Many savers have benefitted from high rates in recent years. But if you're hoping 2025 might send certificate of deposit (CD) rates even higher, you may well be disappointed. The economic tides are shifting, and rates have started to fall in recent months.

Indeed, it's extremely likely that savings rates will fall further in 2025. It isn't too late to lock in some excellent CD rates before that happens -- click here to learn more about what's available.

Let's have a look at what factors might impact rates and how you can continue to get competitive returns.

How the Fed influences CD rates

The Federal Reserve has a significant impact on savings and CD rates through the federal funds rate. Banks use it as a benchmark for the savings and lending rates they offer to consumers.

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Think of the economy as a car rolling downhill. Rates are essentially the Fed's braking mechanism. When the economic car is moving too fast and, for example, inflation is high, the Fed raises interest rates to slow things down. That's what happened in 2022 and 2023.

More recently, it's started to ease its foot on the brakes to allow our economic car to gain more momentum. The Fed has cut rates by 0.75% in the past few months. That's expected to continue next year. According to the CME's FedWatch tool, there's a strong possibility that rates will fall by another 0.75% to 1%.

What to expect from CD rates in 2025

The Fed isn't the only influence on CD rates, but it is a significant factor. Assuming banks follow any Fed cuts, top rates on a 1-year CD, for example, might drop from around 4% to 3.25% to 3% next year.

However, it won't happen quickly. And the Fed could change course. There's still a lot of uncertainty, particularly because the economic shock of the pandemic upended a lot of the economic indicators people normally rely on.

Here are two factors to watch:

• Inflation: If inflation increases, the Fed may hold off on further rate cuts. It could even change direction and increase rates again.
• Employment: A strong jobs market is good news for American workers. But if it's too strong, it can push wages up. Higher labor costs can lead to higher prices -- meaning more inflation and a reason for the Fed to increase rates.

Steps you can take to continue earning high rates in 2025

If you're hoping CD rates might increase in 2025, there's a slim chance it could happen, but don't count on it. Most experts predict rates on high-yield savings accounts and CDs will actually fall.

Here are three moves you can make to continue earning strong returns.

1. Lock in a high CD rate today

One of the defining features of CDs is that you commit to leaving your money untouched for the CD's term. In most cases, you'll have to pay an early withdrawal penalty to access your funds before the CD matures.

The good news is that the commitment goes two ways. Your CD rate is set for the full term. If you have money you're comfortable tying up for a set period, there's still time to lock in a decent rate.

In fact, if you're able to meet the minimum deposit requirement of $500, Quontic's CD rates are extremely competitive. Find out how you can earn an APY of 4.00% on Quontic's 1-year CD today.

2. Invest on the stock market

There are a few different ways to invest on the stock market, depending on your financial goals, knowledge, and risk tolerance. Investing carries more risk than opening a CD, but over the long term, it can also generate much higher returns.

The S&P 500 is often used as a benchmark for stock market performance, as it tracks the biggest companies in the U.S. Historically, it's generated average annual returns of around 8%. You can buy ETFs or index funds that track the S&P 500 from any top brokerage account.

It's important you only invest money you won't need in the coming five to 10 years or more. It's also a good idea to first have an emergency fund with three to six months' worth of essential expenses. That will cushion you against any financial curveballs so you won't have to sell your assets if disaster strikes.

3. Pay down high-interest debt

Millions of Americans carry a balance on their credit cards. If you're one of them, you could be paying APRs of upward of 20% -- that's considerably more than you'd earn through savings or investments.

Make a plan to tackle your credit card debt. Start by looking over your recent spending to see if there are any areas where you can make cuts. If you can increase your income through a side hustle, that could give you more money to chip away at your balance.

The more aggressively you can pay off your balance, the less you'll pay in interest in the long run. Once you've paid down that debt, you'll have more money to save or invest.

Bottom line

Barring some dramatic economic changes, CD rates look likely to go down rather than up in 2025. Watch out for changes in inflation and employment data, as these are some of the indicators the Fed uses to make its decisions. And if you're trying to build wealth, think about shifting toward investing -- over time, it's a much better bet than buying CDs.