Current CD rates vary by bank and term length, and they change weekly

There is no single "current" CD rate — what you earn depends on which bank you choose, how long you lock your money away, and when you check. Banks set their own rates based on what the Federal Reserve has done and what they think will happen next. A one-year CD at one bank might pay 4.5%, while another pays 4.75% for the same term. A five-year CD at the same bank will almost always pay less than a one-year CD right now, because longer terms carry more risk for the bank.

Rates move in response to Federal Reserve decisions, which happen roughly every six weeks. When the Fed raises its benchmark rate, banks usually raise CD rates within days. When the Fed cuts rates, CD rates fall more slowly — banks are reluctant to lower what they pay depositors. This means the best time to lock in a CD rate is often right after the Fed announces a rate increase.

Online banks and credit unions almost always pay more than brick-and-mortar banks for the same term. A national bank branch might offer 4.0% on a one-year CD while an online bank offers 4.75% for the same product. The difference compounds: on a $10,000 CD, that 0.75% gap costs you $75 over one year. Over five years, the gap widens dramatically.

Key Takeaways

  • CD rates change weekly and vary by bank, so comparing rates across at least three providers before you commit is worth the 15 minutes it takes.
  • Online banks and credit unions typically pay 0.5% to 1.5% more than traditional bank branches for identical CD terms.
  • Longer CD terms usually pay less than shorter ones right now, so a one-year CD often beats a five-year CD by 0.25% to 0.5%.
  • Rates move most noticeably after Federal Reserve announcements, so checking rates the day after a Fed decision can reveal whether a move is coming.
  • The APY (annual percentage yield) is what matters, not the interest rate — APY includes compounding and is what you actually earn.

Where to check rates right now

Bankrate, DepositAccounts, and DepositAccounts.com all publish CD rates from hundreds of banks and credit unions, updated daily. You can filter by term length (three months, six months, one year, three years, five years) and see which institutions pay the most for each. These sites do not sell CDs themselves — they are rate comparison tools, so there is no conflict of interest in showing you the highest payers.

Your own bank's website will show you what it pays, but you should not stop there. Most people find their bank pays 0.5% to 1.0% less than the market leader for the same term. If you have a relationship with a credit union, check there too — credit unions often pay more because they are not-for-profit and return earnings to members.

When you find a rate you want to lock in, write down the bank name, the term, the APY, and the date you checked. Rates can shift by 0.1% or 0.2% in a single day, so knowing what you saw and when matters if you need to decide whether to move quickly.

How term length affects what you earn

Right now, the yield curve is inverted, which means shorter CDs pay more than longer ones. A three-month CD might pay 5.3%, a one-year CD 4.75%, and a five-year CD 4.1%. This is unusual — normally longer terms pay more because you are giving up access to your money for longer. But when the Fed has raised rates quickly and investors expect rates to fall, banks pay less for long-term commitments.

This creates a real choice: you can lock in a high rate for three months and then decide whether to renew, or you can accept a lower rate now to may provide the same rate for five years. If you think rates will fall (which many economists do), a short-term CD lets you capture today's high rate and then move to a new CD if rates stay high. If you think rates will rise further, a longer CD protects you from having to renew at a lower rate.

Most savers split the difference by using a CD ladder: you buy five one-year CDs, each maturing in a different year. As each one matures, you renew it for another five years at whatever rate the market offers then. This way you are not betting on where rates are going — you are just spreading your risk across time.

APY versus interest rate — why the difference matters

Banks quote two numbers: the interest rate and the APY (annual percentage yield). The interest rate is what the bank pays. The APY is what you actually earn, because it includes how often the bank compounds your interest. A CD with a 4.5% interest rate compounded daily will have an APY slightly higher than 4.5% — maybe 4.605%. Over five years on a $25,000 CD, that 0.105% difference adds up to about $130.

Always compare APYs, not interest rates. The APY is the true number. Banks are required by law to display it prominently, so if a website shows you only the interest rate and not the APY, that is a sign to look elsewhere.

What happens when your CD matures

When your CD term ends, the bank will either automatically renew it for another term at the current rate, or deposit the money into a regular savings account. Check your CD's terms to see which happens — most banks auto-renew, but some do not. If your bank auto-renews and you do not want to lock the money away again, you have a grace period (usually 7 to 10 days) to withdraw without penalty.

If rates have fallen since you bought your CD, auto-renewal at a lower rate can feel like a loss. But you have options: you can withdraw the money and shop for a better rate elsewhere, or you can let it renew and then move it later if a better opportunity comes along. The key is to mark your calendar for the maturity date so you do not miss the grace period.

Early withdrawal penalties and when they matter

Every CD has an early withdrawal penalty if you take your money out before the term ends. Penalties vary widely: some banks charge three months of interest, others charge six months or a percentage of the principal. On a $10,000 one-year CD paying 4.5%, a three-month penalty costs you about $112. On a five-year CD, the same penalty might be $225 or more.

This is why you should only put money in a CD if you will not need it before maturity. If there is any chance you will need the cash, a high-yield savings account is safer — you can withdraw anytime without penalty, and rates are competitive enough that the difference is often small.

Some banks offer "no-penalty CDs" that let you withdraw early without a penalty, but they pay less than standard CDs — usually 0.25% to 0.5% less. Whether a no-penalty CD makes sense depends on how uncertain you are about needing the money. If you are more than 80% sure you will not touch it, a standard CD pays more. If you are less sure, the no-penalty version removes a risk.

FDIC insurance and how much protection you have

CDs at FDIC-insured banks are covered up to $250,000 per depositor, per bank, per account ownership category. This means if you have a $100,000 CD at Bank A and a $100,000 CD at Bank B, both are fully covered. If you have $300,000 at Bank A, only $250,000 is covered — the extra $50,000 is at risk if the bank fails.

If you want to hold more than $250,000 in CDs and keep it all insured, you need to spread it across different banks. Some people use a CD brokerage service that buys CDs from many banks on your behalf, so your money is automatically spread across institutions and fully insured. The trade-off is that brokered CDs sometimes have higher early withdrawal penalties and less flexibility.

Frequently Asked Questions

How often do CD rates change?

Banks change CD rates daily or weekly, usually in response to what other banks are offering and what the Federal Reserve has signaled. Rates move most noticeably in the days after a Fed announcement. You do not need to check every day, but comparing rates once a week if you are shopping around is reasonable.

Should I buy a CD now or wait for rates to go higher?

No one can predict where rates will go. If you need to save money and rates are above 4%, locking in a one-year or three-month CD is reasonable. If you are waiting for rates to hit 5.5% or 6%, you may be waiting a long time. The best CD rate is the one you actually use, not the one you wish you had waited for.

Is a credit union CD safer than a bank CD?

Credit unions are insured by the NCUA (National Credit Union Administration) up to $250,000, just like banks are insured by the FDIC. The insurance is equally strong. Credit unions often pay more because they are not-for-profit, so they return earnings to members instead of shareholders.

Can I move money from one CD to another without a penalty?

Not without paying the early withdrawal penalty. Once your money is locked in a CD, you cannot move it to a different CD at a different bank without triggering the penalty. You have to wait until maturity, withdraw the money, and then buy a new CD elsewhere. This is why comparing rates before you buy matters — you are committing to that rate for the full term.

What is the difference between a CD and a savings account?

A CD pays a fixed rate for a fixed term and penalizes you for early withdrawal. A savings account lets you withdraw anytime without penalty but pays a lower rate. High-yield savings accounts now pay 4% to 4.5%, which is competitive with short-term CDs, so the choice depends on whether you need access to the money.