3 CD accounts still worth opening for 2025
While hopes were high that the interest rate climate was on a permanent decline late last year, the reality has been a bit different. The Federal Reserve issued three interest rate cuts in the final four months of 2024, bringing the federal funds rate down one full percentage point to a range between 4.25% to 4.50%. But inflation ticked up during that time, slowing the likelihood of additional interest rate cuts to come in 2025. Right now, according to the CME Group's FedWatch tool, there's almost a 90% chance that the Fed will keep its benchmark interest rate the same when it meets again at the end of January.
Although this is discouraging news for borrowers looking for inexpensive ways to obtain new funds, it has extended the benefits of high-interest-earning accounts like certificates of deposit (CDs) and high-yield savings accounts. The former type, in particular, can still be advantageous thanks to a fixed interest rate that won't change even if the rate climate does. But savers will need to be aggressive in finding — and locking — these rates before they adjust again. Considering this dynamic, then, it helps to know which CD accounts can still be worth opening for 2025. Below, we'll break down three of them.
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3 CD accounts still worth opening for 2025
Not sure which CD account is worth opening now? Here are three to look into with rates still high:
1-year CD at 4.52%
A 1-year CD comes with an interest rate higher than many other CD terms with the understanding that you can withdraw your funds penalty-free much earlier. A $10,000 deposit into a 1-year CD at this rate would result in $452 earned upon account maturity. And it would allow you to weather the unknown economic landscape of 2025 before deciding on any long-term plans for those funds. Plus, if you use an online bank you may be able to secure an even higher rate. So start shopping around online now. It's unlikely that today's CD rates will look the same next January.
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18-month CD at 4.30%
Rates on 18-month CDs aren't quite as high as 1-year CDs, but that can be a sacrifice worth making. Using that $10,000 deposit as an example, you'll earn $651.88 upon account maturity (around $200 more than the 1-year CD). But you'll also extend your financial protection for an additional six months, which can be vital with so many economic uncertainties still considerable now. That said, another six months can be the difference between maintaining your funds and withdrawing them early and having to pay an early withdrawal penalty. So make sure that any funds you deposit into this longer account can be maintained with ease before getting started.
2-year CD at 4.25%
If you're looking to earn as much money as possible and want to protect your money for an extended period then a 2-year CD (or longer) can still be worth opening for 2025. With that $10,000 deposit, you'd earn just under $870 in interest, making it the clear most profitable option on this list. And you'd protect your money for a full two years, at which point you'd better be able to evaluate where to transfer it upon maturity. Still, two years is a significant commitment that should only be explored by serious savers. But if you can manage to leave your money alone for the full 24 months, you will be rewarded with a significant amount of earned interest.
The bottom line
While these three accounts have appealing features for a wide variety of savers, they may not be exactly right for you. But that doesn't mean a CD still can't be a vital part of your finances in the new year, it may just take a bit of time and research to find your optimal account. Just don't wait too long to get started, either. It was just a few years ago that CD interest rates were averaging under 1%, so it makes sense to lock in a high rate now, regardless of the term you ultimately decide on.
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