The Fed Isn’t Moving Rates—Yet the Top CD Rate Is Higher Than Earlier This Month

The Federal Reserve left its benchmark interest rate unchanged today, marking its first rate hold after cutting it at its final three meetings last year. But despite no movement from the central bank since December, the top certificate of deposit (CD) rate has climbed since earlier this month—a counterintuitive move for savers who expect CD yields to closely track the Fed’s rate.

Why the Top CD Rate Climbed After the Fed’s Last Rate Cut

The nation’s leading CD rates are certainly influenced by the Fed’s benchmark rate and generally move in the same direction. When the Fed aggressively raised rates in 2022 and 2023 to combat inflation, top CD yields surged as well. Then after the central bank began cutting rates in late 2024 and then again last fall, CD returns gradually drifted lower.

That’s what makes the recent move at the top of the CD market stand out. Even after the Fed delivered three rate cuts in the final months of 2025 and has since shifted into wait-and-see mode, the top nationwide CD rate is higher today than it was a few weeks ago. At the start of January, the leading rate sat at 4.30%. Now it’s up to 4.50%.

While that shift may seem surprising, it reflects how banks and credit unions compete for deposits. Smaller institutions, in particular, often look for ways to distinguish themselves, and a standout CD rate can quickly grab attention. Because it only takes one bank to break from the pack to reset the headline rate, these chart-topping offers can appear even when the Fed isn’t moving.

Why CDs Are a Smart Choice in Today’s Rate Environment

One of the main reasons CDs remain appealing right now is the opportunity to lock in yields that are still near their historic highs. Even after last year’s Fed rate cuts, the best CD rates remain above 4%, giving savers a chance to secure a strong, reliable return before rates potentially drift lower.

Locking in a CD today removes both the guesswork about what you’ll earn on that money and the risk that you’ll earn less in the future. That’s because CDs guarantee their APY for the full term, no matter what the Fed does with future interest rates. Waiting, by contrast, could mean settling for a lower APY later.

That perk, of course, comes with a trade-off. Most CDs will impose an early withdrawal penalty if you cash out before the certificate’s maturity date. This means thinking through your personal timeline and choosing a term you’re confident you can stick with.

Whether you decide you’re in the market for a short CD of, say, six months, a mid-range option for a year or two, or even a long-term CD that will guarantee your rate for 3–5 years, shopping around is critical. That’s because the the best nationwide CDs typically pay 3–5 times the national average rate—meaning you can earn between 4.00% and 4.50% with today’s best certificates. And we make the research easy by publishing the leading CD rates every business day.

When a High-Yield Savings Account May Make More Sense

For savers who want or need to keep their cash flexible, a high-yield savings account will likely be a better fit. Unlike CDs, savings accounts allow deposits and withdrawals at any time, making them well suited for emergency funds or money that may be needed on short notice.

Savings account rates aren’t locked in, however, which means their yield can change at any time—and that should be expected if the Fed resumes cutting rates later this year. Still, today’s best high-yield savings accounts continue to offer rates in the 4–5% range, which is 10-12 times the national average rate of 0.39% APY (as of Jan. 20, 2026).

For some savers, the decision doesn’t have to be all or nothing. A hybrid approach—keeping a portion of savings in a high-yield account for easy access, while locking in a CD rate on funds that can be set aside—can help balance flexibility with the opportunity to capture today’s higher yields.