CD Rates Today, January 12, 2025 (up to 4.25% API)

Today’s certificate of deposit (CD) interest rates are some of the highest we’ve seen in more than a decade thanks to several rate hikes by the Federal Reserve. However, the federation finally dropped the cap in September, so now may be your last chance to lock in a tournament status.

CD rates vary widely among financial institutions, so it’s important to make sure you’re getting the best amount possible when buying a CD. The following is a list of today’s CD rates and where to find the best deals.

Historically, long-term CDs have offered higher interest rates than short-term CDs. Generally, this is because banks pay better to encourage savers to keep their money on deposit for longer. However, in today’s economic climate, the opposite is true.

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As of January 12, 2025, CD rates will remain at historically high levels. But the highest CD prices can be found for short periods of a year or less.

Today, the highest CD rate is 4.25% API, offered by Marcus on the 1-year CD at Goldman Sachs. A minimum deposit of $500 is required.

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The amount of interest you can earn from a CD depends on the annual percentage rate (APY). This is a measure of your total income after one year, taking into account the base interest rate and how often the interest compounds (the CD interest compounds daily or monthly).

Say you invest $1,000 in a one-year CD with a 1.81% APR and interest compounds monthly. At the end of that year, your balance will grow to $1,018.25 – your original $1,000 deposit plus $18.25 in interest.

Now suppose you choose a one-year CD that offers 4% APR instead. In this case, your balance would increase to $1,040.74 at the same time, adding $40.74 in interest.

The more you put into a CD, the more you stand to earn. If we take our same example of a one-year CD with a 4% API but deposit $10,000, your total balance when the CD matures will be $10,407.42, which means you’ll earn $407.42 in interest. .

Read more: What is a good CD rate?

Interest rate is often top of mind when choosing a CD. However, size isn’t the only thing you need to consider. There are several types of CDs that offer different benefits, although you may have to accept a slightly lower interest rate for more flexibility. In addition to traditional CDs, here are some of the more common types of CDs you may want to consider.

• Compact CD: This type of CD allows you to claim the interest rate if the bank rate increases during the term of the account. However, you are only allowed to “raise” your rate once.

• CD without penalty: Also known as a liquid CD, a CD type gives you the option to withdraw your funds before maturity without paying a penalty.

• Jumbo CD: These CDs require a high minimum deposit (usually $100,000 or more) and often offer high interest rates in return. In today’s CD rate environment, however, the difference between a traditional and jumbo CD may not be much.

• Broker CD: As the name suggests, these CDs are bought through a broker, not directly from a bank. Brokered CDs can sometimes offer higher rates or more flexible terms, but they carry more risk and may not be FDIC insured.