What To Do When Your CD Matures In A Falling Rate Environment

Certificates of deposit (CDs) have been a safe haven for savers over the past two years — offering some of the highest yields in two decades. But with the Federal Reserve now easing policy, those sky-high CD rates are starting to slip.

If your CD is about to mature, you’re likely wondering how to reinvest — or whether you should at all. Here’s what to do in a cooling rate environment.

The current CD rate landscape

In October 2025, the Fed cut rates for the third time this year, lowering the federal funds target range to 3.75%–4%, after an aggressive hiking cycle that brought rates above 5%. Banks and credit unions are responding quickly — average 1-year CD rates have dropped between 3%-4% in the past three months, according to Bankrate’s weekly CD rate data.

The so-called “CD maturity wave” — roughly $2.5 trillion in deposits set to mature over the next year — means many savers will soon face a less generous landscape.

“Banks are already seeing deposit flight as savers shop around for better yields,” says Joe Camberato, CEO of National Business Capital. “That competition may keep rates from collapsing immediately, but over the next six months, expect a clear downtrend.”

Where are CD rates headed?

Most experts agree that CD rates will continue to edge lower through 2026.

• Short-term outlook: Expect gradual declines; the largest drops often lag Fed moves by a few months.
• Long-term outlook: Average 12-month CD rates could slip below 3% by mid-2026 if inflation remains near the Fed’s 2% target.

“We’re in the early stages of the lower-rate cycle,” says Steven Conners, president of Conners Wealth Management. “Rates won’t fall off a cliff, but the best offers will steadily disappear.”

Are CDs still worth it?

Yes — but strategy matters more than ever.

CDs remain one of the safest investments available, FDIC-insured up to $250,000 per depositor, per institution (and NCUA-insured at credit unions). They guarantee predictable returns, which can help balance out riskier parts of a portfolio.

Still, with inflation cooling and rates dropping, you may want to diversify how you save:

“If rates fall below 3%, you might start exploring high-quality dividend stocks or bond ETFs to stay ahead of inflation,” Camberato says.

What to do when your CD matures

When a CD reaches maturity, your bank will typically roll it into a new term automatically — often at a much lower rate. Don’t let that happen without evaluating your options.

Here’s how to make your next move:

1. Shop around before renewal

Banks often rely on customer inertia. Check out the best online banks — smaller banks and credit unions frequently offer rates 10–20x higher than the national average.

“The four largest banks — JPMorgan Chase, Bank of America, Citi and Wells Fargo — typically offer below-market rates,” says John Blizzard, founder of CD Valet. “Independent banks and credit unions are where the value is.”

2. Consider a CD ladder

A CD ladder spreads your deposits across multiple terms (for example, 6-month, 1-year, and 2-year CDs).
This strategy helps you:

• Reinvest portions regularly to capture new, higher yields if rates rise again.
• Maintain some liquidity every few months.

If rates continue to drop, the longer CDs in your ladder will preserve higher returns.

3. Look for promotional or no-penalty CD

Some banks are still offering promotional CDs to attract deposits before rates fall further. These may include:

• Bonus APYs for new customers or larger deposits.
• No-penalty CDs that let you withdraw early without fees — offering flexibility if rates reverse.

→ Browse best no-penalty CD rates to keep some liquidity while earning a solid return.

4. Explore alternative options

If you’re hesitant to lock in a low yield, consider:

• High-yield savings accounts: Variable rates that adjust upward faster than CDs.
• Money market accounts: Offer check access and competitive yields.
• Treasury bills or Series I Bonds: For inflation protection with low risk.
• Short-term bond ETFs: Potentially higher returns, with mild market risk.

→ Compare CDs vs. savings accounts to decide which fits your goals.

Bottom line

Even in a falling-rate environment, you have strong options. CDs remain a safe and predictable way to earn on your savings — but you’ll need to be strategic:

• Lock in competitive rates now while they last.
• Diversify across CD terms and alternative accounts.
• Stay alert to Fed signals and rate moves.

The best savers act before rates drop — not after. Compare today’s highest CD rates and decide where your money will earn the most while staying safe.

Related reading