Borrowers hoping for some imminent relief were disappointed this week after the latest report from the Bureau of Labor Statistics showed inflation higher than expected in January. While that 3.1% rate was lower than December’s 3.4%, it’s still holding steady and significantly higher than the Federal Reserve’s target 2% goal. Higher inflation means elevated interest rates and, with inflation inconsistent, rates will stay put, meaning continued pain for those looking for mortgages, credit cards and other credit products.

However, there has been one major benefit of today’s rate climate: higher rates on savings accounts. For much of the last year, it’s been a great time to open a certificate of deposit (CD) account. That said, to get the most from one of these accounts now, it behooves savers to understand some key components of today’s CD rate environment. Below, we’ll detail four of these considerations.

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4 things to know about CD rates today

Here are four important things about today’s unique CD rate climate.

Rates are high

CD rates today are high. How high, exactly, will depend on the amount you deposit, the term of your account and the lender you choose. But it’s not difficult to find a CD with a rate of 6% or higher right now. Some savers may even qualify for an account with a 7% interest rate. 

That’s a significant amount of interest that can be earned simply by transferring funds from one account type to another — resulting in hundreds of extra dollars earned each year. Compared to the minimal 0.47% that can be obtained with a regular savings account, it’s clear that you’re losing money by not moving some of your funds into a top CD now.

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Rates will stay elevated a bit longer

The forecast for CD rates toward the end of 2023 was unclear, with many hoping for a cut to the benchmark interest rate as soon as March. And while that cut may still come this year, it’s unlikely to be next month after this week’s disappointing inflation report. 

As a result, rates on CDs will likely stay elevated a bit longer. This gives savers more time to explore their options, ideally locating a CD with the best mix of rates and minimal (or no fees). But remember that the longer you wait, the more time will pass without earning today’s high CD rates, so it’s smart to move relatively quickly.

Short-term CD rates are a bit better than long-term ones

In a reversal from historic trends, the best CD rates right now are being offered on short-term CDs (12 months or less) versus long-term ones. While long-term CDs generally reward savers with more money in exchange for locking their money away for an extended period, that’s not the case right now. 

The volatile rate environment has instead left short-term CDs with elevated rates and long-term CDs with rates slightly lower. While both are high compared to recent years, the very best CD rates right now will generally be found with short-term accounts so keep that in mind as you hunt for the best account.

The long-term forecast is unclear

As mentioned, there was much discussion about the future of CD rates toward the end of last year as inflation finally seemed under control and rate cuts looked imminent. But that forecast is murkier now following two consecutive disappointing inflation reports. 

And while the Fed hasn’t increased rates since last July, they haven’t cut them either. This is good news for CD account holders who can still earn a nice return right now — and are unlikely to see a dramatic rate cut affect their earnings long-term either.

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The bottom line

in today’s unique rate environment, savers need to be a bit more diligent about where they store their money. CDs are one great option, thanks to significantly higher rates. And those rates are expected to stay high for at least a few more months. But rates on short-term CDs are generally better than long-term ones right now, something savers should keep in mind as they search for the best account. They should also know that the long-term CD rate forecast is unclear, meaning that now could be an opportune time to take advantage and start earning more interest.