CD rates can differ significantly among financial institutions, making it essential to find the best rate possible when exploring your options for a CD. Below is an overview of current CD rates and where to discover the most competitive offers.
Traditionally, long-term CDs provided higher interest rates compared to short-term ones. This was typically because banks aimed to attract depositors to keep their funds for extended periods. However, in the current economic situation, the trend has flipped.
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Currently, the highest CD rate is 4.40% APY, offered by NexBank on its 1-year CD, which requires a minimum opening deposit of $25,000.
Here’s a glance at some of the top CD rates currently available from our verified partners:
The interest you earn from a CD is determined by the annual percentage yield (APY). This reflects your total earnings after one year, accounting for the base interest rate and the frequency of interest compounding (CD interest typically compounds daily or monthly).
For example, if you invest $1,000 in a one-year CD with a 1.81% APY and interest compounds monthly, by the end of the year, your balance would increase to $1,018.25—your original $1,000 deposit plus $18.25 in interest.
In contrast, if you chose a one-year CD with a 4% APY, your balance would reach $1,040.74 over the same period, which includes $40.74 in interest.
The larger your deposit in a CD, the more you could potentially earn. Using the previous example of a one-year CD at 4% APY, if you deposit $10,000, your total balance at maturity would be $10,407.42, meaning you would earn $407.42 in interest.
Read more: What is a good CD rate?
When selecting a CD, the interest rate is often the primary consideration. However, the rate isn’t the only aspect to evaluate. There are several types of CDs that offer various benefits, although you might need to accept a slightly lower interest rate for added flexibility. Here’s an overview of some common types of CDs you might consider beyond traditional options:
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Bump-up CD: This CD allows you to request a higher interest rate if your bank increases rates during the CD’s term. Typically, you can only “bump up” your rate one time.
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No-penalty CD: Also known as a liquid CD, this type gives you the option to withdraw your funds before maturity without incurring a penalty.
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Jumbo CD: These CDs require a larger minimum deposit (often $100,000 or more) and frequently offer a higher interest rate in return. However, in the current CD rate landscape, the difference between traditional and jumbo CD rates may be minimal.
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Brokered CD: As suggested by its name, these CDs are acquired through a brokerage rather than directly from a bank. Brokered CDs may sometimes offer better rates or more flexible terms, but they also involve higher risk and may not be insured by the FDIC.
