{"id":3636,"date":"2025-11-25T05:35:13","date_gmt":"2025-11-25T05:35:13","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/11\/25\/what-to-do-when-your-cd-matures-in-a-falling-rate-environment-bankrate\/"},"modified":"2025-11-25T05:35:13","modified_gmt":"2025-11-25T05:35:13","slug":"what-to-do-when-your-cd-matures-in-a-falling-rate-environment-bankrate","status":"publish","type":"post","link":"https:\/\/ft365.org\/index.php\/2025\/11\/25\/what-to-do-when-your-cd-matures-in-a-falling-rate-environment-bankrate\/","title":{"rendered":"What To Do When Your CD Matures In A Falling Rate Environment | Bankrate"},"content":{"rendered":"
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Key takeaways<\/span> <\/span> <\/h2>\n
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  • CD rates are beginning to fall as the Federal Reserve shifts toward rate cuts. <\/li>\n
  • Locking in competitive yields now or laddering your CDs can protect against lower future rates. <\/li>\n
  • Savers should also consider high-yield savings or money market accounts for more flexibility and liquidity. <\/li>\n<\/ul><\/div>\n

    Certificates of deposit (CDs) have been a safe haven for savers over the past two years \u2014 offering some of the highest yields in two decades. But with the Federal Reserve now easing policy, those sky-high CD rates are starting to slip.<\/p>\n

    If your CD is about to mature, you\u2019re likely wondering how to reinvest \u2014 or whether you should at all. Here\u2019s what to do in a cooling rate environment.<\/p>\n

    The current CD rate landscape<\/strong><\/h2>\n

    In October 2025, the Fed cut rates for the third time this year, lowering the federal funds target range to 3.75%\u20134%, after an aggressive hiking cycle that brought rates above 5%. Banks and credit unions are responding quickly \u2014 average 1-year CD rates have dropped between 3%-4% in the past three months, according to Bankrate\u2019s weekly CD rate data.<\/p>\n

    The so-called \u201cCD maturity wave\u201d \u2014 roughly $2.5 trillion in deposits set to mature over the next year \u2014 means many savers will soon face a less generous landscape.<\/p>\n

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    \u201cBanks are already seeing deposit flight as savers shop around for better yields,\u201d says Joe Camberato, CEO of National Business Capital. \u201cThat competition may keep rates from collapsing immediately, but over the next six months, expect a clear downtrend.\u201d<\/p>\n<\/blockquote>\n

    Where are CD rates headed?<\/strong><\/h2>\n

    Most experts agree that CD rates will continue to edge lower through 2026.<\/p>\n

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    • Short-term outlook:<\/strong> Expect gradual declines; the largest drops often lag Fed moves by a few months.<\/li>\n
    • Long-term outlook:<\/strong> Average 12-month CD rates could slip below 3% by mid-2026 if inflation remains near the Fed\u2019s 2% target.<\/li>\n<\/ul>\n
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      \u201cWe\u2019re in the early stages of the lower-rate cycle,\u201d says Steven Conners, president of Conners Wealth Management. \u201cRates won\u2019t fall off a cliff, but the best offers will steadily disappear.\u201d<\/p>\n<\/blockquote>\n

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      Lightbulb Icon<\/title> <\/svg> <\/p>\n
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      Takeaway <\/p>\n

      If you\u2019re holding a CD maturing soon, you still have a short window to lock in higher yields<\/strong> before rates normalize.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n

      Are CDs still worth it?<\/strong><\/h2>\n

      Yes \u2014 but strategy matters more than ever.<\/p>\n

      CDs remain one of the safest investments available, FDIC-insured up to $250,000 per depositor, per institution (and NCUA-insured at credit unions). They guarantee predictable returns, which can help balance out riskier parts of a portfolio.<\/p>\n

      Still, with inflation cooling and rates dropping, you may want to diversify how you save:<\/p>\n

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      • Lock in part of your savings in longer-term CDs while yields are still competitive.<\/li>\n
      • Keep another portion liquid in a high-yield savings account<\/strong> or money market account<\/strong> in case better opportunities arise.<\/li>\n<\/ul>\n
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        \u201cIf rates fall below 3%, you might start exploring high-quality dividend stocks or bond ETFs to stay ahead of inflation,\u201d Camberato says.<\/p>\n<\/blockquote>\n

        What to do when your CD matures<\/strong><\/h2>\n

        When a CD reaches maturity, your bank will typically roll it into a new term automatically \u2014 often at a much lower rate. Don\u2019t let that happen without evaluating your options.<\/p>\n

        Here\u2019s how to make your next move:<\/p>\n

        1. Shop around before renewal<\/h3>\n

        Banks often rely on customer inertia. Check out the best online banks \u2014 smaller banks and credit unions frequently offer rates 10\u201320x higher than the national average.<\/p>\n

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        \u201cThe four largest banks \u2014 JPMorgan Chase, Bank of America, Citi and Wells Fargo \u2014 typically offer below-market rates,\u201d says John Blizzard, founder of CD Valet. \u201cIndependent banks and credit unions are where the value is.\u201d<\/p>\n<\/blockquote>\n

        2. Consider a CD ladder<\/h3>\n

        A CD ladder spreads your deposits across multiple terms (for example, 6-month, 1-year, and 2-year CDs).
        This strategy helps you:<\/p>\n