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As was overwhelmingly expected, the Federal Reserve's rate-setting committee announced today that it is maintaining the federal funds rate at its current level. This matters to savers because central bank rate changes trigger banks and credit unions to follow suit with deposit rate changes for consumers.
The federal funds rate sat at a 23-year high from July 2023 until September 2024, raised to that level by the central bank to combat decades-high inflation. With inflation now significantly cooled, the Fed moved to a rate-cutting phase last fall, with rate reductions in September, November, and December. The three cuts lowered the Fed's benchmark rate by a full percentage point.
But inflation is still proving stubborn, hovering below 3% but not yet down to the Fed's desired 2% target. As a result, the Fed's "dot plot" forecast released last month indicated the central bankers were predicting just two 2025 rate cuts—of a quarter-point each—across the coming year's eight meetings.
The Federal Reserve only releases its own rate forecast once per quarter, so we won't get to see behind that curtain again until March. But federal funds futures traders continually assess the probabilities of different rate scenarios going forward, and you can see the changing odds in real-time at the CME Group's FedWatch Tool.
Rate predictions that extend more than a month or so are not considered reliable, as the Fed makes its rate decisions meeting by meeting based on the latest economic data. But we can look to see what probabilities traders are pricing in at this time on where the federal funds rate will land by the end of 2025.
As you can see below, the largest odds are placed on two 2025 rate cuts of 25 basis points each, with a third of traders pricing in that probability. But notably, more than 40% of traders are betting on either no cut or just a single reduction this year. Only a quarter think we'll get to at least three cuts in 2025.
As for when the Fed's predicted rate reductions will arrive, markets are betting we'll be waiting several months before the first cut of 2025. In fact, most traders are pricing in rate holds at both the March and May Fed meetings, with the June meeting being the first time we see majority odds for at least one rate cut.
Thanks to the Fed pushing interest rates up dramatically in 2022–2023, savings accounts and certificates of deposit (CDs) have also been paying handsomely. Though rates on the best high-yield accounts and CDs drifted down throughout 2024, you can still earn a historically high return in the mid- to upper-4% range.
That could change at any time, since the Fed's course is never assured. And right now, an extra layer of uncertainty exists due to economic policies the new Trump administration has suggested it could implement—but that may or may not materialize.
Still, the general expectation is that interest rates will dip lower in 2025, and perhaps also in 2026. That means the rates you can earn right now with the best high-yield savings accounts are good to capitalize on while they're available. And if you can stash some cash for later, locking in one of today's best CD rates—guaranteeing it for months or years into the future—is also smart.
We update these rankings every business day to give you the best deposit rates available:
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Note that the "top rates" quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
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