Top CD Rates Defy Fed’s Rate Hold, Climbing to 4.50% Amid Deposit Competition
Despite the Federal Reserve maintaining its benchmark interest rate unchanged after three cuts in late 2023, the top certificate of deposit (CD) rate has unexpectedly risen from 4.30% to 4.50% this month. Banks and credit unions are aggressively competing for deposits, with standout offers resetting market-leading yields.
Savers face a counterintuitive landscape where CD rates no longer MOVE in lockstep with Fed policy. The divergence creates opportunities for those willing to shop around, particularly as inflation remains elevated. Historical trends show CD yields surged during the Fed's 2022-2023 hiking cycle but have since decoupled following recent cuts.
Financial institutions appear to be prioritizing liquidity over Fed policy signals. This disconnect underscores the importance of active rate comparisons—today's best offers may disappear before the next central bank meeting.
