Why You Can Trust Our Expert Recommendations for the Best CD Rates

Investopedia launched in 1999 and has been helping readers find the best CD rates since 2019. To do this, we collect thousands of CD rates from hundreds of banks and 澳洲幸运5官方开奖结果体彩网:credit unions every weekday. We then 澳洲幸运5官方开奖结果体彩网:rank the best CDs according to APYs, with the top certificates certificates typically pa♚ying three to five times as much as the national average—or even more. We then also provide details on factors like CD term, early withdrawal penalty, and minimum opening deposit.

To qualify for our rankings, a CD must be available nationwide and its minimum opening deposit requirement cannot exceed $25,000. It must also be offered by an FDIC-insured bank or NCUA𝔍-insured credit union, which protects up to $250,000 in deposits per person and per institution).

What Is a CD Rate?

A CD rate is an interest rate that shows what a bank or credit union will pay you for depositing your money with them for a certain time in a 澳洲幸运5官方开奖结果体彩网:certificate of deposit (CD). For example, if the rate is 4.50% for a 1-year CD, the bank or credit union will pay you 4.50% in interest on your money for keeping it in the account, untouched, for 12 months. If you deposit $1,000 in that account and keep it there for 12 months, you will earn $45 at the end of the term.

Note that the interest rate and the 澳洲幸运5官方开奖结果体彩网:APY offered on a CD are slightly different. An interest rate is the raw rate you earn on your money, while the annual percentage yield (APY) is the full amount of interest earned after 澳洲幸运5官方开奖结果体彩网:compounding at the end of one year. APYs are therefore usually higher than the interest rate. For example, an interest rate on a 3-month CD could💧 be 4.41% while the APY on that same CD is 4.50%.

How Does a CD Work?

A certificate of deposit (CD) is similar to a bank deposit account. The difference is what you're agreeing to when you sign on the dotted line (even if that signature is now digital).

A CD works by locking your deposit up for a set time. When time is up, the CD pays you the set interest rate you agreed to when you opened it. A CD locks you into four specific things:

• The interest rate: Most CDs pay a fixed interest rate. The bank cannot later change the rate and therefore reduce your earnings. On the flip side, a fixed interest rate may hurt you if rates later rise and you've lost your opportunity to take advantage of higher-paying CDs.
• The term: This is the length of time you agree to leave your money deposited to avoid any penalty (such as six months or 1 year, etc.) The term ends on the "maturity date," when you can withdraw your money penalty-free.
• The principal: Except for some specialty CDs that allow add-on deposits, this is the amount you agree to deposit into the CD, at the time of opening.
• The institution: The bank or credit union where you open your CD will determine aspects of the agreement, such as early withdrawal penalties and whether your CD will be automatically reinvested if you don’t provide other instructions at the time of maturity. Credit unions may also require you to open a high-yield savings account or money market account before you open a CD.

Once your CD is established and funded, the bank or credit union will set the terms and conditions, just as it does with other deposit accounts. You'll have either monthly or quarterly statement periods, paper or electronic statements, and usually monthly or quarterly interest payments deposited to your CD balance, where the interest will compound. The money you put into a CD is insured like other deposit accounts—up to $250,000 per customer, per institution.

How Much Does $10,000 Earn in a CD in One Year?

If you invest $10,000 in a CD for one year, you could earn at least a few hundred dollars, depending on the interest rate. For example, with an APY of 4.55%, you'd get $455 in interest after one year. CD rates can change, so locking in a high interest rate today could guarantee you the maximum earnings, especially if CD rates drop by next year.

There are a few scenarios you may encounter or need to decide between when it comes to investing $10,000 in a CD. It'll depend on the rate and CD term you choose. Here are a few scenarios:

Who Should Get a CD?

If you're looking to save money for a certain amount of time and want to make sure you don't touch it until you need it, you should get a CD. If you're 澳洲幸运5官方开奖结果体彩网:risk-averse and don't want to invest money in the stock market because there's no guarantee you'll see a return, that'🅺s another reason to consider a CD. CDs offer a fixed rate of return that guarantees your earnings when the term is over. And right now, CD rates are high💫—over 4% in many cases—so you can earn a solid return on your deposit.

CDs Can Help You Beat Inflation

In March 2025, 澳洲幸运5官方开奖结果体彩网:inflation was 2.4%, while the top APY offered across all CDs was 5.00%. CD rates reached historic highs in 2023 as a result of the Fed's rate-hike policy to cool inflation, which had reached 9.1% in June 2022. CDs can help you combat inflation by paying you interest on your money, even though you may be paying more for goods and services. This will not always be the case, though. Interest rates are often increased to help combat high inflation. With inflation trending toward the standard 2% mark the Fed aims for each year, the federal funds rate was reduced in September for the first time in four years, then again in both November and December. CD rates have subsequently begun to decline.

Right now, the best CD rates are still over 4.50%, which is much higher than what CD rates were just a few years ago. Buying a CD now is a good idea since you'll be able to earn a higher interest rate than you might be able to earn in a year from now. Right now, you're guaranteed a high interest rate, even if the Fed decides to lower rates during the term of your CD. Waiting to buy a CD could mean earning a lower interest rate on a CD and losing out on higher guaranteed earnings. So if you are debating whether to buy a CD or not, don't wait.

Types of CDs

• Regular CDs: A regular CD is a 澳洲幸运5官方开奖结果体彩网:CD with a fixed interest rate for a set period. Brick-and-mortar traditional banks, as well as online institutions and credit unions, offer these kinds of CDs. They may also be called traditional CDs.
• Variable-rate CDs: A 澳洲幸运5官方开奖结果体彩网:variable-rate CD is one where the interest rate can change based on the 澳洲幸运5官方开奖结果体彩网:prime rate, the 澳洲幸运5官方开奖结果体彩网:Consumer Price Index (CPI), 澳洲幸运5官方开奖结果体彩网:Treasury bills, or a 澳洲幸运5官方开奖结果体彩网:market index. The entire term for a variable-rate CD is still fixed, though, and does not change. These are sometimes called "flex" CDs.
• Jumbo CDs: A jumbo CD is a CD that requires a larger opening deposit, such as $50,000 or $100,000.
• No-penalty CDs: A 澳洲幸运5官方开奖结果体彩网:no-penalty CD is exactly what it sounds like—you do not pay a fee for withdrawing your money early.
• Brokered CDs: A 澳洲幸运5官方开奖结果体彩网:brokered CD is one that an investor can buy through a brokerage firm or from a sales representative other than a bank or credit union.
• Step-up CDs: A step-up CD allows you to increase your interest rate when you can. Your rate is not fixed for the entire term; you can capitalize on higher interest rates with a 澳洲幸运5官方开奖结果体彩网:step-up CD. A step-up CD may also be called a 澳洲幸运5官方开奖结果体彩网:bump-up CD.
• Promotional-rate CDs: This 澳洲幸运5官方开奖结果体彩网:CD offers a promotional rate that may be higher than a regular CD rate and is only offered for a certain time period. You may be able to lock in a high rate by opening this kind of CD within a promotional period, like 30 days or before the end of the month.
  

Pros and Cons of CDs

Pros

• Guaranteed yield for the CD's full term: Most CDs are a 澳洲幸运5官方开奖结果体彩网:fixed-rate product, so you're guaranteed to earn the rate you lock in until the CD's 澳洲幸运5官方开奖结果体彩网:maturity date, no matter what the Federal Reserve does with the fed funds rate in the future.
• Higher interest rates than liquid accounts: Banks generally offer higher rates on CDs than on savings and money market accounts, in exchange for you keeping the money in the account and not touching it until you're allowed to withdraw it.
• Fully predictable earnings and withdrawal date: Because you know the CD's rate and term, you can calculate exactly how much you'll earn and when you can withdraw the funds without penalty.
• Extremely safe, with almost no bank or market risk: When you open a CD at an FDIC bank or an NCUA credit union, up to $250,000 in deposits are federally protected against the institution's failure. You're also safe from the market volatility—and potential loss in value—that can occur with stock and bond investments.
• Can deter spending temptations: Withdrawing funds before your CD matures causes you to pay an early withdrawal penalty, which can help keep you from giving in to temptations to dip into your savings for an unplanned purchase. This means a CD could be good for building your emergency fund.

Cons

• Early withdrawal of the funds incurs a penalty: If you do need to withdraw your CD funds before maturity, the bank or credit union will impose an 澳洲幸运5官方开奖结果体彩网:early withdrawal penalty. Typically, it's calculated as a certain number of months of forfeited interest earnings.
• You can’t add to your deposit: With the rare exception of add-on CDs, you can only deposit funds into the certificate at the time of initial deposit. This means you miss out on compound interest since you're not able to grow the account and apply the interest rate to your new balance every month like with a savings account.
• If CD rates rise, you may miss out on a higher yield: If you lock in your CD rate, but rates increase shortly after, you may wish you'd waited to score a higher return.
• If CD rates drop, you may wish you’d chosen a longer CD: Though you'll still be well-served by any CD yield you have locked in before interest rates drop, you may wish you'd locked in a longer-term CD to extend that competitive yield for a longer period.
• Typically return less than stocks over long periods: Though stock investments involve more risk and less predictability, they may offer greater returns over long periods.

How to Choose the Best CD for You

When ch🐼oosing a CD, consideꦐr the following factors:

• Your financial goals: Both short-term goals and long-term goals are important.
• How much money you have to deposit: CDs have minimums, so if you only have $500 to deposit, you'll need to find a CD with that minimum balance requirement.
• How long you can leave that money in the CD without touching it: This will help you determine the right term—whether that's a one-year CD or a three-year CD.
• Interest rates offered for your term and minimum deposit: The higher the rate, the more you will earn on your deposit during the CD term.
• CD type: Is it a bump-up CD or a regular CD? This will ensure you're choosing one that meets your needs and goals.

Once you choose a CD, open the account, and deposit y✅our money to start earning interest.

What Do You Need to Open One of the Best CDs?

To open a CD, you'll need some personal information inclu🐲ding, but not limited to:

• Name
• Address
• Phone number

For example, the bank's customer service team may ask you to provide a copy of your license or ID if you don't have an account with that institution already.

When you h🎃ave that info handyꦜ, fill out the application for your CD account:

1. State how you'll fund the CD, whether via an electronic transfer or another method.
2. Fund the CD.
3. State how you want to receive the interest, all at the end or in monthly installments (if required).

Once you've done all that, you should officially have a CD in your name, though check with the institution to ensure you've taken all the right steps.

How to Build a CD Ladder

Smart CD investors have a specific tactic for hedging against rate changes over time and maximizing their return. It's called a CD ladder and it enables you to access the higher rates typically offered on 5-year CDs, but with the twist that a portion of your money becomes available every year, rather than ev🌟ery five years. Here's how to do it.

1. Take the amount of money you want to invest in CDs and divide it by five.
2. Put one-fifth of the funds into a top-earning 1-year CD, another fifth into a top 2-year CD, another into a 3-year CD, and so forth through a 5-year CD. Let’s say you have $25,000 available. That would give you five CDs of varying lengths, each with a value of $5,000.
3. When the first CD matures in a year, you take the resulting funds and open a top-rate 5-year CD.
4. One year later, your initial 2-year CD will mature, and you'll invest those funds into another 5-year CD.
5. Continue doing this every year with whichever CD is maturing until you end up with a portfolio of five CDs all earning 5-year APYs, but with one of them maturing every 12 months, keeping your money a bit more accessible than if all of it were locked up for a full five years.

What Happens if I Withdraw From a CD Early?

If you withdraw money early from a CD, you'll likely have to pay an 澳洲幸运5官方开奖结果体彩网:early withdrawal penalty. This is usually a certain number of months' worth of interest that you earned in the CD thus far. For example, if you had deposited $10,000 in a 12-month CD with a rate of 5.00%, and withdrew it early, you might h𝓡ave to pay three months' worth of the interest you had earned. So instead of cashing out $500 at th𒈔e end of the CD term, you'd walk away with less interest earned, the exact amount depending on how early you withdrew the money.

Now, not all CDs have early withdrawal penalties. Some 澳洲幸运5官方开奖结果体彩网:no-penalty CDs are available and have more flexibility, However, they may also come with lower interest rates.

How Are CDs Taxed?

Just like how the interest you earn on any money you have in savings, money market, and checking accounts is 澳洲幸运5官方开奖结果体彩网:taxable as interest income at both the state and federal levels, the interest you earn on your money in a ꧃CD is too.

Your CD earnings will be reported to the IRS in the year they were earned and posted to your account, so that's when they're taxable—even though you may not withdraw the funds for one or more years into the future.

For example, if you have $1,000 in a 1-year CD with a 5.00% interest rate, you'll earn $50 in interest. You owe taxes on that $50, but not on the $1,000 principal you deposited at the start of the term.

If you decide to 澳洲幸运5官方开奖结果体彩网:add a CD to your IRA, you may not have to pay taxes until you're ready to withdraw in retirement. You can add CDs in both traditional and 澳洲幸运5官方开奖结果体彩网:Roth IRAs. With a Roth IRA, you are not penalized for withdrawing money from the account if it's open for at least 澳洲幸运5官方开奖结果体彩网:five years because it's funded with after-tax dollars. However, if you want to withdraw money from your Roth IRA CD before it matures, you will be hit with a CD early withdrawal penalty. If your CD matures in a traditional IRA before your retirement age, then you may not be able to withdraw that money without first paying taxes and fees.

Alternatives to CDs

CDs vs. Traditional Savings Accounts

澳洲幸运5官方开奖结果体彩网:Traditional savings accounts tend to offer lower interest rates. Banks or credit unions with no high-yield savings account options may only offer traditional savings accounts that pay 0.01% to 0.10%. While the national average for savings rates is 0.42%, according to the FDIC, many banks pay much less. For example, 澳洲幸运5官方开奖结果体彩网:Wells Fargo's Way2Save account pays 0.01% APY and Chase offers just 澳洲幸运5官方开奖结果体彩网:0.01% w🦋ith its Chase Savings account. When interest rates are high, the top CD rate can be up to 600x the rate you may earn on your money in a traditional sav✃ings account.

CDs vs. High-Yield Savings Accounts

If you just aren't sold on committing your funds for a certain amount of time, or can't afford to because you may need the money in the near term, a 澳洲幸运5官方开奖结果体彩网:high-yield savings account may be a better option. You'll be free to withdraw and deposit funds as you like, though some institutions will limit how many withdrawals you can make each month. Some savings accounts may also require a minimum balance.

CDs vs. Money Market Accounts

If you're looking for other high-yield accounts, a 澳洲幸运5官方开奖结果体彩网:money market account may serve your needs. Money market accounts offer the feature of allowing you to write checks on the account. Some money market accounts come with debit cards, but money market accounts tend to act more like savings accounts. They may also come with minimum deposit or balance requirements, and money market account rates can easily compete with savings account rates.

CDs vs. Bonds

If you're interested in venturing out of the bank and into the world of bonds, you have numerous options. You could put cash savings into U.S. government I bonds, which are designed to track or beat the inflation rate. Or you could invest in U.S. Treasuries, in which you lend money to the U.S. government for a fixed amount of time. The Treasury notes with durations of four weeks to one year are called T-Bills.

Another option is corporate and municipal bonds. Though it's difficult to research individual bonds on your own, you can easily invest in a 澳洲幸运5官方开奖结果体彩网:bond mutual fund or 澳洲幸运5官方开奖结果体彩网:bond exchange-traded fund which is diversified across a bundle of differenꦡt bond issues. You can also enter and exit these funds at any time.

CDs vs. Brokerage Accounts

If you have a brokerage account, you can also hold savings in the brokerage’s cash reserve account or their 澳洲幸运5官方开奖结果体彩网:money market fund (not to be confused with the money market accounts offered by banks). Just be sure to research what rate you’ll earn because in many cases, these brokerage cash accounts pay far less than what you can earn by keeping your money in an outside CD, savings account, or money market account. Some brokerages may also offer 澳洲幸运5官方开奖结果体彩网:brokered CDs, another option if you're already investing with a broker and want to openꦛ a CD.

CDs vs. Annuities

An annuity is a type of fixed-income investment provided by financial institutions. You can buy an annuity and pay it monthly or in a lump sum. Then, in the future, you receive fixed monthly payments. Annuities are insurance contracts that can guarantee income. While they are similar to a CD in that the income is guaranteed as long as you follow the rules of the contract, they are not as short-term as CDs may be. Annuities are most often used in retirement planning. CDs can also be used for retirement planning, but they🧸 are usually bought and held for terms of 6 months to 5 years rather than an annuity, which could be owned for 20 years or something similar. There may also be different withdrawal rules and limits and tax consequences with annuities.

CDs vs. Treasury Bills

Treasury bills are debt obligations backed by the U.S. government. They usually have maturities of one year or less. That timing is similar to CDs with shorter terms, but Treasury Bills may not offer the same level of return on the investment. Rates are comparable, ranging from 4.10% to 4.59% as of Nov. 7, 2024, but they can fluctuate daily.

CD rates can also change daily. The thing with T-bills is that you buy them at a discount and when they mature, you receive the full amount back, plus a little more. For example, you 🌄might buy a $1,000 T-bill for $950. When the bill matures, you will get $1,000, or $50 more than what you paid for it. This increase of $50 is the interest you earn. CDs are a little less complicated, where you put in a set amount, and then receive a fixed interest rate wheꦐn it matures.

How We Find the Best CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), the CD's minimum initial deposi💜🌳t must not exceed $25,000, and any specified maximum deposit cannot be under $5,000.

Banks must be available in at least 40 states. While some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, 澳洲幸运5官方开奖结果体彩网:read our full methodology.

Your Guide to CDs

• 澳洲幸运5官方开奖结果体彩网:What Is a Certificate ✱of Deposit (CD)?
• 澳洲幸运5官方开奖结果体彩网:What Is a Brokered CD?
• 澳洲幸运5官方开奖结果体彩网:What Is a CD Ladder?
• 澳洲幸运5官方开奖结果体彩网:Pros and Cons of CDs
• 澳洲幸运5官方开奖结果体彩网:How to Invest With CDs
• 澳洲幸运5官方开奖结果体彩网:How to Open a CD
• 澳洲幸运5官方开奖结果体彩网:How to Close a CD
• 澳洲幸运5官方开奖结果体彩网:CDs vs. Annuities
• 澳洲幸运5官方开奖结果体彩网:CDs vs. Stocks
• 澳洲幸运5官方开奖结果体彩网:CDs vs. Mutual Funds
• 澳洲幸运5官方开奖结果体彩网:CDs for ETFs
• 澳洲幸运5官方开奖结果体彩网:CDs vs. Savings Accounts
• 澳洲幸运5官方开奖结果体彩网:Short-Term vs. Long-Term CDs
• 澳洲幸运5官方开奖结果体彩网:CD Rates News
• 澳洲幸运5官方开奖结果体彩网:Best 3-Month CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 6-Month CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 1-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 18-Month CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 2-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 3-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 4-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 5-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best Bank CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best Jumbo CD Rates

*Disclosure: Annuity rates are subject to change at any time and the rate mentioned may no longer be current. Please visit  for current rates, full product disclosures, and disclaimer. Withdrawals above the 10 percent free withdrawal amount subject to a withdrawal charge and market value adjustment. FastBreak™ is issued by Gainbridge Life Insurance Company in Zionsville, Indiana. FastBreak™ is not a tax-deferred annuity, instead, it is taxed annually.