, and inflation should be considered to ensure the best fit for individual needs [8]