Core Insights - The Federal Reserve has cut its federal funds rate three times in 2025, making it a critical time for investors to lock in competitive CD rates before potential further declines [1] - The highest CD rate currently available is 4% APY, offered by Marcus by Goldman Sachs for a one-year CD [2] CD Rates Overview - Best CD rates are generally found in shorter terms of around one year or less, with online banks and credit unions leading in competitive rates [2] - The amount of interest earned from a CD is determined by the annual percentage rate (APY), which reflects total earnings after one year, factoring in the base interest rate and compounding frequency [2] Interest Earnings Examples - An investment of $1,000 in a one-year CD at 1.61% APY would yield a total balance of $1,016.22 after one year, including $16.22 in interest [3] - Conversely, a one-year CD at 4% APY would grow the same $1,000 investment to $1,040.74, resulting in $40.74 in interest [3] Deposit Impact on Earnings - Increasing the deposit amount in a CD significantly enhances potential earnings; for example, a $10,000 deposit in a one-year CD at 4% APY would result in a total balance of $10,407.42, yielding $407.42 in interest [4] Types of CDs - Various types of CDs offer different benefits, which may include accepting a slightly lower interest rate for added flexibility [4] - Bump-up CDs allow for a one-time request to increase the interest rate if the bank's rates rise during the term [4] - No-penalty CDs permit early withdrawal without penalties, while Jumbo CDs require higher minimum deposits (typically $100,000 or more) and may offer higher rates [4] - Brokered CDs are purchased through a brokerage and can provide higher rates or flexible terms, but may carry more risk and lack FDIC insurance [4]

Core Insights - The current economic climate has led to shorter-term CDs offering higher interest rates compared to longer-term CDs, which is a reversal of historical trends [2] Group 1: CD Rates Overview - As of December 7, 2025, the highest CD rate available is 4.1% APY, offered by Marcus by Goldman Sachs on a 14-month CD [2] Group 2: Interest Earnings from CDs - The interest earned from a CD is determined by the annual percentage rate (APY), which reflects total earnings after one year, factoring in the base interest rate and compounding frequency [3] - For example, a $1,000 investment in a one-year CD at 1.7% APY would yield a total balance of $1,017.13, while a 4% APY would result in a balance of $1,040.74 [4] Group 3: Deposit Amount Impact - Increasing the deposit amount in a CD significantly boosts potential earnings; a $10,000 deposit in a one-year CD at 4% APY would grow to $10,407.42, resulting in $407.42 in interest [5] Group 4: Types of CDs - Various types of CDs offer different benefits, which may include: - Bump-up CD: Allows for a one-time request to increase the interest rate if bank rates rise during the term [5] - No-penalty CD: Enables early withdrawal without penalties [5] - Jumbo CD: Requires a higher minimum deposit (typically $100,000 or more) and may offer higher rates, though the difference from traditional CDs may be minimal [5] - Brokered CD: Purchased through a brokerage, potentially offering higher rates or flexible terms but carries more risk and may not be FDIC-insured [5]