What Is a CD and What Are CD Rates?

  • Stable: CDs save your investments from the volatility of the stock market.

  • Secure: They are federally insured for up to $250,000 per institution for individual accounts and up to $500,000 for joint accounts.

  • Reliable: CDs offer predictable interest rates at very low risk.

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What Is a CD and What Are CD Rates?

  • Stable: CDs save your investments from the volatility of the stock market.

  • Secure: They are federally insured for up to $250,000 per institution for individual accounts and up to $500,000 for joint accounts.

  • Reliable: CDs offer predictable interest rates at very low risk.

Select a product and save

What Is A Certificate Of Deposit Account?

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A certificate of deposit account is a savings product offered by most banks and credit unions in the US. They are different from savings accounts in that they mature over a specific term and typically come with a fixed rate of interest.   

CD term lengths usually range from one month to five years, during which they earn a fixed rate of interest. They typically have a higher APY than savings accounts and money market accounts. Withdrawing from a CD account before maturity can attract penalties, subject to the conditions of the financial institution where it’s held. Depending on the prevailing interest rates, CDs are often the best way to take advantage of the highest interest rates on your savings at low risk.

Types of CDs

CDs are immensely popular because they protect your savings from the volatility of the stock market and the general economy. However, before you put your money into one, consider that there are several types of CDs that come with their own set of unique features and benefits. Let’s take a look at the most common types of CDs:

  • Traditional CDs: Also known simply as CDs or fixed-rate CDs, these are the most basic format in the category. They are essentially time deposits with fixed interest rates and limited liquidity, which means that your deposit is locked in for the period of the deposit. 

  • Bump-up CDs: This type of CD lets you jump to a higher interest rate during the deposit period. Let’s say you opened a 12-month CD account at 2% APY. Six months down the line, you notice that your bank is now offering 2.5% APY on CDs. A bump-up CD lets you request your bank to raise your APY to the new rate at no extra charge or commitment.

  • Step-up CDs: This is pretty much the same as a bump-up CD. The sole difference is that instead of having to manually request your bank for a bump-up to a better interest rate, it happens automatically when you’ve put your money in a step-up CD. 

  • High-yield CDs: Similar to a high-yield savings account, a high-yield CD offers a substantially higher rate of interest than regular CDs. The catch is that you may be required to make a bigger initial investment or commit to a longer lock-in period in a high-yield CD account. 

  • No-penalty CDs: As the name suggests, these CDs do not require you to pay a penalty if you make a withdrawal before maturity as most other types of CDs do. This is a great option for people who are interested in using a CD as an emergency fund. 

  • Add-on CDs: This is another unique CD that lets you make additional deposits to your account during its term. The minimum add-on amount differs from bank to bank, as does the minimum deposit amount for this type of CD. It offers a great opportunity for people who want to use CDs as a recurring savings instrument.

Beyond the six most common types listed here, there are multiple other CD formats with varying features and benefits. For instance, market-linked CDs, foreign currency CDs, jumbo CDs, IRA CDs, brokered CDs, zero-coupon CDs, and so on. Do your research to find out which one suits your requirements the best before investing.

CDs vs. Other Savings and Deposit Options

The biggest draw of CDs is that they offer predictable returns at low risk. You know exactly what you’ll earn when your CD matures right at the time of opening your account. That makes them ideal for people who are saving up for retirement or a specific financial goal and cannot afford to risk their principal investment.

On the flip side, interest earned on a CD can seem meager in comparison to certain other savings and investment options that offer tantalizingly high returns. However, these high yields are predicated on you accepting a significantly higher level of risk. What that often means is that not only may you not earn any interest on your investment, you could potentially lose a part or most of your principal.

The bottom line here is that as long as you’re willing to err on the side of caution, CDs are a reliable option to keep your money safe and growing over time.

CD Interest Rates

Like any other banking instrument, interest rates on CDs are closely tied to Federal Reserve benchmarks, and generally follow the cues set by the US central banking system. Banks and credit unions often raise or lower interest rates predictively in anticipation of Federal Reserve announcements depending on their demand for consumer deposits.

According to the FDIC, average interest rates on CDs ranged from 0.15% (for one-month CDs) to 1.21% (for five-year CDs), as of January 2023. Meanwhile, the average interest rate on a one-year CD stood at 1.28% during the same time.

Being able to secure the best APY on CDs, however, goes beyond the prevailing interest rates. Much of it depends on a variety of choices and factors. For instance, you can secure a higher rate of interest on your deposit if you’re willing to have your money invested for a longer term. Similarly, a CD with a high minimum deposit requirement is likely to return a better rate of interest than one with a low entry amount.  

Explore the Best CD Options With SaveBetter

Finding the best CD can be daunting when you consider the sheer number of options available out there. That’s why SaveBetter makes it easy for you to locate and invest in a CD that meets your specific savings requirements, often at rates multiple times  the national average. 

We are an online marketplace that lists only federally insured savings and deposit instruments from reputable banks and credit unions across the US. SaveBetter lets you operate multiple accounts with different financial institutions, all with the comfort of a single log-in. 

Sign up on SaveBetter today to see your savings grow faster and safer!

What Is SaveBetter?

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SaveBetter brings together high-yielding savings products offered by a network of U.S. financial institutions. It’s your destination to discover competitive savings products and start saving wisely. Select and fund multiple savings products from different institutions and manage them all from one account.

Safety

Safety

Funds deposited into any of the savings products available through SaveBetter are always held by a federally insured financial institution. A very easy and safe way to diversify your deposit portfolio. We use a host of cybersecurity measures to protect your funds and sensitive information.

Choice

Choice

Savings products from our network of financial institutions offer flexible terms and some of the most competitive interest rates. You can easily find the right product or mix of products for you.

Convenience

Convenience

One account to hold all your deposit products. Simplified statements. Easy access to manage your funds – all through a streamlined digital platform.

How SaveBetter Protects Your Money and Personal Information

Federal Deposit Insurance Corporation

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All participating banks are members of the FDIC. Deposits in participating banks are insured by the FDIC up to the limits of federal law. The standard insurance amount is $250,000 per depositor, per insured bank, for each deposit account ownership category.

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National Credit Union Administration

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All participating credit unions are insured by the NCUA through its Share Insurance Fund. Deposits in participating credit unions are insured by the NCUA up to the limits of federal law. The standard insurance amount is $250,000 per depositor, per insured credit union, for each deposit account ownership category.

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Cybersecurity is a top priority at SaveBetter

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We invest in a variety of technologies to protect our customer’s data, privacy and transactions. These include Multi-Factor authentication, encryption, and Cloudflare advanced internet protection and monitoring. We are a SOC 2 certified organization, which means we have met the requirements outlined by the American Institute of Certified Public Accountants (AICPA) to ensure that we have the controls in place to keep customers' data secure and private.

Click to learn more about SOC 2 certification

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Why SaveBetter Is, Well, Better

With SaveBetter
One secure account guards your personal data and safely allows you to tap into yields from multiple savings products

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With traditional banking
Multiple signups, savings accounts, and products at different institutions each require you to provide sensitive personal information.
With SaveBetter
The platform brings together diverse and competitive federally insured savings products, including CDs with a range of terms, that increase your earnings potential.

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With traditional banking
There are fewer product options, possibly limiting your savings potential.
With SaveBetter
Only one account is required. You manage all your chosen savings products through the SaveBetter platform.

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With traditional banking
By opening new accounts at multiple institutions, you get more statements, must remember more passwords, and waste time.

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APY means Annual Percentage Yield. APY is accurate as of {todayDate}. Interest rate may change after initial deposit. Minimum opening deposit is $1.00.

Customer funds are held in various custodial deposit accounts. Each customer authorizes the Custodian Bank to hold the customer’s funds in such accounts, in a custodial capacity, in order to facilitate the customer’s deposits to and withdrawals from the various bank and credit union products that the customer requests through SaveBetter.com. The Custodian Bank does not establish the terms of the bank or credit union products and provides no advice to customers about bank or credit union products offered through SaveBetter.com. Central Bank of Kansas City, Member FDIC, d.b.a. Central Payments is the Service Bank. Lewis and Clark Bank is the Custodian Bank.