Right now, the best 6-month CDs are paying around 4.50% APY. That’s a pretty sweet deal if you want to lock in a solid return for the rest of the year.
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The thing is, a lot of economists think the Federal Reserve will cut rates once or twice before 2025 wraps up. Nobody knows exactly when or by how much. But if it happens, short-term CD rates will likely slide lower — and you might kick yourself for not locking something in now.
But CDs aren’t always the best fit for everyone. And other options exist that might be a better match for your savings goals.
Here are a few things to consider before locking in your cash.
Who should get a 6-month CD
A 6-month CD could be a total win if you’re in one of these camps:
- You have a set amount of cash you won’t need for six months. (Think: upcoming tuition payment, a 2026 house down payment, or a big trip at the end of the year.)
- You’re worried interest rates might fall soon. Locking in a solid APY now could beat future savings rates if rates get cut.
- You don’t want any market risk. CDs are FDIC insured up to $250,000 per depositor, per bank. There’s no risk of you losing money.
- You don’t mind giving up liquidity. Buying a CD means “locking up” your funds. While you can cash out early, it comes with a penalty.
My in-laws fit this criteria. They just purchased a 6-month CD for a chunk of cash they anticipate needing in early 2026. They’re happy earning a guaranteed return in the meantime, without stressing about market swings or rate drops.
Want to check out today’s top rates? Compare the best CDs for May 2025 and lock in a top-tier APY today.
Who should not get a 6-month CD
On the flip side, a 6-month CD might not be a fit if:
- You might need the money at any moment. I like to keep my emergency fund in a high-yield savings account. It makes me feel better knowing I can access my cash at the drop of a hat.
- You’re OK with a variable return. If interest rates drop, so will your earnings.
- You’re waiting for other potential opportunities. Keeping your cash liquid might be smart if you foresee other new investment opportunities popping up soon.
Breaking a CD early often comes with a fee that can erase all of your earnings. So if you can’t commit to a 6-month term, it’s better to store your cash elsewhere.
Other short-term options
If a CD feels too “locked up” for your style, here are a couple of great short-term cash alternatives.
High-yield savings accounts (HYSAs)
Top online banks are paying around 4.00% APY right now, which isn’t that far from current CD rates. You get daily access to your money and FDIC protection.
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Money market funds
Some money market mutual funds are yielding over 4.00% right now, with same-day liquidity. While these aren’t FDIC insured, they are proven stable short-term investments.
Both of these options let you earn solid returns without tying up your cash for months at a time and could be good alternatives to a short-term CD.
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