CD rates today, January 4, 2025 (best account pays 4.25% APY)

today's certificate of deposit (CD) interest rates are some of the highest we've seen in more than a decade, thanks to several rate hikes by the Federal Reserve. However, the Fed finally lowered its target rate this month, so now may be your last chance to secure a competitive rate.

CD rates vary widely among financial institutions, so it's important to make sure you're getting the best possible rate when shopping for a CD. The following is a breakdown of today's CD rates and where to find the best deals.

Historically, long-term CDs have offered higher interest rates than shorter-term CDs. Generally, this is because banks would pay better rates to encourage savers to keep their money on deposit for longer. However, in today's economic climate, the opposite is true.

Check out our picks for the best CD accounts available today>>

Today, the highest CD rate available from our verified partners is 4.25% APY offered by Marcus Goldman Sachs for 1 year. A minimum deposit of $500 is required.

Here's a look at some of the best CD rates available today:

The amount of interest you can earn from a CD depends on annual percentage rate (APY). This is a measure of your total earnings after one year, taking into account the base interest rate and how often the interest rates are compounded (CD interest is usually compounded daily or monthly).

Let's say you invest $1,000 in a one-year CD with 1.81% APY and interest monthly. At the end of that year, your balance would have increased to $1,018.25 – your initial deposit of $1,000 plus $18.25 in interest.

Now let's say you choose a one-year CD that offers 4% APY instead. In this case, your balance over the same period would grow to $1,040.74, which includes $40.74 in interest.

The more you put into a CD, the more you can earn. If we took our same example of a 1-year CD at 4% APY, but deposited $10,000, your total balance would be $10,407.42 when the CD matured, meaning you would earn $407.42 in interest. …

Read more: What is a good CD speed?

Interest rate is usually the most important factor when choosing a CD. But rate isn't the only factor you should consider. There are several types of CDs that offer different benefits, although you may have to accept a slightly lower interest rate in exchange for more flexibility. Here's a look at some common types of CDs to consider beyond traditional CDs:

• Bump-up CD: This type of CD allows you to request a higher interest rate if your bank's rates increase during the life of the account. However, you are usually only allowed to “up” your rate once.

• CD without penalties: Also known as a liquid CD, this type of CD gives you the ability to withdraw your funds before maturity without paying a penalty.

• Jumbo CD: These CDs require a higher minimum deposit (usually $100,000 or more) and often offer a higher interest rate in return. However, in today's CD rate environment, the difference between traditional and jumbo CD rates may not be large.

• Mediated CD: As the name suggests, these CDs are purchased through a brokerage firm rather than directly from a bank. Brokered CDs can sometimes offer higher rates or more flexible terms, but they also carry more risk and may not be FDIC insured.