Short-term CDs vs. long-term CDs: Which will be better after the September Fed rate cut?

Both short-term CDs and long-term CDs should be closely compared by savers now, ahead of an expected Fed rate cut. Rafael de Matos Carvalho/Rmcarvalho/Getty Images

The interest rate cut that's been looming for all of 2025 finally seems to be here.

With a cut to the federal funds rate almost a certainty, many experts are now wondering whether it will be by 25 basis points or via a larger, half a percentage point. Either way, however, a reduction will undoubtedly lead to lower returns for savers. And that makes opening a certificate of deposit (CD) account now a bit more difficult than it was in the high rate climate of recent years.

Still, it hasn't eliminated the benefits of CDs, either. Interest rates here are likely to remain competitive. Savers will just need to determine