In today’s economic climate marked by persistent inflation, finding effective ways to save money and preserve purchasing power can be challenging. Inflation erodes the value of money over time, so if your savings do not earn returns at least equal to the inflation rate, your money effectively loses buying power. One financial product that stands out as a solid solution amid these conditions is the certificate of deposit (CD). Unlike many other savings options, many of today’s top CDs offer interest rates that surpass the current inflation rate, providing savers with a meaningful way to grow their money safely.
A certificate of deposit is a time-bound deposit product offered by banks and credit unions, usually with a fixed interest rate for a predetermined term. One of the key advantages of CDs in the current environment is the ability to lock in today’s relatively high interest rates for the entire term of the deposit. This feature can be particularly valuable as it protects savers from future rate fluctuations or declines. Additionally, CDs come with a strong safety net. Most are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) for balances up to $250,000, which gives depositors peace of mind that their money is secure even if the financial institution faces difficulties.
If you’re considering investing in CDs, it’s important to understand that the rates available vary widely depending on the type of CD, the term length, and the financial institution offering it. As of November 24, 2025, national averages for CD rates provide a useful benchmark, but they don’t tell the whole story. The best CD rates available today often exceed those averages, especially when you look beyond traditional brick-and-mortar banks.
One of the main reasons for this discrepancy is the difference between rates offered by online banks versus large traditional banks. Online banks and the online arms of larger banks typically have lower overhead costs because they don’t operate extensive branch networks. These savings on operational expenses often translate into higher interest rates for savers. Over the past several years, online banks have generally been quicker to adjust their rates in line with changes made by the Federal Reserve, which means they tend to offer more competitive CD rates.
On the other hand, large national banks with widespread branch networks often offer lower CD rates, sometimes barely above zero. These banks may prioritize convenience and access to physical locations over offering the highest savings rates. Therefore, if your primary goal is to earn the best possible return on your CDs, exploring online banks and credit unions is a smart strategy.
When it comes to the length of the term, CDs can range from very short durations—around one to three months—to long commitments like 10 years. However, in the current economic climate, shorter-term CDs, particularly those ranging from six months to one year, tend to offer the best interest rates. This trend is somewhat unusual compared to historical norms.
Typically, longer-term deposits pay higher interest rates to compensate investors for locking up their money for a longer period. But since 2022, data from Bankrate and other sources show that one-year CD yields have consistently surpassed five-year CD yields. This unusual pattern is known as an “inverted yield curve,” a phenomenon where interest rates for short-term investments are higher than those for long-term investments.
Donald F. Dempsey, a certified financial planner and founder of Dempsey Investment Management, explains that the inverted yield curve means rates are highest for short-term CDs and Treasury securities, while rates decrease for longer terms. This environment reflects market expectations about future interest rates and economic conditions.
For savers, an inverted yield curve presents a unique opportunity but also requires strategic planning. One approach to benefit from high short-term rates while maintaining long-term savings goals is called “laddering.” Laddering involves dividing your total investment into multiple CDs with staggered maturities—some maturing after one year, others after two years, three years, and so on. This method allows you to take advantage of the higher rates on shorter terms now while gradually moving into longer terms as you reinvest upon maturity. The laddering strategy balances liquidity with the potential for better returns over time.
In addition to CDs, savings accounts in general are currently offering higher interest rates than in recent years, reflecting the Federal Reserve’s rate hikes aimed at taming inflation. This environment makes it a favorable time to park your money in interest-bearing accounts, whether that’s a high-yield savings account or a CD.
However, not all CDs