Current CD rates vary by bank and term length, but most banks are paying between 4.5% and 5.5% annual percentage yield (APY) on certificates of deposit

The exact rate you see depends on three things: which bank you choose, how long you lock your money away, and whether you're opening an account online or in a physical branch. Online banks typically offer higher rates than brick-and-mortar banks because they have lower overhead costs. A one-year CD might pay 4.75% APY at one bank and 5.25% at another. A five-year CD at the same bank could pay less than the one-year rate—or more, depending on what the bank expects interest rates to do.

The rates you see advertised are may provide only at the moment you open the account. Once you lock in your rate, it stays the same for the entire term, whether rates go up or down. This is the trade-off: you get certainty, but you give up the ability to chase higher rates if they appear.

Key Takeaways

  • CD rates currently range from about 4.5% to 5.5% APY depending on the bank and the length of the term you choose.
  • Online banks almost always pay more than traditional banks because they spend less on branches and staff.
  • Shorter terms (three months to one year) often pay less than longer terms (three to five years), but this varies by bank and economic conditions.
  • Your rate is locked in the moment you open the account and does not change, even if rates rise or fall later.
  • You can compare rates across multiple banks in minutes using bank websites or rate-tracking sites, and switching banks costs nothing.

Where to find the highest rates right now

Online banks consistently offer the best rates because they do not maintain physical locations. Banks like Marcus, Ally, American Express Personal Savings, and Discover typically sit at the top of rate lists. You can see current rates by visiting each bank's website directly—most display their CD rates on the homepage or in a rates section.

Credit unions sometimes offer competitive rates, though not always. Your rate depends on whether you are a member and which credit union you use. If you belong to a credit union, call or visit their website to see what they are offering before you assume an online bank is better.

Traditional banks with physical branches—Chase, Bank of America, Wells Fargo, Citibank—almost always pay less than online banks. If you have an existing relationship with one of these banks and value the convenience of a local branch, the rate difference might be worth it to you. But if you are purely chasing yield, online banks are the faster route.

How term length affects what you earn

A CD's term is how long you agree to leave your money untouched. Common terms are three months, six months, one year, two years, three years, and five years. The longer the term, the more interest the bank pays you—usually. A five-year CD might pay 5.35% APY while a one-year CD at the same bank pays 4.85% APY. That extra 0.5% compounds over five years and adds real money to your account.

But this pattern does not always hold. Sometimes short-term rates are higher than long-term rates, which happens when banks expect interest rates to fall. In that case, a one-year CD might pay more than a three-year CD. Check the rates at your chosen bank before you decide on a term—do not assume longer always means higher.

The term you choose should match when you actually need the money. If you might need it in two years, a five-year CD locks you out and charges you a penalty if you withdraw early. Most banks charge a penalty equal to three to six months of interest. A two-year CD lets you access your money when you planned to, without the penalty risk.

The difference between advertised rates and what you actually get

The APY you see advertised is the annual percentage yield—the actual return you get after the bank compounds the interest. This is different from the interest rate itself, which does not account for compounding. You will always see APY advertised for CDs because federal law requires it, so you can compare apples to apples across banks.

The rate is may provide only if you fund the account within the window the bank specifies—usually a few days after you open it. If you delay funding, some banks will honor the rate you saw; others will give you the rate on the day you actually deposit the money. Ask the bank before you open the account if the rate is locked when you apply or when you fund it.

Interest is usually paid monthly or at maturity, depending on the bank. Some banks deposit interest into your CD account (so it compounds), while others deposit it into a linked savings account. This matters if you are trying to maximize compounding. Ask the bank where the interest goes before you open the account.

How to compare rates across multiple banks quickly

You do not need to visit ten bank websites one by one. Go to the bank's website directly and look for the rates page, or use a rate-tracking site that updates daily. Sites like Bankrate, DepositAccounts, and DepositRates pull rates from hundreds of banks and let you filter by term length and sort by highest rate. These sites do not charge you anything and do not take a cut of your interest.

When you find a rate you like, go directly to that bank's website to open the account. Do not open it through the rate-tracking site—open it on the bank's own website to make sure you get the rate you saw and to avoid any middleman confusion.

Write down the rates and terms you are comparing so you can see the total interest you will earn over the full term, not just the APY. A 5.25% APY on $10,000 for one year earns $525. The same $10,000 at 5.35% APY for one year earns $535—only $10 more. But over five years, the difference compounds and grows larger. Use the bank's CD calculator (most have one on their website) to see the actual dollar amount you will have at maturity.

Why rates change and what to expect next

CD rates follow the Federal Reserve's interest rate decisions. When the Fed raises its benchmark rate, banks raise CD rates. When the Fed cuts rates, banks cut CD rates. The Fed meets eight times a year to decide whether to raise, lower, or hold rates steady. You can see the Fed's schedule on the Federal Reserve's website.

If you lock in a CD rate and the Fed cuts rates next month, you win—your rate stays the same while new CDs pay less. If the Fed raises rates next month, you lose—you are stuck with your lower rate while new CDs pay more. This is the gamble you take when you choose a term. Longer terms are a bigger gamble because more time passes for rates to move against you.

No one can predict what the Fed will do. If you are unsure whether rates will rise or fall, a shorter-term CD lets you reinvest at a higher rate sooner if rates go up. A longer-term CD protects you if rates fall. There is no right answer—it depends on your comfort with uncertainty and when you need the money.

What to watch before you open a CD

Make sure the bank is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). This means your money is protected up to $250,000 if the bank fails. Almost all banks and credit unions carry this insurance, but confirm it before you open an account. You can search the FDIC's bank database or the NCUA's credit union database on their websites.

Check whether the bank charges a monthly fee. Most do not, but some charge a small fee if your balance drops below a minimum. If the fee is $5 a month and you are earning $40 a year in interest, the fee cuts your return in half. Read the account agreement or call the bank to confirm there are no hidden fees.

Confirm the early withdrawal penalty before you open the account. Most banks charge three to six months of interest if you withdraw before the term ends. Some charge a flat dollar amount instead. If you think there is any chance you might need the money early, ask about the penalty and factor it into your decision.

Frequently Asked Questions

Should I open a CD now or wait to see if rates go higher?

No one knows whether rates will go higher or lower. If you have money you will not need for the term length, locking in the current rate removes the uncertainty. If you wait and rates fall, you will wish you had opened the CD. If you wait and rates rise, you will wish you had waited. A middle ground is to open a shorter-term CD and plan to reinvest when it matures, giving you a chance to capture higher rates if they appear.

Is it better to open one long CD or multiple shorter CDs?

Multiple shorter CDs (called a CD ladder) let you reinvest portions of your money at different times, which can help you capture higher rates if they rise. One long CD is simpler and locks in a rate for longer. The choice depends on whether you want to actively manage your money or set it and forget it.

Can I move my CD to a different bank if rates go up?

Yes, but you will pay an early withdrawal penalty at your current bank. If the penalty is three months of interest and the new bank's rate is only 0.25% higher, you might not come out ahead. Calculate the penalty cost and compare it to what you would earn at the new bank before you move.

What happens when my CD matures?

The bank will tell you in advance (usually 30 days before maturity). You can withdraw the money, open a new CD at the current rate, or move it to a savings account. If you do nothing, some banks automatically renew your CD at the current rate; others move the money to a savings account. Check your account agreement or call the bank to confirm what happens automatically.

Are CD rates the same everywhere right now?

No. Rates vary significantly by bank and term. A one-year CD might pay 4.75% at one bank and 5.25% at another. The difference adds up over time, so comparing rates across at least three banks before you open an account is worth the five minutes it takes.