Will CD interest rates rise in March? Here's what some experts think

Stubbornly high inflation has forced the Federal Reserve to keep interest rates elevated at its last few meetings. While that's held back consumers looking to buy a house or finance a new car, for those opening certificate of deposit accounts it's been a savings boon.

That could change, though. The Fed has indicated several rate cuts could be in store for 2024, the timing of which are up in the air. Could they start at the central bank's upcoming March meeting? Below, we'll break down what some experts think — and how that could impact CD interest rates. 

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Will CD interest rates rise in March? 

We spoke to a few experts to get their predictions for CD interest rates in March and beyond. Here's what they think:

CD rates will hold steady for now

Most financial pros expect CD rates to hold steady — at least during the March meeting (and potentially in the few months following it).

"The Fed Funds rate is not expected to change near term, and inflation readings should continue to improve over time," says Ryan Johnson, a certified financial planner and managing director at Buckingham Advisors in Dayton, Ohio. "For the next couple of months, interest rates should stay in the range that has already been seen this year."

Things could change by the Fed's May 1 meeting, though, but Buckingham says the "current odds of a cut are low." Data from the CME Group's FedWatch Tool, which predicts future Fed moves, supports that reasoning. The tool currently projects only a 2.5% chance of a rate cut in March and a 21% shot at one in May. 

Start earning interest with one of today's top CDs before that happens.

CD rates will drop modestly in the summer — and beyond

If inflation continues to fall, the Fed will likely reduce its benchmark rate, which will see CD rates and other interest rates fall as well. 

Experts generally expect this to start happening in the summer. "I see the Fed stabilizing rates for the next meeting, followed by a modest decrease of rates in the following meetings in the year," says Cliff Ambrose, founder of Apex Wealth in Danvers, Massachusetts.

This would likely mean a fairly gradual decline in CD rates at the start, and a larger decline once the Fed cuts rates several times — likely by the end of 2024. 

"For CD rates to drop significantly, a continued decrease in inflation expectations, a shift towards accommodative monetary policy by central banks, or a significant decline in demand for CDs due to alternative investment opportunities would have to take place," Ambrose says. "We see a high probability of this taking place within the next year or so based upon the economic indicators and inflation data."

According to FedWatch, the Fed will likely drop its target rate from the 5.25% to 5.50% range it's at today to 5.00% to 5.25% in June. By the end of the year, expectations are for rates to sit between 4.25% and 4.75%. 

How to plan your CD strategy 

If you're looking to perfectly time opening a new CD, investment advisor Stuart D. Boxenbaum says, "it's a bit of a guessing game." Still, thanks to their guaranteed rates of return, any CD is better than no CD — especially when compared to other financial products. 

With stocks, you run the risk of losing money, and with high-yield savings accounts, you'll get a variable interest rate, so your rate would fall as the Fed makes its moves. With CDs, you'll get your initial rate no matter what, as long as you keep the funds untouched until maturity. 

"When it comes to CDs, there's no risk," says Boxenbaum, who's president of Statewide Financial Group in Jupiter, Florida. "You get the full value of the CD back when it matures."

Johnson says to think strategically about what CD terms you choose, though, and keep those future rate drops in mind. 

"Consider locking in longer-term rates now, even though the shortest-term rates may be the highest," Johnson says. "If the Fed starts cutting rates as expected, rates may not be as attractive when today's short-term CDs mature and need to be reinvested."