Deposit account rates are indeed on the decline, but there is a silver lining for savers looking to secure a competitive return on their money. By investing in a certificate of deposit (CD) today, you can lock in a rate that is still above 4%, preserving your earning power in the midst of fluctuating interest rates.
Currently, CDs offer rates that are significantly higher than traditional savings accounts. The best short-term CDs, ranging from six to 12 months, generally provide rates around 4% APY. As of February 10, 2026, the highest CD rate available is 4% APY, offered by Marcus by Goldman Sachs on its 1-year CD and Sallie Mae on its 11-month CD.
Looking at historical trends, the 2000s saw fluctuating CD rates, with a peak before the dot-com bubble and a subsequent decline following the global financial crisis of 2008. By 2009, average one-year CD rates were around 1% APY, with five-year CDs at less than 2% APY.
The trend of falling CD rates continued into the 2010s, especially after the Great Recession, as the Federal Reserve’s policies aimed at stimulating the economy resulted in very low CD rates. However, between 2015 and 2018, as the economy expanded and the Fed gradually increased rates, there was a slight improvement in CD rates.
The onset of the COVID-19 pandemic in early 2020 led to emergency rate cuts by the Fed, causing CD rates to plummet to new record lows. However, as inflation began to rise uncontrollably, the Fed hiked rates 11 times between March 2022 and July 2023, leading to higher rates on savings products like CDs.
Following the pandemic, the Fed began cutting the federal funds rate in September 2024 after determining that inflation was under control. This resulted in CD rates gradually decreasing from their peak, though they still remain relatively high by historical standards.
When choosing a CD, it’s important to consider factors beyond just the APY. Factors like your financial goals, the type of financial institution offering the CD, account terms, and inflation should all be taken into account. Researching and comparing CD rates from different institutions, understanding the terms of the CD, and considering the impact of inflation on your returns are all crucial steps in maximizing your savings potential.
Overall, despite the fluctuations in CD rates over the years, investing in a CD today can still provide a competitive return and help you preserve your earning power in a changing economic landscape.
