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While rates have dipped slightly over the past year, they're still elevated, with some financial institutions offering yields as high as 4.40%. However, could fall in the coming months if the Federal Reserve follows through on expected interest rate cuts this year. While the Fed doesn't directly set CD rates, these yields often loosely mirror Fed policy decisions.

As of May 27, 2025, the tool shows a 94.4% chance that the Federal Reserve will hold its target rate steady at 4.25% to 4.50%, and a 5.6% chance of a 0.25 percentage point cut. Still, the Fed has previously pointed to one or two rate cuts by the end of 2025. That suggests rate cuts later this year are more likely than in the near term. If true, savers have a limited window to lock in current high yields.

Knowing the direction CD rates are headed may help you make smarter decisions about when to open a CD and what to choose. Below, we'll dive deeper into the most likely scenarios for CD rates in June, based on expert analysis and opinion. 

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Here are three potential CD account interest rate scenarios that could occur this June, according to the experts we spoke to:

While most economists and rate-watchers don't anticipate the bank to cut the federal funds rate in June, it remains a distinct possibility. 

If that happens, CD rates could begin to decline shortly after, especially for short- and medium-term certificates, says Michael Crossley, vice president of Treasury Processing at America First Credit Union. "If the Fed were to cut rates at the June meeting, overall CD yields would start to decline," he said "When the Fed makes a rate cut, it decreases funding costs for banks and credit unions. This has a residual incentive to decrease higher yields on deposits," he adds.

Still, the timing of those changes won't be the same across all banks. "CD pricing doesn't always drop overnight," Crossley said. "There can be a lag in timing when the Fed adjusts their rate and when CD rates adjust."

Derik Farrar, head of Everyday Banking & Borrowing at U.S. Bank, expects banks to act fast if cuts do happen. "I expect most banks to adjust quickly, as the industry entered 2025 expecting rate cuts that haven't materialized," he said.

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This is the most likely scenario, especially since most analysts expect the Federal Reserve to pause rates at its June meeting.

Late last year, the Fed signaled that rate cuts were likely in 2025, before clarifying there would be . As of May 2025, the Fed has maintained its target rate at 4.25% to 4.50%, keeping rates paused at every meeting so far this year. At its May meeting, , "We're in the right place to wait and see how things evolve. We don't feel like we need to be in a hurry. We feel like it's appropriate to be patient."

As noted, most experts project continued economic uncertainty will lead to another rate pause in June. That likely means continued stagnation in CD rates. As Farrar explains, "Consensus expectations generally drive CD pricing because banks balance their maturities with new originations."

Crossley adds that CD rate movements are influenced by more than Federal Reserve monetary policy. "CD rates are not set arbitrarily. We monitor not only Federal Reserve policy, but also internal liquidity needs, loan growth, member behavior, competitive market and economic conditions. Right now, the cost of attracting deposits is high based on previous years comparison."

Even though the Fed's policy plays a big role, institutions may also stick with current yields unless their own deposit needs or other market conditions incentivize them to change their .

"Trying to guess changes in the interest rate market with any consistency is just as impossible as guessing short-term stock market returns," says David Shotwell, president of Shotwell Rutter Baer Financial Planners. "They will adjust to market forces which cannot be predicted."

A rise in CD rates this June is highly unlikely, and the CME FedWatch Tool gives a 0% chance of a rate hike at the next Federal Reserve meeting.

Still, there is a scenario where the Fed could bump up the interest rate. Farrar, who doesn't project an increase, points out that higher inflation could shift the Fed's stance. "Inflation or inflation expectations triggering a different outlook from the FOMC would be the driver for rates to rise in June," he said.

Crossley notes that banks could conceivably raise CD rates based on specific needs, such as unexpected deposit outflows, rising loan demand or balance sheet strategies. He adds that competition is always a factor. "In markets where institutions are aggressively competing for deposits, one or two may increase rates, in which others will follow suit," he says.

Understanding where CD rates may be headed can help guide your savings strategy, but that shouldn't be the only factor in your decision. It's just as important to consider the purpose of the money you're setting aside. As Shotwell explains, "We urge clients to not worry about the rate on CDs, but rather the role CDs play in their portfolio. Cash investments, which include money markets and certificates of deposit, are there for safety and liquidity rather than long term growth."

Shotwell recommends creating a to stagger maturity dates and keep your funds accessible over time. If you anticipate the Fed lowering rates in the coming months, opening a CD now could help you while it's still available.