The Federal Reserve is meeting next week, and while no immediate rate change is expected, there's a bigger question on the horizon: What comes next?

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If the Fed starts preparing markets for rate cuts later this year, it could mean that CD rates will fall as well. CD rates have been relatively high for the last few years, but that won't last forever. In fact, they could start dropping soon.

Here's why you may want to get ahead of a possible rate cut by locking in your CD rate now.

Why the Fed's meeting matters

As of now, futures traders see a 99% chance that the Fed will keep rates unchanged at its June 17-18 meeting, per the CME FedWatch Tool.

But that doesn't mean cuts definitely aren't on the horizon. If Fed officials mention planned rate cuts for later this year, banks could react by trimming their CD rates in advance.

In fact, some have already started -- which is why now may be the time to act.

CD rates are still high -- for now

CD rates are closely tied to the Fed's benchmark rate. As that rate rises or falls, CD yields tend to follow. And right now, top CD rates are still near multiyear highs, with APYs as high as 4.60%.

Once you open your CD, your return is locked in for the duration of the term, which is the main advantage of a CD. That's why you'll want to lock in a high CD rate while you still can.

CD basics: How they work and how to open one

Put simply, a certificate of deposit (CD) is a type of savings account that locks in your money for a set period, usually anywhere from a few months to a few years, in exchange for a fixed interest rate.

You can open one in just a few simple steps:

1. Choose a term. Common terms range from 6 months to 5 years. Pick one based on when you'll need the money.
2. Compare rates. Shop around for the best APYs. Online banks often offer higher rates than traditional banks.
3. Fund your CD. Most banks let you open a CD via bank transfer or check. Minimum deposits vary by institution.
4. Make a plan for the maturity date. Once your CD matures, you can "renew" it by opening a CD with the same term (and a potentially different rate) or transfer the cash to a different account.

One popular strategy involves building a CD "ladder" -- splitting your money across different term lengths. This creates staggered maturity dates, so a portion of your money becomes available at regular intervals to provide flexibility.

You'll also want to avoid early withdrawals, which usually come with penalties that can reduce your overall return. Discipline is key.

Don't wait for rates to fall

There's a chance CD rates hold steady through the summer. But if you wait too long, you could miss your chance to lock in a high yield. Some banks are already reducing CD offers based on what they expect the Fed to do.

And while alternatives like high-yield savings accounts offer competitive returns, their rates are variable. If you're sitting on extra cash you don't need right away, putting it in a fixed-rate CD now could give you peace of mind.

Want to lock in a great rate while you still can? Compare top CDs and open one today.

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