Interest Rates on CDs in August 2025: APYs Tend to Remain Unchanged
In the first half of 2025, CD rates at numerous online banks and credit unions experienced a slowdown in their descent, providing a glimmer of hope for savers seeking higher returns.
Short-term CDs Dip Slightly, Longer-term CDs Stay Steady
During this period, longer-term CDs remained more stable, while short-term CDs dipped slightly. Notable exceptions include Discover®, which offers a limited-time 6-month CD with an Annual Percentage Yield (APY) of 4.20%, and a 1-year CD with an APY of 4.00%.
Best High-Yield CD Rates Exceed National Averages
As of early August 2025, the highest current high-yield CD rates range from about 4.10% to 4.50% APY across various term lengths. The very best rates are usually around 4.45% to 4.50% APY, such as the top rate of 4.50% APY offered on six- and nine-month CDs by Northern Bank Direct.
In comparison, national average CD rates are significantly lower. For instance, short-term CDs (3 to 6 months) have an approximate APY of half the best rates, around 2.2%. Longer-term CDs (1 to 5 years) still offer competitive rates, but these are significantly above national averages, which hover around 2.0% APY.
The Impact of Federal Reserve Rate Cuts
The Federal Reserve cut rates three times in 2024, leading to a decline from previous record CD highs. However, the Fed has held rates steady in 2025 so far, keeping CD yields relatively stable. There is anticipation of possible future rate cuts, which could impact CD rates later in the year.
Online Banks Lead the Market with Highest Yields
Large national banks typically offer lower CD rates compared to online banks and smaller institutions, which are currently leading the market with the highest yields. Online-only banks and credit unions, such as Discover® and Wealthfront, are offering some of the most competitive interest rates on certificates of deposit.
A Comparison of High-Yield CD Rates and National Averages
| Term Length | Best High-Yield CD APY | National Average CD APY (approx.) | Notes | |-------------------|-------------------------------|----------------------------------|-------------------------------| | 3 to 6 months | Around 4.45% to 4.50% | About half of best rates (~2.2%) | Short-term best rates highest | | 6 to 9 months | Up to 4.50% | About 2.1-2.3% | Best rates roughly double avg | | 1 year | About 4.10% to 4.30% | Around 2.0% | Slightly lower than shortest | | 2 to 5 years | Around 4.10% to 4.30% | About 2.0% | Competitive for locking rates |
Promotional Rates and Market Trends
The current promotional rate for Betterment Cash Reserve is 4.50%, with a variable APY of 4.00% as of 12/27/24, plus a .50% boost available with qualifying deposit. The trend of shorter-term CD rates being higher than longer-term CD rates continues into 2025. High-yield CD rates today can be several times the national average of 1.33% APY for five-year terms and the national average of 1.63% APY for one-year terms.
Non-CD Options and Median APYs
Some financial institutions, such as Chime®, Varo Bank, and ETRADE, do not offer CDs but provide alternative savings options. For example, Chime® offers a Checking Account, Varo Bank offers a Bank Account, and ETRADE offers a Max-Rate Checking Account with an APY of 3.00%. The median APYs for various CD terms have decreased since September 2024, with the median APY for a 3-year CD at 3.50% in July 2025, down from 3.90%. Similarly, the median APYs for 6-month, 1-year, and 5-year CDs have also decreased.
A Wider Pool of High Rates
For those seeking a wider pool of high rates, there is a list of best high-interest accounts available. Online-only banks and credit unions continue to dominate the high-yield CD market, offering attractive rates for savers looking to maximise their returns.
- The slowdown in the descent of CD rates at numerous online banks and credit unions in the first half of 2025 provided a glimmer of hope for savers personally seeking higher returns on their savings.
- Personal financial analysis indicates that the highest current high-yield CD rates, which range from about 4.10% to 4.50% APY across various term lengths, exceed national average CD rates significantly.
- With the best rates being around 4.45% to 4.50% APY, investing in high-yield CDs could potentially offer more profit than traditional banking options with lower CD rates.
- The Federal Reserve's decision to hold rates steady in 2025, following three rate cuts in 2024, has kept CD yields relatively stable, but there is anticipation of possible future rate cuts that could impact investing and personal finance.
- Online banks and smaller institutions, such as Discover® and Wealthfront, are currently leading the market with the highest yields on certificates of deposit, offering more attractive interest rates compared to large national banks.
- Utilizing a personal finance app can help analyze the best high-yield CD rates and compare them to national averages, aiding in making informed decisions for investing and saving.
- For individuals seeking a wider pool of high rates, exploring the list of best high-interest accounts, particularly from online-only banks and credit unions, could provide the opportunity to maximize their returns and grow their wealth.
