Is a $10,000 CD account worth opening this August? 3 reasons why it may be

Depositing $10,000 into a CD account before another round of rate cuts could be the smart move this August. Mike Kline/Notkalvin/Getty Images

Depositing money into a certificate of deposit (CD) account in recent years was an obvious choice. Not only were interest rates exponentially higher than they were at the start of the decade, but these accounts offered one of the few ways to grow and protect your money in an otherwise unpredictable economic environment. With inflation at its highest point in decades, some savers were able to lock in CD accounts with rates of 6% or 7%.

Now, however, things are different. Inflation is under 3%, down from the over 9% it was in the summer of 2022. And multiple rate cuts were issued in the final months of 2024 with additional ones expected for the end of 2025. Is a CD account worth opening this August, then? And what about those savers considering a five-figure deposit? For many, a $10,000 CD account can still be valuable, even if opened in the coming weeks. Below, we'll explain why.

Start by seeing how much more money you could be earning with a high-rate CD here.

3 reasons why a $10,000 CD account is worth opening this August

While a CD account may not be as advantageous as it once was, there are still some reasons why it could be worth opening this August, especially with a larger deposit. Here are three to consider now:

Interest rates are consistent

Interest rates on the top CD accounts are no longer above the 5% range they were consistently found in a few years ago … but they're not exactly hovering around the 1% they were in 2020, either. Right now, savers can locate CD accounts with rates in the 4% to 4.50% range with ease, no matter the CD term length. That's $4 in interest earned for every $100 deposited, which will accumulate relatively quickly with a $10,000 deposit. That said, higher rates are usually more readily available with online accounts versus lenders with physical locations, but if you take the time to shop around, the return you earn could be well worth the extra effort.

Get started with a high-rate CD account now.

There's no Fed meeting in the month to shake the rate climate

There's no Federal Reserve meeting to discuss monetary policy and interest rates in August. And while that may not be a benefit to borrowers, as any potential rate reductions will be delayed to September, it's a positive for savers as it gives them a bit more time to shop around to find a high-rate CD without having to worry about an unpredictable interest rate climate. Still, banks don't need to directly follow the Fed and if a September Fed rate cut becomes increasingly more likely, then they may start preemptively lowering the returns they offer on CD accounts as August comes to an end. So don't take too long to act, either.

This could be the final time to lock in a high rate before cuts are issued again

There's virtually no expectation that the Federal Reserve will reduce interest rates when its July meeting concludes this week (the CME Group's FedWatch tool has it listed at less than a 4% likelihood). But that changes significantly for September, with the chances of a rate cut then surging to more than 65%. And considering that the Fed cut rates by a larger-than-anticipated 50 basis points in its September 2024 meeting and the increased pressure to cut rates overall, this August could be the final time to lock in a high CD rate before cuts are issued again. Sure, CD rates aren't expected to plunge post-September, but if you can lock in a higher rate right now, why take the risk of securing a lower one this fall?

The bottom line

For many savers, the answer to whether a $10,000 CD account is still worth opening this August is a resounding "yes." With rates on these accounts still elevated, additional time to shop around without the pressure of pending Fed rate action and the reality of interest rate cuts being issued this September, this August could be the smart time to take action. Just be sure, if you do, to pick a CD term that works for you, as early withdrawal penalties on a $10,000 CD account could be costly.