What's the CD account interest rate forecast for fall 2025?

Savers shopping for certificates of deposit (CDs) today face a key question: Are interest rates as good as they’ll get? Or, should they wait for potentially better opportunities? Many banks are offering CD rates in the 4% to 4.5% range. But economic conditions are creating uncertainty about what comes next.

The latest inflation data shows consumer prices rose 2.7% over the past year, holding steady but still above the Federal Reserve’s 2% target. In July, Fed officials decided to maintain interest rates at a range of 4.25% to 4.5%. However, two members of the Federal Open Market Committee (FOMC) favored cutting rates immediately. This division among policymakers adds another layer of complexity for savers.

With the Fed’s next meeting in September, CD rates could move in several directions this fall. Below, savings experts outline possible scenarios and share guidance on timing your CD strategy.

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What’s the CD account interest rate forecast for fall 2025?

Many financial experts expect CD account interest rates to decline over the coming months.

Christopher Hodge, chief economist of the U.S. at global financial institution Natixis CIB Americas, predicts that “average 12-month CD rates will begin edging lower by late September and into the fourth quarter, falling about 25 to 50 basis points by year-end.” His forecast hinges on the Federal Reserve restarting its rate-cutting cycle in September with gradual moves to ease monetary policy.

Market expectations align with this outlook, according to Matt Gentzkow, investment strategist at investment advisory firm Waddell & Associates. “Expectations are for the committee to cut rates by 25 basis points in September, but split on the October meeting,” he explains. Gentzkow believes CD account holders can still expect to see decent rates between 4% and 4.5% this fall. But they’ll likely tick downward as Fed policy shifts.

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Despite these analyst predictions, economic conditions could push CD rates in different directions. Here’s how each could play out:

CD account interest rates may drop

Hodge expects “slower economic growth, unemployment ticking up toward 4.8% and the Fed cutting rates” to pull CD yields lower. Banks typically follow Treasury yields and the Fed policy when adjusting deposit rates, though changes don’t happen immediately.

A steeper drop would require dire economic trouble. “Increasing job losses and slowing economic data would cause the Fed to cut rates faster than anticipated,” Gentzkow notes. “With a strong economy and falling inflation, interest rates will come down, but not nearly as much under a significant economic slowdown.”

Kenneth Ceonzo, senior vice president and chief financial officer at Ridgewood Savings Bank, points to reduced competition among banks for deposits as another factor that could drive rates down.

CD account interest rates may stay the same

“Flat CD rates would require a ‘wait-and-see’ Fed — meaning the job market holds up better than expected and growth remains decent enough to make rate cuts unnecessary,” says Hodge. In this scenario, competition among online banks and credit unions could keep CD rates near current levels.

Persistent inflation would be the key factor keeping rates unchanged. Gentzkow notes that this could prompt the Fed to reassess the market’s expectations for a rate cut. With no policy changes, short-term CD rates would stay relatively the same.

CD account interest rates may rise

It’s not likely CD rates will rise, but it could happen under specific conditions. Both Hodge and Gentzkow agree that it would require a significant re-acceleration of inflation, combined with strong job growth and consumer spending holding strong. Such developments could force the Fed to consider hiking rates.

How savers should position themselves CD rate drops

Given the unpredictable rate environment, experts recommend three ways to maximize returns while managing risk:

• Take advantage of current rates. “If your goal is to secure the highest guaranteed yield, now is the safer bet,” Hodge advises. CD rates are more likely to fall than rise over the next six months.
• Use a CD ladder strategy. “Allocate a portion to shorter dated maturities (zero to three months), while allocating some to longer dated maturities (one to three years),” suggests Gentzkow. “This helps mitigate a drop in interest rates while providing some liquidity in the near term.”
• Avoid locking up money for too long. Ceonzo warns against committing to CD terms longer than you might need the money. Early withdrawal penalties could cancel out your interest gains.

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The bottom line

Most experts expect gradual rate cuts ahead, making current rates valuable for savers willing to lock them in. However, Hodge cautions that rolling over short-term CDs without considering the rate environment can lead to disappointment when renewal rates drop. CD accounts offer different benefits and term options depending on your goals and timeline. Before committing to one, speak with a financial advisor or your bank’s deposit specialist to explore your options.