CD Valet’s August 2025 Ratewatcher Report reveals that most certificate of deposit (CD) yields moved lower in August, ahead of a potential interest rate cut by the Federal Reserve later this month.
Key Takeaways from August CD Rate Trends
- 74% of CD rate changes were decreases between August 1–31, 2025.
- Only 26% of changes were increases, continuing the slowdown in CD rate hikes (36% in July, 42% in June).
- 12-month CDs remain the most competitive term, with the highest share of increases (26%) and the largest average bump in yield (56 basis points).
- The yield curve remains inverted, signaling expectations for declining rates in fall 2025.
- Credit unions led rate increases: 66% of increases came from credit unions, while banks made up 34%.
- On average, credit union CD rates were 17% higher than bank CD rates.
Explore the best CD rates today with CD Valet’s marketplace of over 35,000 nationally available CDs from 4,500+ banks and credit unions.
Why Rates Fell in August
The Federal Open Market Committee (FOMC) meets September 16–17, and many analysts expect a potential Fed rate cut. Financial institutions appear to be pricing in that shift, which explains the widespread decline in August CD yields.
Despite the trend, many banks and credit unions continue to lean on 12-month CDs as a way to attract deposits — a strategy that resonates with savers seeking solid returns while avoiding locking up funds for multiple years.
What This Means for Savers and Financial Institutions
“As anticipation for a potential upcoming rate cut intensifies, many savvy savers are deciding to lock in CDs now to secure attractive rates. The financial institutions that aren’t optimizing their CD strategy – including thoughtful pricing and visibility – risk missing out on attracting deposits and building customer relationships,” said Mary Grace Roske, Head of Marketing & Communications at CD Valet. “The banks and credit unions that want to stand out are doing their research to understand both saver appetite and how peers are pricing and promoting their deposit products.”
For consumers, this means:
- If you’re considering a CD, now may be the time to act before rates drop further.
- 12-month CDs currently offer some of the strongest yield increases.
- Credit unions may offer higher yields compared to banks — worth comparing before committing.
For financial institutions, it signals the importance of:
- Maintaining competitive pricing to attract deposits.
- Monitoring saver behavior to anticipate shifts in demand.
- Leveraging platforms like CD Valet to gain visibility with deposit-seekers nationwide.
About the Ratewatcher Report
Each month, CD Valet analyzes its digital marketplace of over 35,000 retail CD rates to uncover industry patterns and consumer opportunities. The Ratewatcher Report highlights these findings to help savers and financial institutions make smarter decisions in a changing rate environment.
Read last month’s July Ratewatcher Report to compare how trends have shifted.
