Looking for a safe place to grow your cash? Certificates of deposit (CDs) still deliver solid returns when you pick the right rate. In 2025, a few banks and credit unions are offering APYs that beat most savings accounts. This guide shows you what to look for, where to find the best numbers, and how to avoid common traps.
Even with easy‑access savings accounts everywhere, CDs give you two big benefits: a guaranteed interest rate and FDIC (or FSCS) insurance up to $250,000. That means your money is protected and you know exactly how much you’ll earn. With the Federal Reserve keeping rates higher than they were a few years ago, many institutions have lifted their CD offers to stay competitive.
Another plus is the “no‑surprise” factor. Once you lock in a rate, it won’t change for the term you choose – whether that’s three months, six months, one year, or five years. If you’re comfortable keeping funds untouched, a CD can be a set‑and‑forget way to boost your savings.
Start by checking the APY, not just the nominal rate. The APY already includes compounding, so it’s the true earnings figure. Look for offers above 4% for one‑year terms – that’s where the market’s hottest right now.
Next, think about the term length. Short‑term CDs (3‑12 months) give you flexibility if you might need the cash soon. Longer terms (2‑5 years) usually pay more, but they lock you in. If you can roll over the CD at maturity, a longer term can still work without losing liquidity.
Don’t forget early‑withdrawal penalties. Most banks charge a few months’ worth of interest if you break the CD early. Make sure the penalty is worth the extra rate compared to a regular savings account.
Shop around online. Big‑bank CDs are easy to find, but many online‑only banks and credit unions squeeze higher rates because they have lower overhead. Websites that aggregate CD offers can save you time – just filter by APY, term, and minimum deposit.
Finally, check the minimum deposit requirement. Some high‑yield CDs need $5,000 or more, while others start at $500. Pick one that fits your budget without draining your emergency fund.
Quick checklist:
When you line up the numbers, the best CD for you will balance a strong rate with a term you can stick to. Lock it in, set a reminder for the maturity date, and let the interest compound without you having to think about it.
Ready to start? Grab a notebook, jot down a few top offers, and compare them side by side. In a few minutes you’ll know which CD will give you the biggest boost for your money in 2025.
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