CD rates change weekly, and the best rate available to you depends on your bank, the CD term you choose, and whether you have a large deposit
Right now, the highest CD rates come from online banks and credit unions, not from the big national banks you see on the street. A one-year CD at an online bank might pay 4.5% to 5.3%, while the same term at a major national bank might pay 0.5% to 1.5%. The difference matters: on a $10,000 CD, that gap means hundreds of dollars in interest over a year.
Rates shift because the Federal Reserve sets the baseline interest rate, and banks adjust their CD rates in response. When the Fed raises rates, CD rates usually rise within days or weeks. When the Fed cuts rates, banks lower CD rates just as fast. This means the rate you see today may not be the rate you lock in tomorrow.
The term length you pick also changes the rate. A three-month CD pays less than a one-year CD, which pays less than a five-year CD—usually. Sometimes short-term rates are higher, depending on what the Fed is expected to do. You have to check the actual rates for the specific term you want.
Key Takeaways
- Online banks and credit unions typically offer 2 to 3 percentage points higher rates than national brick-and-mortar banks for the same CD term.
- CD rates change weekly or more often, so the rate posted today is not locked in until you actually open the account.
- The term length you choose (three months, one year, five years) directly affects the rate—longer terms usually pay more, but not always.
- Your deposit size, account history, and membership status can affect the rate you receive at some banks and credit unions.
Where to check rates right now
The fastest way to see current rates is to visit the websites of banks and credit unions directly. Online banks like Marcus, Ally, American Express Personal Savings, and Discover publish their CD rates on their home pages and update them daily. Credit unions use CO-OP and Allpoint networks to let members access rates at other credit unions, so if your credit union does not offer a competitive rate, you can often open a CD at another credit union in the network.
Financial comparison sites like Bankrate, DepositAccounts, and NerdWallet pull rates from hundreds of banks and let you filter by term length and deposit amount. These sites update multiple times per day, so the rates you see are usually current within a few hours. However, the rate shown on the comparison site is not binding—you still have to go to the bank's website or call to confirm the exact rate before you commit.
Your own bank may not be offering the best rate, but it is worth checking anyway. Some banks offer relationship discounts if you have a checking account with them, or loyalty rates if you have held accounts there for years. A slightly lower rate at a bank where your paycheck already lands might be worth the convenience.
How term length affects the rate you receive
Longer CD terms usually pay higher rates because the bank locks in your money for a longer period and can lend it out for longer. A five-year CD typically pays 0.5% to 1% more than a one-year CD at the same bank. However, this is not a rule—it depends on what the Fed is expected to do and what the bond market is pricing in.
When the Fed is expected to cut rates soon, banks sometimes pay more for short-term CDs because they want to lock in deposits before rates fall. When the Fed is expected to raise rates, banks pay more for long-term CDs because they want to lock in low rates before they have to pay more. You have to look at the actual rates for the terms you are considering, not assume the longest term always wins.
Some banks offer "CD ladders" or promotional rates on specific terms—for example, a special 18-month rate that is higher than the one-year or two-year rate. These promotions change monthly, so if you are flexible on term length, it is worth checking whether a non-standard term offers a better deal.
Deposit size and minimum requirements
Most banks require a minimum deposit to open a CD, usually between $500 and $2,500. Some online banks have no minimum at all. A few banks offer higher rates for larger deposits—for example, a standard rate for deposits under $100,000 and a higher rate for deposits of $100,000 or more. These tiered rates are less common than they used to be, but they still exist at some regional banks and credit unions.
If you have a large sum to deposit, it is worth asking whether the bank offers a higher rate for your deposit size. The difference might be small—0.1% to 0.25%—but on $100,000, that adds up to $100 to $250 per year. Call the bank directly or check their website for tiered rate schedules.
What happens when your CD matures
When your CD term ends, the bank will either automatically renew it at the current rate or move the money to a savings account, depending on the bank's policy. You have a grace period—usually 7 to 10 days—to decide what to do. If you do nothing, the bank will renew the CD at whatever rate they are offering at that time, which may be much lower than the rate you locked in.
To avoid being stuck in a low-rate renewal, set a calendar reminder for a week before your CD matures. At that point, check current rates and decide whether to renew at your bank, move the money to a higher-paying bank, or use the cash for something else. Some banks will match a competitor's rate if you ask, though this is not may provide.
Comparing rates across different CD terms
| CD Term | Typical Rate Range (Online Banks) | Typical Rate Range (National Banks) |
|---|---|---|
| 3-month | 4.0% to 5.0% | 0.3% to 0.8% |
| 1-year | 4.5% to 5.3% | 0.5% to 1.5% |
| 3-year | 4.0% to 5.0% | 0.4% to 1.2% |
| 5-year | 4.0% to 4.8% | 0.4% to 1.1% |
These ranges are approximate and change frequently. The rates shown reflect the general gap between online banks and national banks, but your actual rate depends on the specific bank, the current Fed policy, and market conditions. Always check the current rates directly before making a decision.
Notice that the one-year CD often pays the most at online banks, while three-year and five-year rates sometimes dip slightly. This happens because the Fed's future direction is uncertain, and banks adjust rates to match what they expect to happen. If you are deciding between terms, compare the actual rates available right now rather than assuming longer is always better.
Frequently Asked Questions
Do I have to use my own bank for a CD?
No. You can open a CD at any bank or credit union, even if you have never banked there before. Online banks do not require you to have a checking account with them. If you are a credit union member, you can often open a CD at another credit union in the CO-OP network without joining that credit union first.
What if rates go up after I lock in my CD?
You are locked into your rate for the full term. If rates rise, you cannot change the rate on an existing CD. This is the trade-off for locking in a may provide rate—you give up the chance to benefit if rates go higher. Some banks offer "bump-up" CDs that let you raise your rate once if rates go up, but these usually start at a slightly lower rate.
Can I withdraw money from a CD early?
Yes, but most banks charge an early withdrawal penalty, usually equal to a few months of interest. On a one-year CD paying 5%, the penalty might be three months of interest, which means you lose about $125 on a $10,000 CD. Some banks have no penalty for withdrawals after a short holding period (30 to 60 days). Check the bank's terms before you open the account if early access matters to you.
Are CD rates the same at every bank?
No. Online banks and credit unions pay significantly more than national banks. Even among online banks, rates vary by 0.3% to 0.5% depending on the bank's funding needs and strategy. Shopping around can mean the difference between 4.5% and 5.2% on the same one-year CD—a real difference in dollars earned.
How do I know if a rate is locked in?
The rate is locked in only after you have completed the account opening and the bank has confirmed the CD in writing or on your account dashboard. Rates shown on websites are current but not binding until you actually open the account. If you see a rate you like, open the account the same day, because rates can change overnight.