CD Interest Rates Under Review: An Overview of the Current Situation

Given the current declining interest rates for deposit accounts, there is still a silver lining: Certificates of Deposit (CDs) continue to offer the potential for attractive yields. Particularly noteworthy are the current top rates for CDs, which now exceed 4%. Especially in the realm of short-term CDs (six to twelve months), interest rates between 4% and 4.5% APY are not uncommon. For September 23, 2025, the highest interest rate of 4.45% APY is offered by LendingClub for an 8-month CD, promising significantly higher returns compared to traditional savings accounts. A look back at the historical interest rates for CDs shows that despite relatively high returns, the early 2000s were marked by a decline, particularly after the financial crisis of 2008. Average interest rates for CDs were at times at a low point, especially following the Great Recession from 2007 to 2009. Between 2015 and 2018, there was a slight recovery in CD rates before the low interest rates during the COVID-19 pandemic and subsequent Fed rate cuts led to another downturn. However, the inflationary spiral that set in after the pandemic led to a significant increase in interest rates, including 11 hikes between March 2022 and July 2023. But with the Fed's decision to cut rates starting in September 2024, declines in CD rates are already noticeable, although they remain high by historical standards. Traditionally, longer-term CDs offer higher interest rates, which is not consistently the case currently. The highest average interest rate is presently for a 12-month term, indicating a flat or inverted yield curve, as can occur during uncertain economic times or expectations of declining rates. When selecting a CD, it is not only high APYs that are crucial, but also other factors that can influence the overall return.