The Federal Reserve’s next meeting is scheduled for June 17-18, and most signs point to no change in interest rates — for now. According to the CME FedWatch Tool, futures traders see a 99% chance that the Fed will keep rates unchanged at its next meeting.
That means while CD rates probably won’t drop immediately, they could start slipping soon — especially if the Fed hints that cuts are coming later this year.
Here’s why now may be the time to lock in a top CD rate.
CD rates move with the federal funds rate
CDs tend to follow the Fed’s direction. When the Fed raises or lowers its benchmark rate, banks typically adjust CD rates by a similar amount. If rate cuts are on the horizon, CD yields may fall too, sometimes even before cuts happen.
Right now, short-term CDs (12 months or less) are offering some of the best returns, with APYs as high as 4.60%. These rates are still near the highest we’ve seen in years, but they may not stick around for long — which means now is the time to invest.
Waiting could cost you
Even if the Fed holds rates steady this month, many still expect rate cuts later this year. That gives banks a reason to start trimming CD rates early — and some already have.
Waiting too long could mean missing out on today’s high yields. Unlike high-yield savings accounts, which can change rates at any time, a CD locks in your APY for the full term. That can be a smart hedge if you expect rates to fall.
So if you’re sitting on extra cash and want a safe return, this is your window to act.
Who should open a CD and why?
CDs make the most sense if you have extra cash you won’t need right away and are looking for a safe, guaranteed return. They’re ideal for savers who value stability and don’t need immediate access to their funds.
You might want to open a CD if:
- You’re saving for a short- or medium-term goal. CDs work well for goals within a six-month to five-year window, like a vacation, wedding, or car purchase.
- You want a fixed, guaranteed rate. Unlike savings accounts, CDs lock in your rate, protecting you from future rate drops.
- You’re risk-averse. CDs are FDIC insured up to $250,000 per bank, per depositor. Your money is safe and guaranteed to grow.
- You already have an emergency fund. CDs charge penalties if you withdraw early, so they’re best for money you can leave untouched until the term ends.
If that sounds like you, opening a CD today could be a smart move.
Open a CD now before rates start dropping
The Fed’s June meeting probably won’t bring a rate cut, but it could set the stage for one later this year. And once that shift begins, CD rates are likely to fall in kind.
Want to secure your return? Open a top-paying CD today and lock in your rate before it’s gone.
