Bread Financial, once home to a 5.25% yield on 1-year CDs, has lowered its rates. The financial institution recently lowered the annual yield on 1-year CDs to 5.15%. While the deal remains attractive to savers who want to lock up some of their idle cash and earn substantial interest at the same time, other banks are expected to lower yields on these products — especially ahead of the Federal Reserve rate cut. “We believe banks will continue to slowly lower rates, especially as the industry becomes more confident that the Fed will cut rates this year,” BTIG analyst Vincent Caintic wrote in a report earlier this week. “We heard from one participant,” he added. The understanding there is that depositors are relatively insensitive to a cut in the 1-year certificate of deposit rate as long as interest rates remain around 5.00%, but going further below 5.00% would lead to significant deposit outflows,” federal funds futures trading showed, according to the CME FedWatch tool. There is a 100% chance that central bank policymakers will cut interest rates in September. However, for savers, CDs allow them to lock in the current higher interest rates for a set period of time. Banks can cut the yield on savings accounts at any time. See below for current APYs on select high-yield 1-year CDs. Some institutions still offer certificates of deposit at generous yields. Popular Direct’s 1-year CD has an annual interest rate of 5.2%, while Goldman Sachs’ Marcus and Sallie Mae instruments still have an annual interest rate of 5.15%. BMO Alto’s 1-year CD has an APR of 5.05%. Capital One and Citizens Access both have a 5% ratio.
