CD rates change weekly, and what you earn depends on your bank, how long you lock your money away, and how much you deposit

There is no single "CD rate" — every bank sets its own rates, and they shift constantly based on what the Federal Reserve does and what banks need to attract deposits. A one-year CD at one bank might pay 4.50%, while the same term at another pays 3.75%. A five-year CD at the same bank might pay less than the one-year, or more — the pattern changes.

Right now, rates across the industry range from under 1% at some large national banks to over 5% at online banks and credit unions, depending on the term you choose. The longest terms (four to five years) often pay more than shorter ones, though this is not may provide. The shortest terms (three to six months) typically pay the least.

To find what you would actually earn, you need to check your own bank's website or call them directly. Rates posted online are current as of that moment but change without notice. If you see a rate you like, lock it in that day — waiting even a few days can mean a lower offer.

Key Takeaways

  • CD rates vary by bank, term length, and deposit amount, so comparing your own bank to others takes minutes but can mean hundreds of dollars in difference over the CD's life.
  • Online banks and credit unions typically pay higher rates than large national banks, but your money is held for a fixed time and cannot be withdrawn early without a penalty.
  • Rates change weekly or more often, so a rate you see today may be lower or higher by next week.
  • The relationship between short-term and long-term rates shifts over time — sometimes longer CDs pay more, sometimes shorter ones do.

How to find the actual rate your bank is offering

Log into your bank's website or mobile app and look for the savings or CD section. Most banks display current rates there. If you do not see them, call the customer service number on your debit card or statement. Have your deposit amount ready — some banks offer different rates depending on whether you deposit $500 or $50,000.

Write down the rate, the term (how long the money is locked), and the annual percentage yield (APY). The APY is what matters — it includes the interest rate plus any compounding, so it is the true number to compare across banks.

If your bank's rates feel low compared to what you see online, that is normal. Large national banks often pay less because they have many branches and high costs. Online banks with no physical locations can afford to pay more. Credit unions sometimes pay more to members, though they may have membership requirements or deposit limits.

Why rates are different at different banks

Banks do not all pay the same rate because they do not all need deposits the same way. A bank with plenty of customer deposits might lower its CD rates to save money. A bank that needs more deposits to lend out might raise rates to attract them. This is why rates shift constantly — banks are competing for your money.

The Federal Reserve also influences all CD rates. When the Fed raises its benchmark interest rate, banks tend to raise CD rates too. When the Fed cuts rates, CD rates usually fall. But banks do not move in lockstep — some respond faster than others, and some move by smaller amounts.

Your deposit amount can matter too. A $100,000 CD might pay 0.25% more than a $1,000 CD at the same bank, or it might pay the same. Call and ask before you commit.

The trade-off between term length and rate

A CD locks your money for a set time — three months, one year, five years, or something in between. The longer you lock it, the more risk the bank takes that interest rates will rise and you will not come back. To compensate, banks often pay more for longer terms.

But this pattern is not may provide. Sometimes short-term rates are higher than long-term rates, especially when the economy is uncertain. Sometimes they are all nearly the same. The only way to know what your bank is offering is to check their current rates for each term.

The longer you lock your money, the more you earn if rates stay the same or fall. But if rates rise sharply, you will wish you had chosen a shorter term so you could reinvest at the higher rate sooner. There is no perfect choice — it depends on what you think will happen and how much you need access to the money.

What happens when your CD matures

When the term ends, your bank will tell you the CD has matured. You then have a window — usually 7 to 10 days — to decide what to do. You can roll the money into a new CD at whatever rate the bank is offering then, move it to a savings account, or withdraw it. If you do nothing, most banks automatically roll it into a new CD at the current rate.

This matters because rates may have changed. If rates have fallen, your new CD will pay less. If rates have risen, it will pay more. You are not locked into the old rate — you get whatever the bank is offering when the CD matures.

Comparing rates across multiple banks

Checking one bank takes five minutes. Checking five banks takes 30 minutes and can show you a difference of 1% or more in annual yield. On a $10,000 CD, that difference is $100 per year.

Start with your current bank. Then check one online bank (Ally, Marcus, and Discover are common examples) and one credit union if you have access to one. Write down the APY for the same term at each place. The highest number is what you would earn if you moved your money there.

Do not assume online banks are always highest — rates shift, and sometimes a local credit union or a regional bank beats them. Do not assume your current bank is convenient enough to justify a lower rate — moving money between banks is routine and takes a few days.

Early withdrawal penalties and what they cost

If you need your money before the CD matures, the bank will charge a penalty. The penalty is usually a certain number of months of interest. A one-year CD might have a three-month penalty, meaning if you withdraw after six months, you lose three months of the interest you earned. A five-year CD might have a one-year penalty.

The penalty is real money. On a $10,000 CD paying 4.5% APY with a three-month penalty, withdrawing early costs you about $112.50. This is why CDs are best for money you know you will not need. If there is any chance you will need it, a high-yield savings account with no penalty is safer, even if it pays slightly less.

Before you open a CD, read the disclosure document or ask the bank directly: what is the early withdrawal penalty? Some banks state it as a number of months of interest; others state it as a percentage of the deposit. Make sure you understand it before you commit.

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 have never done business with them. You will need to provide your Social Security number and proof of identity, and the bank will verify your information. The money can be transferred from your current bank in a few business days.

What if rates go up after I open my CD?

You are locked into the rate you chose for the term you chose. If rates rise, you cannot change it. This is the trade-off of a CD — you get certainty about what you will earn, but you give up the ability to chase higher rates. When your CD matures, you can open a new one at the higher rate.

Can I put money into a CD gradually, or does it all have to go in at once?

Most banks require the full deposit upfront. You cannot add to a CD after you open it. If you want to invest more money, you open a separate CD. Some banks offer CD ladders (multiple CDs with different maturity dates) as a strategy to balance this, but you have to set them up all at once.

Is my money safe in a CD?

Yes, if the bank is insured by the Federal Deposit Insurance Corporation (FDIC) or the credit union is insured by the National Credit Union Administration (NCUA). These agencies protect up to $250,000 per depositor per bank. Check the bank's website or call to confirm they carry this insurance.

Why would I choose a CD over a savings account if the rates are similar?

A CD locks you in, which removes temptation to spend the money. It also sometimes pays more than a savings account, especially for longer terms. But if you might need the money, a savings account is more flexible. The choice depends on whether you are saving for something specific and distant, or building an emergency fund you might need sooner.