Will CD Rates Fall This Summer? Here’s a Key Indicator to Watch

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The Top Factor Influencing CD Rates

The Federal Reserve controls a benchmark interest rate, called the federal funds rate, which can be adjusted to fight inflation and manage the economy’s growth. The fed funds rate is important to everyday savers because it directly influences the interest rates that banks and credit unions are willing to pay on deposits in savings, money market, and certificate of deposit (CD) accounts.

In 2022–2023, the Federal Reserve raised the federal funds rate to its highest level in two decades to fight post-pandemic inflation. That in turn raised savings and CD rates to their highest levels in 20-plus years.

Since then, bank deposit rates have come down some, as the Fed began lowering its benchmark rate in late 2024—with three cuts last fall totaling one percentage point. But the central bankers have put further rate moves on ice so far this year, largely due to the economic uncertainty introduced by President Donald Trump’s on-again, off-again tariff policy.

As a result, the rate pause has left the best savings accounts and the leading CDs still paying very high rates in the mid-4% range.

When Will the Fed Cut Rates?

At any given moment, you can look up the real-time probabilities that interest-rate traders are pricing into the market for various Fed rate moves with the CME Group’s FedWatch Tool. By looking at this online chart, you can see what odds the financial market is currently placing on Fed rate changes at any of the central bank’s upcoming rate-setting meetings.

The Fed’s upcoming meeting will conclude with an announcement on June 18, and at the time of this writing, there’s a 98.8% probability of the central bankers announcing yet another rate hold.

After June, the Fed’s next rate announcement is scheduled for July 30. Here the odds of a rate cut rise a bit, but only to about 26%—with the remaining 74% probability predicting a rate pause again in July.

It isn’t until the Sept. 17 announcement that today’s markets show majority odds for a rate reduction by the Fed, with a 69% probability of rates being at least 0.25 percentage points lower than today. That leaves a 31% chance we could see a September rate hold, and the odds of no cuts in the fall dwindle to just 15% after the Oct. 29 rate announcement.

Note that interest-rate traders see a 0% chance of any rate hikes from the Fed this year, meaning all expectations are for stable or declining interest rates through the end of 2025.

When Will CD Rates Fall?

It’s impossible to know how the Fed will actually act in the coming months and the rest of 2025, as its decisions are always made meeting-by-meeting based on the latest ecomomic indicators. And with many of these being lagging measures, strong signals have yet to arrive on the full impact of President Trump’s tariffs. Also still uncertain is the final scope and magnitude of the various tariffs.

Until it seems clear the Fed is ready to make a move, the best CD rates are likely to remain generally stable. If the current predictions prove accurate, with no Fed rate cut through June and July, CD rates might not fall until August or September.

But market predictions can change at the drop of a hat, so it’s useful to keep an eye on the CME FedWatch Tool. For instance, we expect to see a strong majority prediction building for an upcoming Fed rate cut at some point. Once that happens, some banks and credit unions will begin to feel confident in lowering their CD rates.

That said, any specific CD offer can evaporate overnight. So while we can speak to the general trend of CD rates as a whole, it’s still a great time to lock in any particular CD deal you find with a great rate and a term that suits your financial timeline. Because while it’s true interest rates could hold steady for a while, the expectation is that rates later this year will be worse than they are today.

How We Find the Best Savings and CD Rates

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.