The Federal Reserve has already made three cuts to its rate-reduction phase, causing certificate of deposit (CD) yields to drift lower over the past few months. However, two large US banks, Marcus by Goldman Sachs and Synchrony Bank, have bucked this trend by raising their CD rates.
Marcus increased rates for seven CDs ranging from 9 months to 6 years, while Synchrony upped its 13-month APY. These rate bumps are welcome news, but there are still higher offers available at smaller banks and credit unions.
Thanks to the Fed’s historic rate-hike campaign in 2022-2023, CD rates surged to 20-year highs in late 2023, reaching as high as 5%. However, when inflation cooled in 2024, the Fed shifted to a cutting phase, lowering interest rates. The recent three rate cuts have led to lower savings and CD rates.
Today’s new rates from Marcus and Synchrony are particularly notable, especially for existing customers. At Marcus, rates were boosted by 10-15 basis points across seven different CD terms. In contrast, Synchrony Bank raised its 13-month CD APY from 4.25% to 4.35%.
Despite the larger banks’ rate increases, there are still better offers available at smaller institutions. CDs offer a “park it and forget it” nature, making them ideal for stashing cash elsewhere without much interaction required. Our daily rankings of the best nationwide CD rates feature over 15 nation-leading offers that pay more than today’s new rates from Marcus and Synchrony.
It’s worth noting that FDIC and NCUA insurance provide identical federal protection for deposits, regardless of the institution size. You can earn higher rates by shopping our daily rankings and considering smaller banks and credit unions.
Source: https://www.investopedia.com/instead-of-lowering-cd-rates-these-two-big-banks-just-raised-theirs-8776039