The Top 1-Year CD Rate Just Climbed Today—And You Can Flex the Term

Core Insights - Farmers Insurance Federal Credit Union has launched a new 1-year certificate of deposit (CD) offering a 4.25% annual percentage yield (APY), surpassing the previous high of 4.16% [2][9] - The new CD also provides flexible term options of 3, 6, or 9 months at the same 4.25% APY, catering to different savings needs [3][9] Market Comparison - The 4.25% rate positions this CD as the highest available nationwide for 3-month, 9-month, and 1-year terms, providing savers with competitive options [5] - However, for a 6-month term, Connexus Credit Union offers a higher rate of 4.50% on a 7-month CD, while Climate First Bank provides a 4.27% rate for a 6-month term with a lower minimum deposit requirement [6] Importance of CD Rates - Locking in a competitive CD rate is crucial for savers, especially with inflation at approximately 2.7%, as it helps maintain the purchasing power of savings [4] - Longer-term CDs (18 months to 5 years) currently offer rates between 4.00% and 4.20%, which may be beneficial if interest rates decrease in the future [8] Safety Considerations - Deposits in both larger banks and smaller institutions are federally insured up to $250,000 per depositor, ensuring safety regardless of the institution's size [7] Strategic Savings Approach - CDs are best suited for funds that can be set aside for a specific period, allowing savers to secure a fixed return without worrying about rate fluctuations [10] - For more flexible cash needs, high-yield savings accounts, which currently offer rates between 4% and 5%, may be more appropriate, suggesting a mixed strategy could be beneficial for savers [11]