Financial Plan for Risk-Averse Individuals, Offering Predictable Results
As the economy shows signs of a cooling job market and the Federal Reserve prepares for potential rate cuts, savers are looking for smart ways to secure their savings. Certificates of Deposit (CDs) are proving to be a popular choice, offering high yields and a guaranteed return.
CDs are a lock-your-money-away-and-forget-about-it type of savings vehicle, ideal for those who hate surprises. They provide a fixed Annual Percentage Yield (APY), ensuring that you won't have to worry about what the Fed does once you lock in your rate.
In light of the projected Fed rate cuts, it is optimal to secure short- and medium-term CDs offering rates around 4.4–4.6%. A CD laddering strategy—investing in multiple CDs with staggered maturities—helps balance access to funds and capture higher rates now before potential reductions.
Short-Term CD Rates
ETRADE and Bread Savings offer top short-term rates of 4.45% APY on six-month CDs, with ETRADE requiring no minimum deposit. Northern Bank Direct provided a slightly higher six-month CD rate of 4.50% APY as of early August 2025. Connexus Credit Union has a 7-month CD at 4.60% APY, currently among the highest short-term yields. NASA Federal Credit Union offers a 9-month CD at 4.45% APY, and Bask Bank has a 9-month CD at 4.25% APY.
Long-Term CD Rates
Marcus by Goldman Sachs offers a solid 1-year CD at 4.20% APY, with 3-year and 5-year CDs at 3.90% APY. Jumbo CDs like My eBanc’s 12-month jumbo CD also yield 4.45% APY but often require higher minimum deposits.
It's essential to note that early termination of a CD results in penalties based on the CD maturity, ranging from three to six months of interest for a one-year CD and up to one year of interest for a five-year CD. Therefore, it's crucial to ensure you can live without the money for the CD term.
Overall, to maximize returns before the likely Fed rate cuts, it is optimal to secure short- and medium-term CDs offering rates around 4.4–4.6% and consider laddering to mitigate reinvestment risk from falling rates. CDs provide a guaranteed return and can outpace inflation. Some banks will renew your CD once it reaches its maturity. Set a reminder to shop around for better rates or consider other savings vehicles.
With the CME FedWatch projecting a 92% chance of a quarter-point rate cut when the Fed meets in September, it's an excellent time to sign up for a CD, with rates above 4% for many accounts. Just remember to lock in your rate before the Fed makes its next move.
[1] E*TRADE CD Rates: https://www.etradecds.com/rates [2] Bread Savings CD Rates: https://www.breadcds.com/rates [3] Northern Bank Direct CD Rates: https://www.northernbankdirect.com/cd-rates [4] NASA Federal Credit Union CD Rates: https://www.nasa.org/financialservices/cd-rates [5] Bask Bank CD Rates: https://www.baskbank.com/personal/cds/rates
- Given the projected Fed rate cuts and the current high yields on short-term CDs, investing in Certificates of Deposit (CDs) from E*TRADE, Bread Savings, Northern Bank Direct, Connexus Credit Union, NASA Federal Credit Union, or Bask Bank can be a smart option for those seeking personal-finance security and returns that outpace inflation.
- By locking in short- to medium-term CD rates around 4.4–4.6%, savvy investors can secure their savings before the anticipated Fed rate cuts, and the CD laddering strategy can help balance access to funds and capture higher rates now, while also providing a guaranteed return in the technology-driven financial market.
