Fact Check: Are cd rates going up or down?

Are CD Rates Going Up or Down?

The question of whether certificate of deposit (CD) rates are increasing or decreasing is a significant concern for savers and investors alike. As financial instruments that typically offer fixed interest rates over a specified term, CD rates can be influenced by various economic factors, including Federal Reserve interest rate policies, inflation, and market demand for savings products. This article examines the current state of CD rates, recent trends, and forecasts, drawing on multiple sources to provide a comprehensive overview.

What We Know

1. Current CD Rates: As of late October 2023, CD rates are reported to be holding steady, with some minor declines in specific terms. For example, the top one-year CD rates are around 5.67% APY, while two-year CDs are yielding approximately 5.60% APY 27.

2. Historical Context: CD rates have seen significant fluctuations over the past few years. From 2022 to mid-2023, rates increased sharply due to a series of interest rate hikes by the Federal Reserve, which raised rates 11 times during that period 4. The national average for three-month CDs has recently reached levels not seen since the mid-2000s, indicating a notable rise from previous lows 5.

3. Future Projections: Various analyses suggest that while CD rates have peaked recently, there is uncertainty about their future trajectory. Some forecasts indicate that rates may stabilize or even decline slightly in the coming months as the Federal Reserve's rate hikes begin to taper off 48.

4. Comparative Analysis: According to data from multiple sources, the national average CD rates vary significantly depending on the term length. For instance, as of October 2023, the national average for a five-year CD is around 2.01% APY, which is lower than the rates offered for shorter terms 610.

Analysis

The sources consulted provide a mix of current data, historical context, and future projections regarding CD rates.

• Source Credibility: The Federal Deposit Insurance Corporation (FDIC) is a highly credible source for national rates and rate caps, as it is a government agency tasked with maintaining stability and public confidence in the nation’s financial system 1. Other sources like NerdWallet and Investopedia are reputable financial education platforms that aggregate data from various financial institutions, but they may have a slight bias towards promoting financial products 49.

• Methodology Concerns: Many of the sources rely on averages and top rates offered by banks, which can vary widely based on geographic location and the specific financial institution. For example, while some banks may offer rates as high as 6.00%, others may provide significantly lower rates, which could skew the perceived average 39.

• Conflicts of Interest: Some sources, particularly those that are affiliated with financial institutions or products (like Bankrate), may have a vested interest in promoting higher rates to attract customers. This potential bias should be considered when interpreting their data 6.

• Lack of Specificity: While the data provides a snapshot of current rates, it lacks detailed information about the underlying economic conditions driving these changes. For example, insights into inflation rates, consumer demand for savings products, and broader economic indicators would enhance the understanding of why CD rates are fluctuating 48.

Conclusion

Verdict: Partially True

The assertion that CD rates are either going up or down is partially true. Evidence indicates that while CD rates have recently stabilized after a period of significant increases, there are minor declines in specific terms. The current rates, particularly for shorter terms, remain high compared to historical averages. However, the future trajectory of these rates is uncertain, with some forecasts suggesting potential stabilization or slight declines as the Federal Reserve's rate hikes taper off.

It is important to note that the variability in rates based on term lengths and the influence of geographic and institutional factors complicate a straightforward assessment. Additionally, the reliance on average rates can obscure the reality that individual experiences may vary significantly.

Readers should be aware of these nuances and limitations in the available evidence. As financial markets are inherently unpredictable, it is advisable to critically evaluate information and consider personal circumstances when making financial decisions regarding CDs or other investment vehicles.

Sources

1. National Rates and Rate Caps | FDIC.gov. Retrieved from FDIC.gov
2. Current CD Rates (Week of October 30th, 2023) - SuperMoney. Retrieved from SuperMoney
3. Top CD Rates Oct. 27, 2023: Two Options for Earning 6.00% - Investopedia. Retrieved from Investopedia
4. CD Rate Forecast: Are CD Rates Going Up in 2025? - NerdWallet. Retrieved from NerdWallet
5. Historical CD Rates: 1980-2023 - Forbes Advisor. Retrieved from Forbes
6. Best CD rates of May 2025 - Banking. Retrieved from Bankrate
7. Top CD rates today: Oct. 20, 2023 — Earn 5% and higher - Yahoo Finance. Retrieved from Yahoo Finance
8. Current CD Rates, May 2025: APYs Slowly Dip - NerdWallet. Retrieved from NerdWallet
9. October CD Rates Even Higher Than September in Most Terms - Investopedia. Retrieved from Investopedia
10. Historical CD Interest Rates 1984-2025 - Bankrate. Retrieved from Bankrate