Right now, the best 6-month CDs are paying around 4.50% APY. That’s a pretty sweet deal if you want to lock in a solid return for the rest of the year.
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The thing is, a lot of economists think the Federal Reserve will cut rates once or twice before 2025 wraps up. Nobody knows exactly when or by how much. But if it happens, short-term CD rates will likely slide lower — and you might kick yourself for not locking something in now.
But CDs aren’t always the best fit for everyone. And other options exist that might be a better match for your savings goals.
Here are a few things to consider before locking in your cash.
A 6-month CD could be a total win if you’re in one of these camps:
My in-laws fit this criteria. They just purchased a 6-month CD for a chunk of cash they anticipate needing in early 2026. They’re happy earning a guaranteed return in the meantime, without stressing about market swings or rate drops.
Want to check out today’s top rates? Compare the best CDs for May 2025 and lock in a top-tier APY today.
On the flip side, a 6-month CD might not be a fit if:
Breaking a CD early often comes with a fee that can erase all of your earnings. So if you can’t commit to a 6-month term, it’s better to store your cash elsewhere.
If a CD feels too “locked up” for your style, here are a couple of great short-term cash alternatives.
Top online banks are paying around 4.00% APY right now, which isn’t that far from current CD rates. You get daily access to your money and FDIC protection.
Want easy access to your cash and a strong rate? Check out today’s top high-yield savings accounts — earn up to 4.40% APY.
Some money market mutual funds are yielding over 4.00% right now, with same-day liquidity. While these aren’t FDIC insured, they are proven stable short-term investments.
Both of these options let you earn solid returns without tying up your cash for months at a time and could be good alternatives to a short-term CD.
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Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of Motley Fool Money. Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc and Discover Financial Services. The Motley Fool has a disclosure policy.
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