--- title: CD Rates Are Starting to Drop. Is It Too Late to Buy? description: Banks are lowering CD rates now that the Federal Reserve is expected to cut interest rates. Is it still a good time to buy CDs with high APY? authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 501 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2024-02-01T13:00:48.000Z' modified: '2026-07-31T14:26:30.000Z' section: Banking tags: - News word_count: 675 canonical: https://money.com/cd-rates-falling-good-time-to-buy/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We may earn a fee if you click on the links below. Compensation does not determine ranking. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo-illustration of hands reaching out with money before the arrow turns down.](https://img.money.com/2024/01/News-Buy-CDs-Now.jpg) Payouts from [certificates of deposit (CDs)](https://money.com/what-is-a-certificate-of-deposit/) are already beginning to fall in anticipation of benchmark interest rate cuts from the Federal Reserve later this year. Due to their attractive APYs, CDs have become an increasingly popular, safe option for folks to park their savings. However, the days of CD rates above 5% are probably numbered. In recent weeks, several major [online banks](https://money.com/best-online-bank/), including Ally, Barclays, Discover, Marcus, Sallie Mae and Synchrony, have started slashing their 12-month CD rates. For instance, 12-month CDs at [Barclays](https://money.com/pr/v5d7482c5d6a?ap_referrer=https%253A%252F%252Fmoney.com%252Fcd-rates-falling-good-time-to-buy%252F) now come with an APY of 4.15% at press time. [Sallie Mae](https://money.com/pr/mf79db82f853?ap_referrer=https%253A%252F%252Fmoney.com%252Fcd-rates-falling-good-time-to-buy%252F) lowered its APY from 5.5% to 5.25% over that same period. [Discover](https://money.com/pr/u89384dbf055?ap_referrer=https%253A%252F%252Fmoney.com%252Fcd-rates-falling-good-time-to-buy%252F), [Marcus](https://money.com/pr/me7e049f6427?ap_referrer=https%253A%252F%252Fmoney.com%252Fcd-rates-falling-good-time-to-buy%252F) and [Synchrony](https://money.com/pr/i24cfccef3f5?ap_referrer=https%253A%252F%252Fmoney.com%252Fcd-rates-falling-good-time-to-buy%252F) have all cut their [CD rates](https://money.com/best-cd-rates/) in recent weeks too. During Ally’s latest earnings call on Jan. 19, CFO Russ Hutchinson said the bank has cut CD rates twice already in January and signaled more are coming in 2024. ## Lock in your CD rate before they start to fall ### Don't miss out on current rates! If you're seeking a low-risk option beyond stocks and bonds, explore the benefits of a Certificate of Deposit (CD) with Discover®️. Click on your state to kickstart your CD account today. [See Offer](https://money.com/pr/z11b33a9f54e?ap_referrer=%2Fcd-rates-falling-good-time-to-buy%2F) ## Why are CD rates falling? The APY you earn on your CD is largely based on trends with the Federal Funds rate, which is set by the Federal Reserve. When the Fed began hiking rates back in 2022 in an effort to rein in out-of-control inflation, one welcome side effect for savers was that APYs across deposit accounts, such as CDs, [savings accounts](https://money.com/best-high-yield-savings-accounts/) and [money market accounts](https://money.com/best-money-market-accounts/), started to rise in tandem. Because the Fed's strategy to tame inflation has largely proven successful — and consumer prices have moderated — the nation's central bank is almost universally expected to begin cutting rates in 2024. The question, now, is not *if* the Fed will cut rates; rather, it’s *when* and by *how much*. The [Fed decided to keep rates steady](https://money.com/what-happens-when-fed-cuts-interest-rates/) on Wednesday, but it will meet eight more times in 2024, giving it eight more opportunities to cut them. According to the CME FedWatch Tool, the earliest most investors expect the Fed to begin cutting rates is at its next meeting, in March. Many bankers don’t expect rate cuts to happen until the second half of the year. Still, with several cuts on the horizon, some banks have already begun preparing by lowering the APYs on their CDs, whose terms could be locked in long past the time the Fed lowers rates. ## Opening a Certificate of Deposit (CD) account can be a safe way to grow your savings ### A Discover®️ CD account is a great financial tool to build your savings for a short-term goal. Click below to open a CD account. [See Offer](https://money.com/pr/laa05c687bed?ap_referrer=%2Fcd-rates-falling-good-time-to-buy%2F) ## Should you lock in high CD rates now? While they differ on the exact timing of the Fed rate cuts, economists, investors and advisors are all in near unanimous agreement that rate cuts are coming in 2024. That means the APYs on CDs have nowhere to go but down as the year progresses. That said, CDs aren’t for everyone. Once you open a CD, you typically must keep the money in the account for the selected term (often between one month and upwards of 10 or more years) for it to be a good investment. If you withdraw the money before the CD's term ends, banks typically charge early withdrawal fees, which are penalties on the interest you’ve accumulated at the time of the withdrawal. These fees can significantly eat away at the advertised APY. Given that caveat, CDs aren’t always the best recommended place to put an emergency savings fund — since that money needs to be readily available in the event of a major, unexpected expense. Lawrence Sprung, founder and wealth advisor at Mitlin Financial, recently told Money that one way savers can [take advantage of attractive CD rates](https://money.com/best-time-to-buy-cd-2024/) while keeping their savings liquid is through a strategy called [CD laddering](https://money.com/high-interest-rates-cd-ladder/). In short, you can spread a portion of your savings across CDs with various terms, such as three months, six months, one year and five years, for example. "So you'll have rates locked in," Sprung said. "You may get a blended rate that may not be the best rate available, but you'll get close to it and also have some liquidity and availability to that money." ![](https://s3.consumersadvocate.org/prd/image/image/36133/medium_540498b7-511a-4fa5-8824-09ca78d750b2.webp) Start growing your savings today with a CD from Bread Financial [See Offer](https://money.com/pr/gef6655c2bc3?ap_referrer=%2Fcd-rates-falling-good-time-to-buy%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/cd-rates-falling-good-time-to-buy/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Banking", "item": "https://money.com/banking/" }, { "@type": "ListItem", "position": 3, "name": "Certificates of Deposit", "item": "https://money.com/certificates-of-deposit/" }, { "@type": "ListItem", "position": 4, "name": "CD Rates Are Starting to Drop. 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