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When it comes to certificates of deposit (CD) accounts, the interest rate is key. A low CD interest rate, as many savers saw in 2020 and 2021, is generally not worth it, considering that you’ll need to forego access to your money for the full CD term. A higher interest rate, however, as many savers saw in 2022 through 2024, can generally be advantageous. This was made obvious when select savers were able to lock in rates as high as 6% and 7%. And it was generally easy to come by, as rates on short-term CDs, in a historic reversal, were often higher than those offered on long-term counterparts. To truly be able to take advantage, however, savers first needed to know what a good, short-term CD interest rate was considered to be.
And now, in early 2025, this consideration is even more important. With inflation rising in October through January and interest rate cuts paused for the foreseeable future, the interest rate climate is a lot murkier than it was just a few months ago. This should cause savers to pause before they move their money. To better understand the worth of a short-term CD in this climate, then, it helps to first know what a good short-term CD interest rate is now, in mid-February 2025. Below, we’ll break down what to know.
See how much interest you could earn with a short-term CD here.
What’s a good short-term CD interest rate in 2025?
Interest rates on short-term CDs as of February 18, 2025, according to the FDIC, range from 0.22% for a 1-month CD to 1.80% for a 12-month CD (short-term CDs are defined as an account with a maturity date that arrives in 12 months or less). So, technically, a “good” CD interest rate is anything above that minor threshold. But savers can easily find much better and higher rates simply by shopping around online for lenders.
According to Bankrate, savers can find a 1-month CD with a rate of 3.00% right now (or 1,263% higher than the average 0.22%). But rates are even higher for slightly longer terms. For example, 3-month CDs have rates as high as 4.50% now while 6-month CDs have rates around 4.45% and 1-year CDs have rates around 4.40%. So if you want a really good, short-term CD interest rate now, anything above those rate points could qualify.
And it may be easier to find than you think, with many online banks offering better rates and offers to savers than those typically found with banks with physical locations. Since the former doesn’t have the maintenance costs that the latter does, they’re often able to pass those savings on to savers via higher CD interest rates.
Shop for a high-rate, short-term CD online now.
Is a short-term CD still worth opening now?
While many may be attracted to long-term CDs and the greater earning potential available with a CD that can last multiple years, short-term CDs are still a viable option now. With inflation rising again and elevated interest rates on pause, savers can essentially get the best of both worlds by opening a short-term CD. They’ll earn a high rate but they won’t be forced to give up extended access to their funds as they would with a long-term CD. Still, that higher rate could easily be negated by the extended earning potential that long-term CDs offer, so it’s worth carefully considering both before locking your funds away in either account term.
The bottom line
A good short-term CD interest falls somewhere between 3% and 4.50% now, depending on the exact term and lenders. But it may be possible to find a very good short-term CD interest rate simply by shopping around and comparing both online banks and those with physical branches. Just avoid leaving your money in a traditional savings account now. With rates there under 0.50% you’re essentially losing money by not moving a portion of your funds into one of these much higher-rate alternatives right now.
Learn more about your current CD options here.