There could be changes coming soon for CD rates, experts say.
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Inflation began to cool at the start of 2025, but that downward progress may have been short-lived. Over the last two months, there has been an uptick in the inflation rate. The latest Consumer Price Index data shows that inflation increased 2.7% in June 2025 compared to the year before. Given the Federal Reserve's hesitancy to lower rates while inflation is high, this uptick now puts into question when the agency might conduct further rate cuts, helping to alleviate costs for borrowers.
But while rates may be high on credit cards, loans and other borrowing products, the current interest rate environment is an asset to savers who want to earn more on their deposits. With the federal funds rate at a standstill, savers can maximize their returns thanks to higher interest rates on certificates of deposit (CDs) and other interest-bearing accounts. CD interest rates have largely remained steady in recent months, with some slipping slightly in anticipation of further rate cuts.
Now that inflation is picking back up again, though, what does that mean for CD rates? We spoke to several experts about the CD interest rate forecast for August and what savers should consider before choosing an account.
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Will CD rates rise or fall this August? Experts share their predictionsAfter the rate-cutting campaign at the end of 2024, the Federal Reserve seemed poised to make additional cuts in 2025. But the Federal Reserve held steady at its latest meeting in July and kept the federal funds rate unchanged for the fifth consecutive time. This matters because the federal funds rate affects interest rates on both borrowing and saving products.
When the Fed cuts rates or increases them, interest rates generally follow. As a result, the experts we spoke to say that CD account interest rates in August are likely staying the same, at least in large part.
"I expect CD rates to remain relatively stable through the rest of the summer and into the fall," says Christopher Jackson, certified financial planner at CPJ Financial.
However, that's not necessarily true across the board. Though the timeline keeps shifting, rate cuts are still expected later this year, despite the overwhelming uncertainty. While there is no guarantee of a rate cut at the next Fed meeting, slated to be held in September, data from the CME Group's FedWatch Tool shows a higher probability of a rate cut then. Currently, the probability is clocking in over 80%.
In turn, some banks are already making changes to the rates they're offering on CD accounts.
"CD rates have been coming down in expectation of rate cuts…There seems to be some small declines in CD rates for August," says Dr. Lakshmi Balasubramanyan, associate professor of banking and finance at Case Western Reserve University.
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Do short- or long-term CDs offer higher rates this August?Historically, savers could secure the highest CD rates by opening longer-term CD accounts. However, that's not the case currently, as short-term CDs are offering the most competitive rates overall. Given the uncertainty right now and the potential for rate cuts in the future, banks feel more confident offering higher rates on short-term CDs.
"Banks don't want to lock themselves into higher rates and have to pay their customers, say 4% when rates may go down and the CD product rates for long term might go down to say 3.5%," says Balasubramanyan.
Krisstin Petersmarck, a retirement income certified professional and president and founder of New Horizon Retirement Solution, suggests considering shorter-term CDs of a year or less.
"They're a good investment for the short term…It's a good mix to any portfolio to create diversification and to avoid any volatility that could be found in the stock market," says Petersmarck.
Jackson agrees that shorter-term CDs may be a better option in the current environment, but high-yield savings accounts and no-penalty CDs could be worth considering, too.
"I would much rather use a high-yield savings account because I would want to keep the money liquid over the long term, or you can make it a no-penalty CD," says Jackson.
A no-penalty CD can help you avoid some of the downsides of traditional CDs, like paying hefty penalties for withdrawing your money early. However, you likely won't get the same competitive rates with this option.
Pamela Sams, chartered retirement planning counselor and financial advisor at Jackson Sams Wealth Strategies, offers a different perspective.
"The longer CDs are going to lock in today's rates for years to come. So if you think rates are going to drop, it will be best to get a longer term so you can lock in those rates…but on the other side of that fence, you're probably getting just as much in a high-yield savings [account] these days," says Sams.
There's a major difference to consider between high-yield savings accounts and CDs, though. CD interest rates are fixed for the duration of your term, meaning the rate won't change until your CD matures. The interest rates on high-yield savings accounts are variable and therefore prone to fluctuations.
"With higher savings [rates], that can change pretty much on a dime," adds Sams.
The bottom lineThe current CD rate prediction for August is that rates are likely to hold steady as the Fed maintains the federal funds rate. However, with potential rate cuts down the line, CD account interest rates may start to drop soon, so if you want to take advantage of the highest rates, now might be a good time to do so.
"Don't make the assumption that your bank that you have your checking and savings account at is going to have the best rates that are available. Do your research," says Petersmarck.
Before locking up your money, you should also make sure to have other liquid funds, such as an emergency fund held in a high-yield savings account. Research various CD rates, terms, and review early withdrawal penalties as well.