
In the high-interest-rate economic climate of 2022 through most of 2024, savers could seemingly do no wrong.
Simply depositing money into a high-yield savings or certificate of deposit (CD) account led to returns as high as 6% or 7% for some savers. In other words, it was an obvious decision to open one of these accounts, especially for CD account holders who were able to lock in high, fixed rates that remained the same even in the face of market changes.
But the economy is considerably different than it was just a few short years ago. The Federal Reserve has issued four interest rate cuts since September 2024, and two others are looming before the end of 2025. Inflation is down, if still sticky, and rates on CDs and savings accounts are down too, though they're still formidable. With another Fed meeting on the calendar for later in October and another expected 25-basis-point rate cut, the window of opportunity for prospective CD account holders is quickly closing.
However, it hasn't closed yet. With a strategic and rapid approach, savers can still make these accounts work for them now. They'll just need to take action relatively soon. Below, we'll break down three specific CD account moves these savers should make now, before an October Fed rate cut.
Start by seeing how much more interest you could be earning with a high-rate CD here.
3 CD account moves to make before an October Fed rate cut
Around 97%. That's what the CME Group's FedWatch tool lists the likelihood of another rate cut when the Fed meets again on October 29, so time is running out here. Here are three CD account moves to make before that happens:
Shop around for high rates (but make a decision quickly)
It's always important to shop around for high CD account rates, but especially so now, as many lenders get ahead of a predicted rate cut by reducing their rate offers preemptively. So, still shop around for high rates and attractive terms. And look to online banks, which are likely to have more attractive rates than your local bank's branch.
Just don't make a perfect rate your end goal, either. Those rates are long gone. But if you shop around diligently and quickly now, you may be able to find (and lock in) an account with a rate of 4.50% or higher now.
Shop for high-rate CD accounts here.
Compare short-term and long-term CD rates carefully (and calculate returns)
In a reversal of historic trends, rates have generally been higher on short-term CDs than they were on long-term CDs in recent years. But that doesn't automatically mean that a short-term CD is your best or most lucrative choice. In many instances, a long-term CD with a slightly lower rate but an extended interest-earning timeline can more effectively grow your money. Compare both short-term and long-term CD rates carefully and calculate your returns with both precisely before proceeding with either.
Close your traditional savings account
Have you checked the (minimal) interest you're earning on a traditional savings account lately? You'd be forgiven if you missed it, thanks to an average rate of just 0.40%. By keeping money here, you're not only not keeping pace with inflation, you're also losing out on much more lucrative interest-earning opportunities at the same time.
Consider closing this account, then, and moving a portion of your funds into the right CD for your needs. You can move the remaining balance into a high-yield savings account, which has similarly high rates as CDs, without the requirement to keep your funds untouched in the account. With both account types still offering rates over 4% now, then, why keep any money in an account with a rate under 1%?
The bottom line
The window of opportunity to lock in an attractive CD account rate appears to be rapidly closing, with multiple rate cuts expected in the final months of 2025. Prompt action on behalf of savers is required, then, to get ahead of this growing inevitability. By shopping around for high-rate accounts, closely comparing short-term and long-term CD options and avoiding traditional savings accounts (and their low rates), savers can still exploit this timely opportunity. Just be sure, if you're doing so with a CD, that you deposit an amount that you can keep in the account for the full term to avoid paying any early withdrawal penalties.
Edited by Angelica Leicht