Certificates of deposit (CD) offer a predictable return on investment, making them a popular choice in terms of interest-bearing accounts. Unlike high-yield savings accounts with their variable rates, your rate is guaranteed for the duration of the CD term. The upside is you’ll receive consistent gains until your CD matures, regardless of fluctuations in market rates — but the downside is that you’ll owe early withdrawal penalties if you take your funds out of the account before it matures.

Part of the recent draw has been that the Federal Reserve raised interest rates to combat inflation in the post-pandemic era, and CD rates soared in tandem, prompting a surge of interest in this FDIC-insured investment that was suddenly paying upwards of 5.00%. Now, however, with inflation cooling, the Fed slashing rates and CD yields on the decline, many investors are wondering if CDs are still worth it in 2025.

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Will CDs still be worth opening in 2025? Here’s what experts believe.

Here’s what you need to know about whether CD accounts will be worth considering in the new year.

CDs are still a good investment under certain conditions

While CDs may lose some of their luster as rates fall from recent record highs and return to historic norms, these conservative investments will likely still have a place in your portfolio in the right circumstances — like when you need to keep money accessible and can’t afford to take on much risk. 

“CDs have been used as a large part of conservative portfolios during recent years to help build money for future needs,” says Domenick D’Andrea, co-founder of DanDarah Wealth Management. “CDs are still a great place to utilize for short to intermediate funds.”

Chad Gammon, CFP® and owner at Custom Fit Financial agrees but believes it may take a little effort to find the best fit. 

“I believe CDs will still be a worthwhile investment in 2025 for those seeking low-risk options, though consumers may need to shop around more for special offers,” he says. “While interest rates may drop further, the rates will still likely be more favorable than rates seen five to 10 years ago.”

With the potential for multiple rate cuts throughout 2025 and into 2026, CDs are not only a safe choice, but they also offer the benefit of being able to lock in at today’s rates before yields fall further. 

“I typically tell clients that if you find a rate you’re comfortable with and that satisfies your needs, lock it in,” says Jeff DeLarme, CFA, CFP President at DeLarme Wealth Management. 

D’Andrea does caution that you’re likely to be looking at a lower-rate environment when you renew any CDs you buy in 2025, so you’ll need a plan for what will happen when they mature. Still, if you’re likely to be using the money within five years or less, this may not be a concern as you can choose a certificate that matures when you need the funds. 

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Other investments may be a better fit

While CDs have some advantages that make them worthwhile for some investors, others will find that they are no longer the right choice as the market changes in 2025. 

“Investors looking for low-risk options can look towards other alternatives such as money market accounts, Treasury bills, or I Bonds as well,” says Gammon.  

DeLarme agrees there may be better options out there than the CDs likely to be on offer next year. 

“I caution savers with non-retirement account dollars to evaluate rates net of tax as some short-term investment vehicles may provide tax-exempt income and may therefore be more beneficial than an otherwise fully taxable CD,” he says.

Because renewing a CD at a competitive rate is likely to become a problem, D’Andrea also advises doing something else with money you won’t need for a while. 

“You might need to reallocate those dollars for longer-term needs,” he says. “If you are looking to help stay ahead of inflation, CDs may no longer be the best option going forward. There are numerous other conservative investment options that can help meet your financial needs.”

The bottom line

Ultimately, you’ll need to consider both your risk tolerance and investing timeline. If you believe rates are likely to fall, want to lock in at a competitive rate for a few months to a few years, and are willing to shop around to find the best CD offers, you’ll likely still find some great certificates of deposit that can be a good fit within your diversified portfolio.