What's a good long-term CD interest rate for 2025?
Although inflation and an aggressive interest rate hike campaign courtesy of the Federal Reserve made borrowing more costly for many Americans in 2022 and 2023, there was a silver lining for savers: higher interest rates on their money. With rates under 1% on high-yield savings and certificates of deposit (CD) accounts in 2020, savers had little way to boost their money. But rates on both accounts surged in subsequent years, with returns on the latter type hitting 6% and 7% for some savers. And, in a rate reversal, savers were able to secure higher rates on short-term CDs (which mature in under a year) than they were with long-term CDs.
The interest rate climate of 2025, however, is a bit different. Inflation has declined. Interest rate cuts have been issued. And CD rates aren't quite as high as they were. But that doesn't mean that savers still can't earn a return worth hundreds or even thousands of dollars. It will just require a bit more nuance and strategy. That starts, particularly, with understanding what is (and isn't) considered a good, long-term CD interest rate right now.
Start by seeing how much more you could be earning with a top CD here.
What's a good long-term CD interest rate for 2025?
According to Bankrate, rates on 3-year CDs are averaging 1.42% and 1.44% for 5-year CD terms. So, technically, if you can find a CD rate around that or higher it would be considered "good." But those averages are low when matched against the full array of options. Online banks, actually, frequently offer rates exponentially higher. For example, savers can easily lock in an 18-month CD with a rate of 4.16%, a 2-year CD at 4.15%, a 3-year CD at 4.15% and a 5-year CD at 4.25%.
Since online banks don't have the same maintenance costs that banks with physical locations do, they tend to pass on those savings to customers in the form of higher rates on items like CD accounts. So, if you can find a rate around those noted for any of those respective long-term CDs, you can consider it a "good" one now. That said, rates on these terms were all closer to the 5% range or higher as recently as 2023, so the trend for CD rates overall, including long-term ones, is a downward one.
It makes sense, then, to lock in one of these accounts while they're still available. Just be sure to do so with an amount of money that you can easily afford to leave in the account for the full term or you'll get stuck paying an early withdrawal penalty to regain access.
Get started with a top long-term CD now.
The bottom line
A good long-term CD interest for 2025 is one that's slightly higher or around what's available with online banks. But with the interest rate climate on hold – and additional declines possible for later in the year – delaying action won't make sense. So consider calculating your potential deposit amount now, look to lock the highest rate possible and consider online CDs versus your local branch. By doing so, you can better improve your chances of long-term CD investing success both in 2025 and the years that follow.
