5 ways to maximize your CD returns this August, according to experts

CBS News

30-07-2025

While certificate of deposit (CD) rates have dropped slightly over the last year, today's rates are still attractive, especially compared to historical levels, with many banks offering yields above 4% across various terms. This has been a welcome shift for savers who endured much less appealing CD returns when interest rates were at historic lows.
But recent inflation spikes in May and June have introduced new uncertainty into the economic environment and left questions about the Federal Reserve's next moves. While current CD interest rates are compelling, any shifting economic conditions that occur could impact future yields from interest-bearing accounts as policymakers respond to the changing trends.
Given the ongoing economic uncertainties, strategy matters if you're looking to maximize your CD returns this August. And, financial experts say certain moves can help you squeeze the most value from today's CD market while positioning yourself to avoid costly missteps.
Compare your CD options and lock in a great rate today.
"If you can find a CD offering 5% or more, it's worth locking in [some] of your cash now," says Christopher L. Stroup, a certified financial planner and president of wealth management company Silicon Beach Financial.
Below are several expert-backed strategies to help you get the most out of your CDs this month.
Krisstin Petersmarck, an investment advisor representative at financial services firm New Horizon Retirement Solutions, encourages shopping online for the best CD rates.
"Often, online banks [give] better rates [than traditional ones] because they have no brick-and-mortar expenses," Petersmarck says.
Don't rely on one comparison website when hunting for CD account rates, though. Mark Sanchioni, senior vice president and chief banking officer at Ridgewood Savings Bank, recommends referencing several because not all sites will show every bank. Some comparison tools also miss special promotional rates that could enhance your earnings.
Beyond the headline rate, examine the details before committing your money. Sanchioni recommends checking reviews and understanding withdrawal limitations.
Find out how much you could earn with the right CD account now.
Right now, "we're favoring six to 12-month terms, which are long enough to lock in a strong yield, but short enough to preserve flexibility if rates drop or better opportunities [come up]," Stroup says.
But Petersmarck emphasizes that the ideal term length depends on your circumstances and how long you can have your money invested in a CD.
"Have an emergency fund, so you don't have to turn in the CD early to access the money," Petersmarck advises. For larger cash positions, Stroup advises spreading money across several CD terms to reduce risk while still capturing today's higher rates.
CD laddering involves spreading your money across more than one CD with different terms and maturity dates. This way, you're not locked into a single rate if conditions change.
Stroup offers a concrete example of splitting a $10,000 investment into three CDs:
When each CD matures, you can reinvest the funds into new CDs at current yields.
"The CD ladder concept allows you to always have one of your CDs a year or less from maturity, helping to mitigate your liquidity risk," Sanchioni explains. He recommends pairing your ladder with a savings or money market account for cash needs that can't wait for the next maturity date.
"Don't let your CD auto-renew," Stroup says.
When your CD automatically rolls over, you might miss out on better rates available elsewhere or even from your existing bank on new CDs.
"Instead, set a reminder [a month] before maturity [and] use that window to shop for new rates and compare terms."
If you're hesitant about locking your money away or think rates might climb higher, specialty CDs could be worth exploring:
Before choosing a CD, Sanchioni encourages clarifying the following:
Sanchioni also warns against waiting too long to use a bump-up feature.
"If you open a two-year bump-up CD [account] and wait 18 months to bump the rate, you only enjoy the higher rate for six months," Sanchioni says.
"Now is a good time to consider CDs as the rates are still attractive," Petersmarck says. Before committing funds, though, consult a trusted financial advisor. They can help you weigh CD options alongside your broader money goals and find the right strategy for your situation.