CD rates vary by bank, term length, and market conditions — there is no single "today's rate"

A CD rate is what a specific bank or credit union pays you for locking money away for a set period. The rate you see at one institution may be higher or lower than the rate at another, even on the same day. Banks set their own rates based on what the Federal Reserve does, what competitors offer, and how much money they need to attract. This means you cannot shop for "the CD rate" — you shop for the best rate among the places where you actually want to keep your money.

The rates you see advertised online are usually higher than what your local branch offers, because online banks have lower overhead costs. A brick-and-mortar bank might offer 4.00% on a one-year CD, while an online bank offers 4.75% for the same term on the same day. Both rates are current; they are just different institutions.

Key Takeaways

  • CD rates change daily and differ between banks, so comparing rates across multiple institutions before you commit is the only way to find the best option for your money.
  • Online banks typically offer higher rates than traditional banks because they have lower operating costs and pass some of that savings to depositors.
  • The Federal Reserve's interest rate decisions influence the direction of CD rates across the market, but individual banks still set their own rates independently.
  • Shorter-term CDs (three months to one year) usually pay less than longer-term CDs (two to five years), though this relationship sometimes reverses when the economy is uncertain.
  • Rate-comparison websites show current rates from multiple banks, but you should verify the rate on the bank's own website before opening an account.

How to find current rates right now

The fastest way is to visit a rate-comparison site that updates multiple times per day. Bankrate, DepositAccounts, and CD Ladder all pull rates from dozens of banks and credit unions and show them sorted by term length and yield. These sites do not sell the CDs themselves — they are just showing you what banks are currently offering. You can see a one-year CD rate at Bank A, a two-year rate at Bank B, and a five-year rate at Bank C all in one view.

After you find a rate that interests you, go directly to that bank's website and confirm the rate is still the same. Rates can change within hours, especially during periods when the Federal Reserve is adjusting its own rates. Once you confirm, you can open the CD right there — most online banks let you do this in 10 to 15 minutes with your Social Security number, a government ID, and a funding source (usually a checking account at another bank).

If you prefer to work with a bank you already use, call your branch or log into your online account and ask what CD rates they currently offer. You will likely see lower rates than online competitors, but the convenience of working with a familiar institution may be worth the trade-off.

Why rates are different lengths and what that means for you

Banks offer CDs in many different terms: three months, six months, one year, two years, three years, five years, and sometimes longer. The longer you agree to lock your money away, the higher the rate usually is. A one-year CD might pay 4.50%, while a five-year CD at the same bank might pay 5.10%. The bank is paying you more because you are giving up access to your money for longer.

However, this relationship is not may provide. When the economy is in recession or when the Federal Reserve is expected to cut rates soon, shorter-term CDs sometimes pay more than longer-term ones. This is called an inverted yield curve, and it happens because banks expect rates to fall, so they do not want to lock in high rates for five years. In those periods, you might see a one-year CD at 5.25% and a five-year CD at 4.75% at the same institution.

The term you choose depends on when you will need the money and what you think rates will do. If you need the money in two years, a two-year CD locks in the current rate and protects you if rates fall. If you think rates will rise, a shorter term lets you reinvest at a higher rate sooner — but you also risk rates falling and having to reinvest at a lower rate.

What moves CD rates up and down

The Federal Reserve sets a target range for the federal funds rate, which is the interest rate banks charge each other for overnight loans. When the Fed raises this rate, banks raise CD rates to attract deposits. When the Fed cuts the rate, CD rates typically fall within days or weeks. You can watch the Fed's schedule on the Federal Reserve's website — they announce rate decisions eight times per year, and markets react immediately.

Between Fed decisions, rates also move based on what traders expect the Fed to do next. If inflation is rising, traders expect the Fed to raise rates, so banks raise CD rates in anticipation. If inflation is falling, traders expect rate cuts, so banks lower CD rates. This is why you might see rates shift even on days when the Fed does not meet.

Individual banks also adjust rates based on how much money they have and how much they need. A bank that just took in a large deposit might lower its CD rates because it has enough cash. A bank that needs more deposits might raise rates to attract them. This is why two banks can have very different rates on the same day.

The difference between advertised rates and what you actually get

The rate you see advertised is the annual percentage yield, or APY. This is the total return you will earn in one year if you hold the CD for its full term and do not withdraw early. If a CD has a 5.00% APY and you deposit $10,000 for one year, you will have $10,500 at maturity (before taxes). The APY already includes the effect of compounding, so you do not have to calculate it yourself.

Some banks also quote the annual percentage rate, or APR, which is slightly lower than the APY because it does not account for compounding. Always look for the APY, not the APR, when comparing CDs. The APY is what you will actually earn.

The rate is may provide only if you hold the CD until maturity. If you withdraw early, you will pay an early withdrawal penalty, which is usually a certain number of months of interest. A CD with a $10,000 balance and a 120-day penalty might cost you $50 to $100 to break early, depending on the rate. Always read the penalty terms before you open a CD.

How often rates change and when to check

Banks update their CD rates multiple times per day, especially during periods when the Federal Reserve is actively raising or lowering rates. If you are shopping for a CD, you might see different rates in the morning than in the afternoon. This is normal and reflects changes in what other banks are offering and what traders expect the Fed to do next.

The best time to check rates is right after a Federal Reserve announcement, because that is when the biggest moves happen. You can also set up rate alerts on comparison sites like Bankrate or DepositAccounts — they will email you when rates at your preferred banks hit a certain threshold. This helps you avoid constantly checking and missing the moment when rates are highest.

If you are trying to time the market — waiting for rates to peak before you lock in — remember that nobody knows exactly when that will happen. A rate that seems high may be higher next week, or it may be lower. Most financial advisors suggest locking in a rate you are comfortable with rather than waiting for a perfect moment that may never come.

Using rate ladders to manage CD maturity dates

A CD ladder is a strategy where you open multiple CDs with different maturity dates instead of putting all your money in one CD. For example, you might open five one-year CDs, each with $2,000, but stagger the start dates so one matures every few months. As each CD matures, you can reinvest it at whatever the current rate is.

This approach gives you flexibility without sacrificing much yield. Instead of locking all your money away for five years at a high rate, you get access to portions of your money regularly. If rates have fallen, you can reinvest at the new rate. If rates have risen, you can take advantage of the higher rate. The trade-off is that you will not always be earning the highest available rate, because some of your money will be in shorter-term CDs that pay less.

Rate-comparison sites like CD Ladder (the company) and Bankrate both have tools that show you what a ladder would look like with different term combinations and current rates. You can see the projected maturity schedule and total yield before you open any accounts.

Frequently Asked Questions

Do I have to open a CD with my current bank?

No. You can open a CD at any bank or credit union, even if you do not have a checking account there. Most online banks let you open a CD in minutes with just your Social Security number and a way to fund it (usually a transfer from another bank). You do not need an existing relationship.

What happens to my CD rate if the Federal Reserve cuts rates?

Your rate stays the same until the CD matures. The Fed's decision affects new CDs going forward, not ones you already own. If you lock in 5.00% and the Fed cuts rates next month, your 5.00% is still may provide until your CD matures. This is why locking in a good rate matters.

Are CD rates the same at credit unions and banks?

No. Credit unions often offer competitive rates, and some offer higher rates than banks on certain terms. You can compare credit union rates on the same comparison sites you use for banks. Credit union CDs are also insured by the NCUA (National Credit Union Administration) up to $250,000, just like bank CDs are insured by the FDIC.

Can I move money between CDs without a penalty?

No. Once your money is in a CD, it is locked in until maturity. If you withdraw early, you pay the early withdrawal penalty stated in the CD agreement. The only way to avoid this is to wait until the CD matures, then move the money to a different CD or account.

Should I open a CD if I think rates will go higher?

That depends on your timeline and risk tolerance. If you are certain rates will rise significantly, waiting might get you a better rate. But if you need the money to be safe and earning something, locking in the current rate removes the risk that rates fall instead. Most people prioritize having a may provide return over the possibility of a slightly higher return later.