Fed Rate Cut Triggers Decline in Top CD and Savings Account Rates

Despite the Federal Reserve's 0.50% rate cut, high-yield savings accounts and CDs still offer competitive returns, but further declines are expected.

The Federal Reserve reduced the federal funds rate by 0.50 percentage points, the first cut since March 2020.
The top 1-year CD rate has dropped from 5.25% to 5.15%, with fewer options available to lock in this rate.
High-yield savings accounts are still offering up to 5.50% APY, though rates are anticipated to decrease further with additional Fed cuts.
Longer-term CDs now offer returns in the low- to mid-4% range, with the highest rates available for terms up to 5 years.
Savers are encouraged to lock in current rates soon as further reductions in interest rates are expected through 2024 and 2025.