High CD Rates Available as Fed Hikes Remain on the Horizon
As August ends with strong stock performance, savers have access to attractive certificate of deposit (CD) rates ahead of a potential Federal Reserve rate hike in September. The likelihood is around 65% that the central bank will raise its benchmark lending rate by 25 basis points at its Sept. 15-16 meeting. Fed Chairman Kevin Warsh expressed concerns about persistent inflation, noting recent data showed an annualized increase of 3.7%, well above the target of 2%. This environment is favorable for savers seeking higher yields on CDs. Several banks are offering competitive rates to attract deposits. Sallie Mae recently raised its one-year CD rate by five basis points to 4.2%, outpacing peers. Other institutions like Popular Direct and CIBC also offer strong APYs of up to 4.25%. Longer-term CDs, such as those from Synchrony Financial (16-month) or Marcus by Goldman Sachs (18-month), provide rates near 4.3%.
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Topics: certificates of deposit (CDs) Federal Reserve inflation interest rate hikes