Despite a general downward trend in deposit account rates, Certificates of Deposit (CDs) continue to offer attractive returns, with some reaching up to a 4% Annual Percentage Yield (APY). This allows individuals to secure a favorable return on their investments and maintain their earning potential. The current landscape for CDs presents opportunities for those looking to stabilize their financial growth, especially when compared to traditional savings accounts.
Historically, CD rates have fluctuated significantly in response to economic conditions and Federal Reserve policies. The early 2000s, characterized by the dot-com bust and the 2008 financial crisis, saw a notable drop in CD rates as the Federal Reserve lowered its target rate to stimulate economic growth. By 2009, following the financial crisis, the average one-year CD yielded approximately 1% APY, while five-year CDs offered less than 2% APY, reflecting a period of extremely low returns for savers.
This trend persisted into the 2010s, particularly after the Great Recession. The Federal Reserve's strategies, including maintaining near-zero benchmark interest rates, compelled banks to offer minimal interest on CDs. By 2013, average rates for six-month CDs had plummeted to about 0.1% APY, and five-year CDs averaged 0.8% APY, underscoring a challenging period for those seeking to grow their savings through CDs.
A shift occurred between 2015 and 2018 as the Federal Reserve began to gradually raise interest rates. This period saw a modest improvement in CD rates, signaling an end to nearly a decade of ultra-low returns. However, the emergence of the COVID-19 pandemic in early 2020 led to emergency rate cuts by the Fed, pushing CD rates back to unprecedented lows, thereby once again limiting the earning potential for depositors.
The post-pandemic era brought about a reversal of this trend. As inflation surged, the Federal Reserve responded with a series of 11 rate hikes between March 2022 and July 2023. This aggressive monetary policy led to increased rates on various financial products, including CDs, offering savers significantly higher APYs. Even though the Federal Reserve started to cut the federal funds rate in September 2024, with three cuts occurring in 2025, CD rates, while moderating, remain strong by historical benchmarks.
Currently, the most attractive short-term CDs, typically with terms of six to twelve months, are yielding around 4% APY. As of February 10, 2026, the highest available CD rate is 4% APY, offered by prominent institutions like Marcus by Goldman Sachs for its one-year CD and Sallie Mae for its eleven-month CD. These rates provide a compelling option for investors looking to capitalize on favorable market conditions.
When selecting a CD, it's crucial to consider several factors beyond just the interest rate. Your personal financial goals and the timeframe for which you can commit your funds are paramount, as early withdrawals can incur penalties. Evaluating different financial institutions, including online banks and credit unions, is also important, as their rates can vary significantly due to operational cost differences. Online banks, for example, often provide higher rates due to lower overhead. Additionally, ensuring that your chosen institution is FDIC-insured (or NCUA-insured for credit unions) is vital for protecting your deposit. Understanding the specific account terms, such as maturity dates and any potential withdrawal penalties, along with minimum deposit requirements, will help ensure the CD aligns with your financial strategy. Lastly, it is wise to consider the impact of inflation, especially for longer-term CDs, as it can erode the real value of your returns.