​​Prediction: CD Rates Are About to Fall

Interest rates have been high for the last couple of years, which has been great for savers. Many Americans have locked in CD rates of 4% or 5%. Those are the highest saving rates in the past couple of decades. But they won't last forever. In fact, they are already starting to fall slightly.

The Federal Reserve pushed up rates in an attempt to slow the economy and get inflation back under control. Now, with unemployment rising and inflation cooling, many experts believe a change is imminent. Here's what that means for your CDs and savings -- plus some moves you can make to ensure your money keeps working for you.

Why CD rates are about to fall

Many rates that impact our lives, such as CDs, savings accounts, loans, credit cards, and mortgages, are influenced by something called the federal funds rate. When the Federal Reserve cuts this rate, CD rates will fall. Indeed, some banks are already reducing rates in anticipation of the Fed's decision.

If you visualize the economy as a car moving down a hill, rates are essentially the Federal Reserve's brakes. When the car is moving too fast, it increases rates to slow things down. As we start to slow, it eases its foot on the rate brakes to allow the economy to roll again. Federal Reserve Chair Jerome Powell seems to be readying to take his foot off the brake a little.

Our Picks for the Best High-Yield Savings Accounts of 2025

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.70% Rate info 3.70% annual percentage yield as of March 6, 2025. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.70% Rate info 3.70% annual percentage yield as of March 6, 2025. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
SoFi Checking and Savings Member FDIC. APY up to 3.80%² Rate info You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet. Min. to earn $0 Open Account for SoFi Checking and Savings On SoFi's Secure Website. Member FDIC.	up to 3.80%² Rate info You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.	$0	Open Account for SoFi Checking and Savings On SoFi's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.70% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Feb. 6, 2025. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.70% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Feb. 6, 2025. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.

Disclaimers

SoFi disclosure:

¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/26. See full bonus and annual percentage yield (APY) terms at sofi.com/banking#1.

² SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. See the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

³ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.

⁴ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional

FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at SoFi.com/banking/fdic/terms

See list of participating banks at SoFi.com/banking/fdic/receivingbanks

⁵ We’ve partnered with Allpoint to provide you with ATM access at any of the 55,000+ ATMs within the Allpoint network. You will not be charged a fee when using an in-network ATM, however, third-party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.

⁶ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

⁷ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the“30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage.

Speaking after the Fed's July meeting, Powell said a rate cut could be imminent, assuming various conditions continue. Those include inflation trending downward and the job market steadying. Per the Bureau of Labor Statistics, July unemployment hit 4.3%, its highest in three years. "I would think that a rate cut could be on the table at the September meeting," said Powell.

The Fed will meet on Sept. 18 and has two other meetings planned before the end of this year. Some experts predict it will cut rates at all three meetings, but that remains to be seen. It seems almost certain that rates will fall -- the question is by how much and how quickly.

Three moves to make before rates fall

It's one thing knowing that rates will fall, and quite another playing it to your advantage financially. Think about how lower rates might impact your finances, particularly any savings or debts. The trick is to lock in high savings rates now and ready your credit score to potentially borrow at more favorable rates.

1. Lock in a high CD rate if you still want to

The best -- and worst -- thing about most CDs is that you lock your cash away for a fixed amount of time. If you might need that money urgently, opening an accessible high-yield savings account may make more sense. If we're talking about money you won't need for a couple of decades, you will likely get a higher rate of return by investing it in the stock market.

If you have cash that you don't need immediately and don't want to tie up for the long term, shop around for the best CD rate today. Let's say you put $2,000 into a 2-year CD paying an APY of 4.80%. That rate won't change, and you'd earn a return of almost $200.

Once the Fed starts to cut rates, those high APYs will not be on the table. Take advantage of them while you can.

2. Watch mortgage rates

If you've been delaying buying a house because of high mortgage rates, the coming months could bring good news. It is hard to predict how much mortgage rates may fall, but they may finally be moving in your favor. That said, lower rates aren't going to be a magic affordability bullet. Rate changes could trigger an increase in buyer demand, which could push home prices up.

There's no right or wrong move here. If you've found a place you can afford, you might want to buy and look to refinance further down the road. If current rates have priced you out, use the extra time to build a down payment, improve your credit score, and position yourself to move when rates shift.

3. Pay down credit card debt

It is great to earn interest of 4% or 5% on your savings balance, but paying rates of around 25% on a credit card balance can be devastating. Worryingly, data from the Federal Reserve Bank of New York shows delinquencies are on the rise.

If you carry a balance on your credit card, don't wait for rates to fall to start paying it down. A high balance can translate into a high credit utilization rate, which hurts your credit score. Any missed payments will ding your score further. Your credit score will be important if you want to access competitive loans once rates fall.

Plan for lower CD rates

Barring a dramatic economic change, it seems certain that the Fed will cut rates in September. If you haven't yet made the most of today's high CD rates, time is running out. More widely, think about how lower rates will impact your finances and what moves you can make to prepare.