As the market awaits expected interest rate cuts from the Federal Reserve this year, at least one consumer finance company has gone in the opposite direction — raising rates on its one-year certificates of deposit. Last week, Sallie Mae boosted the annual percentage yield for its 12-month CD by 10 basis points, or 0.10% week over week, to 5.15%. That brings it in line with LendingClub and below Bread Financial ‘s 5.25% APY. “On its face, we’re surprised that a bank would raise interest rates, but delving further we think the raise is Sallie Mae specific as that company looks to transition to a greater mix of holding assets on balance sheet rather than selling loans,” BTIG analyst Vincent Caintic wrote in a note Friday. Meanwhile, Wells Fargo thinks the coming peak in student loan originations and higher-for-longer interest rates could also be playing a role in Sallie Mae’s rate bump. That increase led to a 0.01% increase in average week-over-week APY last week for the online banks that Wells Fargo has been tracking, excluding Bread and Citizens Access . Certificate of deposit rates have come a long way since the Fed started raising interest rates in March 2022. The average online bank APY has gone up by 4.14 percentage points to 4.79% since then, Wells Fargo analyst Michael Kaye said in a note Friday. The central bank has kept the fed funds rate between 5.25% to 5.50% since last July and is expected to start lowering rates sometime later this year. Since banks generally follow the fed funds rate, interest rates on CDs and savings accounts are expected to fall in turn. “Broadly we still expect online bank deposit rates to decline,” BTIG’s Caintic said. “Management commentary on public webcasts this week continue to cite expectations for decelerating spending and lending, implying less deposit demand and therefore less need to pay up for deposits.” While CDs offer attractive income, experts have cautioned about hoarding too much cash because of those expected declines. That said, investors may find higher CD APYs if they look at different periods. However, they should be aware of any potential issues with the lenders. For instance, New York Community Bancorp has the highest offering available with its seven-month CD, which offers a 5.5% APY, Morgan Stanley said in a June 4 note. The regional bank, however, has been facing some turmoil , which began in January when it said it anticipated greater-than-expected losses on commercial real estate loans. It then saw its stock drop and was downgraded by ratings agencies. In March, it struck a deal with investment firms to raise $1 billion . That said, all deposits are insured up to $250,000 at each bank covered by the Federal Deposit Insurance Corp., and that covers the interest due on CDs, too. Although Wall Street regards Sallie Mae as a consumer finance company, its CDs are insured by the FDIC, too. Other top APYs include Bank Ozk ‘s eight-month CD at 5.3%, BOK Financial ‘s 10-month CD at 5% and Bank of America ‘s 13-month CD, which has an APY of 4.75%, according to Morgan Stanley, which obtained rates either from the bank’s advertised rates online or by reaching out to a branch located in company’s state headquarters.