Are CDs Worth It in May 2025?

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Some of the top CDs are paying well over 4.00% APY right now — a rare treat if you’ve been stuck earning pennies in a basic savings account.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. But with the Federal Reserve hinting at rate cuts later this year, you might be wondering: Should you lock in today’s high rates? Or is it smarter to keep your cash flexible?Let’s break down the latest CD rates, a smart strategy for investing in CDs, and how high-yield savings accounts (HYSAs) stack up today.Best short-term CD rates in May 2025Right now, short-term CDs are offering higher yields than their longer-term counterparts.Here’s how the top shorter-term CD rates stack up as of May 2025:Term LengthTop CD Rate (May 2025)6 months4.55%12 months4.30%14 months4.40%Data source: Issuer websites.If the Fed lowers rates soon, we’ll likely see these rates drop quickly. So if you’ve got cash you don’t need for the rest of 2025, it might make sense to lock in a great rate while you can.Explore all the top CDs of May 2025 to see the latest high-rate options before they disappear.A CD ladder can give you more flexibilityIf you’re worried about locking up cash for too long, CD laddering can be a good strategy.It works like this:Start by splitting your money into equal parts. For example, you might split $20,000 into four lots of $5,000.Next, open several CDs with staggered terms. For example, one for 6 months, one for 12 months, one for 18 months, and another for 24 months. Put $5,000 into each.As each CD matures, you can either cash it out if you need the money, or roll your funds into a new long-term CD to keep the ladder going.Laddering allows you to lock in today’s great rates, but gives you regular chances to change your strategy (or lock in higher rates if they come available).If you’re building a ladder, short-term CDs are your best building blocks right now thanks to their higher APYs.High-yield savings accounts are great tooIf locking up your money makes you nervous, a high-yield savings account might be a better home for your cash.Right now, the best online HYSAs are paying around 4.00%, which is only slightly lower than what you can earn with short-term CDs.The main downside is: HYSA rates are variable. If the Fed cuts rates, your savings rate will follow suit, unlike your CD rate that’s locked in.Personally, I keep about $25,000 in an HYSA. For me, it’s worth a little less yield to know I can access my cash instantly if something unexpected comes up.If flexibility matters more to you than squeezing out a little extra yield, a HYSA wins. Compare the top online high-yield accounts of 2025 here, and start earning up to 4.40% APY on your savings.Don’t miss today’s high ratesCDs are absolutely still worth considering in May 2025 — but only if they fit your savings timeline. If you can afford to lock your money up for between six and 18 months, CDs paying over 4.00% could be an awesome low-risk win.But if you need fast access to your money, a high-yield savings account is the safer, smarter play.Either way, don’t let your cash sit in an account earning 0.01%.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Some of the top CDs are paying well over 4.00% APY right now — a rare treat if you’ve been stuck earning pennies in a basic savings account.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

But with the Federal Reserve hinting at rate cuts later this year, you might be wondering: Should you lock in today’s high rates? Or is it smarter to keep your cash flexible?

Let’s break down the latest CD rates, a smart strategy for investing in CDs, and how high-yield savings accounts (HYSAs) stack up today.

Best short-term CD rates in May 2025

Right now, short-term CDs are offering higher yields than their longer-term counterparts.

Here’s how the top shorter-term CD rates stack up as of May 2025:

If the Fed lowers rates soon, we’ll likely see these rates drop quickly. So if you’ve got cash you don’t need for the rest of 2025, it might make sense to lock in a great rate while you can.

Explore all the top CDs of May 2025 to see the latest high-rate options before they disappear.

A CD ladder can give you more flexibility

If you’re worried about locking up cash for too long, CD laddering can be a good strategy.

It works like this:

• Start by splitting your money into equal parts. For example, you might split $20,000 into four lots of $5,000.
• Next, open several CDs with staggered terms. For example, one for 6 months, one for 12 months, one for 18 months, and another for 24 months. Put $5,000 into each.
• As each CD matures, you can either cash it out if you need the money, or roll your funds into a new long-term CD to keep the ladder going.

Laddering allows you to lock in today’s great rates, but gives you regular chances to change your strategy (or lock in higher rates if they come available).

If you’re building a ladder, short-term CDs are your best building blocks right now thanks to their higher APYs.

High-yield savings accounts are great too

If locking up your money makes you nervous, a high-yield savings account might be a better home for your cash.

Right now, the best online HYSAs are paying around 4.00%, which is only slightly lower than what you can earn with short-term CDs.

The main downside is: HYSA rates are variable. If the Fed cuts rates, your savings rate will follow suit, unlike your CD rate that’s locked in.

Personally, I keep about $25,000 in an HYSA. For me, it’s worth a little less yield to know I can access my cash instantly if something unexpected comes up.

Don’t miss today’s high rates

CDs are absolutely still worth considering in May 2025 — but only if they fit your savings timeline. If you can afford to lock your money up for between six and 18 months, CDs paying over 4.00% could be an awesome low-risk win.

But if you need fast access to your money, a high-yield savings account is the safer, smarter play.

Either way, don’t let your cash sit in an account earning 0.01%.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

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