Interest Rates on CDs Rise as Fed Holds Steady

New York, NY — On May 28, 2025, Bankrate released updated average annual percentage yields (APYs) for certificate of deposits (CDs), revealing rising interest rates following recent Federal Reserve actions. The changes reflect a shift in the financial landscape as rates have fluctuated significantly since early 2022.

According to Bankrate’s latest survey, the national average for one-year CDs reached 1.99% and for five-year CDs it is 1.71%. This marks an increase from earlier this year, driven in part by rising Treasury yields and expectations surrounding Fed rate adjustments.

The Federal Reserve has kept the target federal funds rate unchanged at a range of 4.25% to 4.5% since early 2025, following a reduction in late 2024. These developments have created a more favorable environment for consumers looking to invest in CDs.

Prior to 2025, high-yield CD rates saw considerable growth as the Fed aimed to combat inflation by maintaining rates at historic highs. In February, the average rate for one-year CDs surpassed the five-year average, signaling a change in consumer investment behavior.

Bankrate gathers data from over 1,200 banks and credit unions weekly, ensuring comprehensive coverage of competitive yields in the market. The data helps consumers compare rates effectively.

The latest figures show the following annual percentage yields for CDs:

1-year CD: 1.99%
3-year CD: 1.69%
5-year CD: 1.71%

These trends highlight the evolving economic conditions impacting consumer savings and investment options.