Shorter-term CD rates often yield less than the inflation rate, resulting in negative real returns.

CD rates have generally declined over time - the three-month CD remained above 5% annual percentage yield (APY) for most of the period between 19 but hasn’t regained that level since 2007.

CD rates peaked in the early 1980s as the Federal Reserve spiked the federal funds rate to quash inflation.

Shorter-term CDs are more sensitive to changes in the federal funds rate than longer-term CDs.

CD rates closely track the federal funds rate.

Our historical CD rate analysis uncovered six interesting trends that could change how you think about certificates of deposit - and where you choose to park extra cash you don’t need right away: Historical CD Rates in the United States: Key Findings To understand why, we combed through 55 years of CD rate data, then compared the changes we saw against economic events and interest rate movements happening at the same time. Since 1967, the average yield on the three-month CD - considered a key CD indicator because it’s so sensitive to prevailing interest rates - has ranged from a high of 18.5% in the early 1980s to a low just above zero for long stretches in the 2010s and early 2020s. That rate guarantee is important because CD rates can be volatile - really volatile. It’s insured by the federal government, it usually pays more than a standard savings account, and its yield (interest rate) is guaranteed for the entire term.

A certificate of deposit, or CD, is an excellent place to park cash you don’t need right away.

United bank 19 month cd rate