With the Fed’s rate cut coming on Thursday, grab this 5.50% CD before it’s gone

The full article continues below these offers from our partners.

Why quickly grabbing one of today’s best CDs is a great idea

Every time US interest rates are high but moving down, certificates of deposit (CD) is one of the smartest places where you can invest part of your savings. It’s because annual percentage yield (APY) that you sign up for, you’ll keep your rate even if interest rates on savings accounts and new CDs fall.

This is exactly the situation American investors find themselves in right now. Triggered by an aggressive rate hike campaign in 2022–2023. Federal ReserveLast fall, rates on certificates of deposit rose to their highest levels in more than 20 years—and they’re still paying historically high rates.

But the days of 5% CDs are likely numbered as the Fed has moved to cut rates now that inflation cooled down The central bank began this new phase with a 0.50 percentage point rate cut on September 18 and is expected to cut rates further at its meeting on Thursday. More than 95% of interest rate traders predict the Fed will announce another quarter-point rate cut.

The highest nationwide APY is 5.50%, but longer guarantees are also reasonable.

The national leader in CDs pays 5.50% APR. This proposal comes from NuVision Credit Union for a period of 8 months. Opening one of these CDs today guarantees you’ll earn 5.50% until early July 2025. Anyone across the country can join Nuvision.

However, there are downsides to Nuvision’s proposal. Due to a special promotion, it can only be opened upon making a deposit. to maximum $5,000 (minimum $1,000). So if you’re looking to put a large amount of money on a CD, this Nuvision offering may not fully meet your needs.

Fortunately, our daily ranking of the best CDs in the country can lead you to nine additional offers with rates of 5.00% or higher. These high-paying certificates range in duration from 3 to 12 months.

While rates in the 5% range are tempting, choosing a longer term CD may be a better move, even though it will come with a lower APY. If you can manage without part of your savings for 18 months or more, you can extend one of today’s stellar rates for much longer. You could win maximum rate 4.65% for 15 months with one option, while the leading two-year CD yields 4.29%. This 24-month rate lock will allow you to earn guaranteed income until almost Thanksgiving 2026.

Longer speed locks are also worth considering. You can secure a maximum rate of 4.00% to 4.10% on certificates that guarantee their rates as long as 2027, 2028or even late 2029.

Don’t Delay: Multiple Fed Rate Cuts Coming

Unfortunately for savers, the Fed is unlikely to stick with its expected quarter-point rate cut this week. More than three-quarters of interest rate traders are forecasting another quarter-point cut at the Fed’s Dec. 18 meeting.

The Fed itself has also signaled that it plans further rate cuts in 2025 and likely 2026, as evidenced by itsscatter plotThe quarterly chart, last published on September 18, anonymously shows what each member of the Fed committee expects will happen to federal funds rate over the next few years. As you can see below, their average forecasts call for a half-percent cut in rates at the final two meetings in 2024, another one-percent cut in 2025, and perhaps another half-percent cut in 2026.

Time will tell what happens to the federal funds rate in December and beyond. But it’s likely that the rates you can guarantee today are a little better than what we’re likely to see in the coming months. So, locking in your desired deposit as soon as possible is still a smart and forward-thinking move to ensure you’ll get attractive returns no matter how many rate cuts the Fed makes.

How we find the best CD discounts and rates

Every business day, Investopedia tracks rate data for more than 200 banks and credit unions that offer certificates of deposit and savings accounts to customers across the country and determines daily rankings of the highest paying accounts. To be included on our lists, an institution must be federally insured (Federal Deposit Insurance Corporation (FDIC) for banks, NKUA for credit unions), and the minimum initial deposit in the account must not exceed $25,000. He also cannot indicate maximum The deposit amount is below 5000 US dollars.

Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to make a donation to a specific charity or association to become a member, unless you meet other eligibility criteria (for example, you don’t live in a certain area or work a certain job), we exclude credit unions. unions with a donation requirement of $40 or more. To find out more about how we choose the best rates, read our full methodology.