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Key Takeaways
- Taking your 2025 RMD early can make sense even if you don’t need the funds, since moving them now means you can lock in one of today’s high rates before future Fed cuts push yields lower.
- The central bank is widely expected to cut rates again on Oct. 29, with a strong chance of another reduction in December.
- The best CDs let you lock in today’s high yields—rates that are unlikely to still be available by year-end. Or for cash you need to keep accessible, consider one of today’s best high-yield savings accounts.
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You Have Until Year-End To Take Your 2025 RMD—But Waiting Could Cost You
If you are subject to required minimum distributions (RMDs) as part of your retirement plan, you must take them by Dec. 31 each year to avoid steep IRS penalties. You can withdraw the required amount—or more—whenever you choose, whether all at once or in smaller payments throughout the year.
For retirees who don’t urgently need their RMD funds but are forced to withdraw anyway, it often makes sense to wait until year-end. That approach maximizes your money’s time in the market and allows a bit more time for tax-deferred growth.
If you don’t need your RMD cash right away, the next question is where to put it once it’s withdrawn so it can still earn a strong return. That’s where the timing of Federal Reserve rate cuts comes in—because if rates fall again, the opportunities available today could look very different by December.
Why This Matters for You
If you don’t need your RMD soon, taking it early lets you move that cash into a CD with one of today’s high rates locked in. Waiting until year-end to withdraw could mean earning a lower yield, since the Fed is expected to make one or two rate cuts this year.
Why Stashing RMD Cash in a CD Is Smart Right Now
A guaranteed return is appealing when interest rates are shifting—and that’s exactly what a certificate of deposit (CD) offers. Once you lock in a CD rate, it won’t change—no matter how soon or how much the Fed lowers its benchmark rate.
That rate lock becomes especially valuable when cuts are on the horizon. According to the CME FedWatch Tool at the time of this writing, there’s a 93% probability the Fed will trim its benchmark rate by a quarter point on Oct. 29, and a 78% chance of another cut in December. When banks and credit unions feel confident that that lower rates are coming, they sometimes move first—reducing the yields they offer on new CDs even before the Fed makes its announcement.
The takeaway: Today’s best CD rates are unlikely to last through the fall, let alone year-end. If you want to make the most of this window, look for short- to mid-term CDs that align with when you’ll actually need your RMD funds. They can help you secure a rate that’s likely to look generous once the Fed’s next moves take effect.
Just remember that locking in a CD’s rate means committing your money for the full term. Cashing out early can trigger an early withdrawal penalty that varies widely by institution—from a small interest charge to a much steeper hit. So, choose your term carefully, and check each bank’s penalty rules before you commit.
Top Spots for RMD Cash You Want to Keep Accessible—While Earning Up to 5%
If you don’t want to lock all of your RMD money into a CD, you still have ways to earn a solid return. Top-paying high-yield savings accounts are offering mid-4% returns, with some reaching 5.00%, and they let you withdraw funds whenever you need them.
To help you find the most competitive options, check out our daily ranking of the best high-yield savings accounts, which currently features 15 options paying 4.30% or higher.
A top-paying money market account could also make sense. Although their yields typically trail the top savings accounts—the current top rate is 4.40% APY—they give you the option to write paper checks from your savings.
Just remember that savings and money market account rates are variable, meaning they’ll drift lower when the Fed cuts its benchmark rate.
Daily Rankings of the Best CDs and Savings Accounts
We update these rankings every business day to give you the best deposit rates available:
Important
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that’s below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
