Remember when savings accounts paid practically nothing? I still have nightmares about 2021 when the best one-year CD in the country barely scraped together 0.17%. Fast forward to the end of 2025 and — believe it or not — some of us are still able to lock in 4% or better on certificates of deposit. But the clock is ticking louder than ever.
The market has already priced in an 87% chance the Federal Reserve drops rates again next week. When that happens, every cash instrument from money markets to high-yield savings will feel the ripple. The smart money isn’t waiting to find out how deep the cuts will go — they’re moving cash into CDs right now.
Why 4% Still Matters in Late 2025
Four percent might not sound life-changing compared to the 5.5% we saw a couple of years ago, but put it in perspective. Inflation has cooled to the low 2% range most months this year. Earning 4% guaranteed, backed by FDIC insurance, is essentially like picking up 1.5–2% of pure profit every year with zero stock-market drama. In my book, that’s still free money.
I’ve watched rates slide for months. Some online banks have already trimmed their savings accounts by 10, 20, even 40 basis points since summer. CDs, though, move slower — especially the promotional offers. That lag creates a window, and that window is closing.
Where the 4% (and Slightly Higher) CDs Still Live
As of the first week of December 2025, several institutions haven’t flinch yet. The sweet spot right now seems to be the 9- to 14-month terms — long enough to ride past the next couple of Fed meetings, short enough that you’re not married to the rate forever.
- Many competitive credit unions and smaller online banks are holding the line at 4.25%–4.50% for 11–13 month terms
- National online banks still show 4.00%–4.15% on 12-month CDs
- Even some traditional brick-and-mortar banks have promotional rates north of 4% if you ask the right branch manager
- Brokerage platforms occasionally surface limited-time 4%+ offers from partner banks
The median one-year CD across the industry sits around 3.8%, but the upper quartile — the top 25% of offers — is still comfortably above 4%. That gap is your opportunity.
The CD Ladder Strategy Everyone Is Talking About
Locking every dollar into a single five-year CD at 3.75% feels like a gut punch when rates could bottom and start climbing again in 2027. The fix? Build a short-term ladder.
“I’m telling clients to spread money across 3, 6, 9, and 12-month CDs right now. You capture today’s yields, keep liquidity every quarter, and if rates fall further you simply roll the maturing rung into whatever looks best at that moment.”
— Financial planner based in the Northeast
I’ve set up a few of these ladders myself for family members this fall. The beauty is psychological as much as mathematical — you never feel “stuck.” When the 3-month rung matures in March, you decide fresh: take the cash, reinvest at whatever the new 12-month rate is, or shift to something else entirely.
No-Penalty CDs: The Escape Hatch You Didn’t Know You Needed
Here’s a sleeper option that doesn’t get enough love: no-penalty CDs. A handful of institutions offer them at rates within spitting distance of regular CDs — sometimes 3.75%–3.90% — but you can pull your money any time after the first six days without losing a dime of interest.
Think of it as a high-yield savings account wearing a CD costume. Perfect for emergency funds or money you’re pretty sure you won’t touch but want the extra quarter-percent just in case.
What Happens After the December Cut?
Most analysts expect another quarter-point trim in December, possibly one more in early 2026, then a pause. If that script plays out, today’s 4% CDs will look brilliant twelve months from now when new ones struggle to hit 3.25%.
Even if the Fed surprises and holds steady, you’re still earning 4% guaranteed. There is literally no downside other than tying up cash you might need tomorrow — which is why the ladder or no-penalty options exist.
How Much Could You Actually Earn?
Let’s run quick numbers on $100,000, because round numbers are easier to feel:
| Term | Rate | Interest Earned |
| 12 months | 4.15% | $4,150 |
| 18 months | 4.00% | $6,000 |
| Current top HYSA | 3.65% | $3,650 (12 mo) |
That extra $500–$2,350 isn’t going to buy a yacht, but it’s found money for doing absolutely nothing different except clicking a few extra buttons today.
The Psychological Edge of Locking In
Perhaps the most underrated benefit is peace of mind. Once the CD is funded, the rate is locked. No more refreshing bank apps every morning wondering if your savings yield just got shaved again. In a world that feels increasingly noisy, that certainty is worth something.
I’ve had readers tell me they sleep better knowing their emergency fund is earning 4% safely instead of 3.3% while they wait for “the perfect moment.” The perfect moment, by the way, was usually six months ago.
Action Steps for This Week
- Inventory your cash: how much can sit untouched for 6–18 months?
- Check the top rates daily — they change without warning
- Open accounts at two or three institutions if needed (many still offer new-customer bonuses)
- Fund before the next Fed announcement — banks often pull best rates the same day
- Consider splitting into rungs: 25% at 6 months, 25% at 9, 50% at 12–14
The bottom line? Four-percent-plus CDs won’t be the norm much longer. If you’ve been sitting on cash earning mid-3s wondering whether to pull the trigger, this is your sign. The window is still open — but I can already hear it creaking shut.
Seriously, go check rates right now while you’re thinking about it. I’ll wait here. You can thank me when that first interest payment hits next year and you’re still smiling at a solid 4% while everyone else is scrambling for whatever scraps are left.
