Best CD rate for January 2025: The best way to get the highest annual percentage on your savings is to keep your savings in CD (certificate of deposit). This article will help you to understand that. What is the CD rate and the Best CD rate in January 2025 for you?
What is the CD rate?
A CD rate is an interest rate that a bank or credit union will pay you for depositing your money with them for a certain time period in a certificate of deposit (CD).
It is a long time investment without any risk. For an example: if the interest rate is 4.50% for a 1-year CD. The bank or credit union will pay you 4.50% in interest on money if the person is keeping the amount in the account, untouched, for 12 months. If a person deposits $1,000 in that account and keeps it there for 12 months, the person will earn $45 at the end of the term.
Latest News about The Best CD rate for January 2025
CD rates in January are lower than last year, with the best rate around 4% APY for one-year terms and about 3.5% for three and five years terms. Some short term CDs, like nine or 13 month, still offer over 4%, with the highest at 4.54% APY from NASA Federal Credit Union. However, rates may drop further as the Federal Reserve continues to lower its rate. If you are considering a CD, it might be a good time to lock in higher rates before they fall further.
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How does a CD work?
It is similar to a bank deposit but the difference is that you have to keep the amount untouched for a certain period.when the period is completed a certain interest rate is added to the amount which you have agreed. There are some key features as written below :
The interest rate: Most CDs pay a fixed amount of interest rate as you have agreed at the time of opening.
The term: This is the length of time you agree to leave your money deposited to avoid any penalty (minimum six months or 1 year) The term ends on the “maturity date,” when you can withdraw your money without any penalty.
The institution: The bank or credit union through which you will open your CD will determine aspects of the agreement, such as early withdrawal penalties and whether your CD will be automatically reinvested if you don’t provide other instructions at the time of maturity. Credit unions may also require you to open a savings account or money market account before you open a CD.
The Best CD rate for January 2025
The best rote of CD investment is as written below :
| Institution | Time period | (APY) Rate |
| Nuvision Credit Union | 8 months | 5.50% |
| Abound Credit Union | 8 months | 4.75% |
| Genisys Credit Union | 7 months | 4.73% |
| MutualOne Bank | 3 months | 4.70% |
| Bask Bank | 3 months | 4.65% |
| INOVA Federal Credit Union | 5 months | 4.65% |
| Mills42 Federal Credit Union | 5 months | 4.65% |
| Communitywide Federal Credit Union | 6 months | 4.65% |
| OMB | 7 months | 4.65% |
| Elements Financial | 8 months | 4.65% |
| TotalBank | 3 or 6 months | 4.61% |
| Brilliant Bank | 3 months | 4.60% |
| INOVA Federal Credit Union | 6 months | 4.60% |
| MutualOne Bank | 6 months | 4.59% |
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How to choose the right CD?
1. CD Term: CD term means how long your money will stay in the CD. Terms range from 3 months to 5 years. Shorter terms offer flexibility, on other hand longer terms usually have higher rates.
2. CD Type: Standard CDs have fixed rates, but special types like no-penalty CDs allow you withdraw early without fees, and bump-up CDs allow you to increase your rate during the term.
3. CD Rate: Before getting a CD you must Compare rates from banks and credit unions after deciding on the term and type. Aim for the best rate, even if it means opening an account at a new bank.
4. CD Deposit: you must Decide how much to put in based on your savings goals. Keep deposits under $250,000 per bank to ensure FDIC protection.
5. CD Penalty: If you withdraw money early, you will face a penalty, often several months of interest. You must Choose a term you can commit to avoid this.
Conclusion
A certificate of deposit (CD) is a safe and reliable way to grow your savings over time. It offers a fixed interest rate and requires you to keep your money untouched for a specific period. To choose the best CD, consider the term, type, rate, and your savings goals.
Compare rates from different banks or credit unions and ensure your deposit stays within FDIC or NCUA limits for protection. With rates likely to decrease, now might be a good time to lock in a higher rate. Remember to choose a CD term you can commit to in order to avoid penalties.
