What's a Good CD Interest Rate This August?

Interest rates for Certificates of Deposit (CDs) are proving competitive this August, defying earlier expectations of further Federal Reserve rate cuts. The economic landscape has shifted significantly since January, with inflation and rising oil prices altering the anticipated trajectory.

Initially, the Federal Reserve had implemented three rate cuts in late 2025, and a fourth was widely expected in 2026. However, persistent inflation and increased oil prices, partly due to the conflict with Iran, have prompted the Fed to pause rate adjustments. The Fed has maintained its current rates through its first five meetings this year. According to the CME Group's FedWatch tool, there is now a nearly 60% chance of a Fed rate hike when the bank convenes again in September.

This environment necessitates a reevaluation of what constitutes a "good" interest rate for both savers and borrowers. Mortgage rates, for instance, have changed considerably in recent months. Similarly, interest rates on select savings accounts have adjusted, offering savers better opportunities to grow their money compared to the winter or late 2025.

For prospective CD account holders, this situation is particularly relevant as CD rates are fixed. Locking in a high rate now could be advantageous, especially since competitive rates are available across various account terms. To help savers identify favorable options, here are some benchmark CD interest rates considered good for August:

* 3-month CD: 3.95% * 6-month CD: 4.15% * 9-month CD: 4.10% * 1-year CD: 4.40% * 18-month CD: 4.35% * 2-year CD: 4.30% * 3-year CD: 4.50%

While these rates represent some of the best available, savers are advised not to rush into opening an account solely based on these figures. Early withdrawal fees can negate most, if not all, of the interest earned. It is crucial to be confident in one's ability to keep the funds in the account until the maturity date to fully benefit from the high rate.