Savers looking for an easy way to grow their money have had multiple ways to do so in recent years, particularly if they opted to open a certificate of deposit (CD) account. CD rates have surged as inflation rose, with rates as high as 6% on select accounts and terms right now. But with the inflation rate dropping significantly from a multiple decades-high in June 2022, the interest rate climate could soon be changing. And, when it does, rates on savings vehicles like CDs and high-yield savings accounts will fall, too.

Understanding this reality, then, savers should strongly consider locking in a high CD interest rate now, while it’s still easy to do so. But the timing here is important to get right and savers will need to be proactive to avoid low-rate offers. That noted, below we’ve listed three important dates that could affect the rate landscape – emphasizing the urgency of opening a CD account now.

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3 upcoming dates that could affect CD interest rates

Want to lock in the highest CD rate available now? Then consider acting before these upcoming dates.

July 31, 2024

The next Federal Reserve meeting is set for July 30 to July 31. And, when it concludes on Wednesday, the Fed will announce its plans for the federal funds rate. Already stuck at its highest point in 23 years, any reduction in the rate will affect what lenders offer on CDs. But a formal cut doesn’t need to necessarily occur for lenders to start reducing their rates. Even a hint at a cut to come later in the year could result in lower offers. So don’t wait for that to happen. Lock in a high rate now and keep it long-term, even when rates do eventually fall.

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August 14, 2024

The last three reports for April, May and June showed a steadily declining inflation rate. If the July report released by the Bureau of Labor Statistics on August 14 shows the rate dropping again – even closer to the Federal Reserve’s target 2% goal – then the overall rate climate could cool as a result. And CD rates won’t be immune from that drop. And if the Fed already hinted at a rate cut to come in their July meeting, rates will already be hovering near a lower point than they were in mid-July.

September 18, 2024

Speculation over a cut to the federal funds rate could finally turn into a reality in September. The CME FedWatch tool currently projects a rate cut from the current range of 5.25% to 5.50% to one between 5.00% to 5.25% at around a 90% likelihood. And that projection is now, before any further reductions in the inflation rate are possibly reported. While hints at a rate cut can result in lower rates on CDs, an official cut will essentially guarantee lower returns on these sort of accounts. So it’s critical for those looking for a high CD interest rate to act before September.

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The bottom line

Reductions to the federal funds rate and, thus, rates on CD accounts will likely start at a moderate pace but can potentially increase in frequency as the months and years pass. Savers should understand this real possibility, and look to lock in a high CD rate now while they still can. Considering that rates on these accounts were just around 1% in 2020 and 2021, now marks an opportune time to act before rates fall and interest-earning opportunities dwindle. Just make sure to only deposit an amount of money that you feel comfortable parting with for the full CD term or you could get stuck paying an early withdrawal penalty to regain access to your funds.