CD Rates Today: August 8, 2025 – Earn Up to 4.94%

Understanding the Best CD Rates Today

Certificates of deposit (CDs) have become a popular choice for individuals looking to grow their savings with a relatively safe investment. As of today, the highest CD rate available is 4.94% for a jumbo 6-month CD. This rate is significantly higher than what was available just a few years ago, making it an attractive option for savers.

One of the main advantages of CDs is that they offer better returns compared to traditional savings accounts. However, they come with a trade-off: your money is locked in for a set period, and early withdrawal can result in penalties. The longer the term, the harsher the penalty, which can sometimes mean losing up to a full year's worth of interest if you break a five-year CD prematurely.

Highest CD Rates by Term

When considering different CD terms, it's essential to understand the rates available for each. Here’s a breakdown of the current rates:

• 3-Month CD: The average rate is 1.3%, but the best rate currently stands at 4.62%.
• 6-Month CD: The highest rate today is 4.94%, with an average APR of 1.77%.
• 1-Year CD: The top rate is 4.84%, with an average APY of 1.84%.
• 2-Year CD: The best rate is 4.52%, matching the rate from last week.
• 3-Year CD: The highest rate is 4.26%, with an average APY of 1.56%.
• 5-Year CD: The best rate is 4.26%, with an average APY of 1.58%.

For those interested in jumbo CDs, the highest rate for a 6-month jumbo CD is also 4.94%. These CDs typically require a minimum deposit of $100,000 or more, though some institutions may have lower thresholds.

Exploring Other CD Options

Beyond the standard terms, there are several other CD options to consider:

• 4-Year CD: Offers competitive rates for those willing to lock in funds for a longer period.
• 10-Year CD: Provides even higher rates, though with a longer commitment.
• 18-Month CD: A mid-term option that balances accessibility and return.
• Jumbo CD: Ideal for larger deposits, often with higher yields.
• IRA CD: Allows for tax-deferred growth within an individual retirement account.
• No-Penalty CD: Offers flexibility without the risk of early withdrawal fees.

How Do CDs Work?

Opening a CD requires a lump-sum deposit, which serves as an investment. Most CDs have minimum deposit requirements, ranging from a few hundred to several thousand dollars. Once the account is open, your principal earns a fixed interest rate for the entire term. Banks and credit unions typically provide statements showing how much interest has been earned.

It's important to avoid withdrawing funds before the CD matures, as this can result in early withdrawal penalties. In rare cases, you might lose a portion of your principal as well.

Are CD Rates Worth It?

CDs generally offer higher interest rates than high-yield savings accounts and money market accounts. While they may not match the potential returns of stocks or real estate, they are considered one of the safest places to invest. Federal Deposit Insurance Corporation (FDIC) coverage ensures that up to $250,000 is protected in case the bank fails.

Online banks often offer more competitive rates because they have lower operating costs compared to traditional brick-and-mortar banks. This allows them to provide higher annual percentage yields (APYs) on CDs.

Building a CD Ladder

A CD ladder is a strategy that involves investing in multiple CDs with different maturity dates. For example, you might purchase a one-year, two-year, three-year, four-year, and five-year CD. As each shorter-term CD matures, you can reinvest the funds into a new long-term CD. This approach provides regular access to cash while still benefiting from higher interest rates.

Frequently Asked Questions

How do you build a CD ladder?
By purchasing CDs with varying term lengths, ensuring that one CD matures each year. This allows for consistent access to funds while maintaining higher yields.

Do CDs cost anything?
Most CDs come with zero fees, but early withdrawal penalties may apply if you close the account before maturity.

Conclusion

With current CD rates reaching as high as 4.94%, now is an excellent time to explore these investment options. Whether you're looking for short-term or long-term growth, CDs offer a secure way to earn interest on your savings. By comparing rates from various institutions and understanding the terms, you can make informed decisions that align with your financial goals.