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Written byJ.J. Starr
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J.J. StarrInsurance Writer
J.J. Starr is an insurance and personal finance expert who has been writing for Compare.com since 2022. Her work has been published across the web, appearing on sites such as Insurify.
Prior to writing for Compare.com, J.J. was a registered banker and life insurance consultant, holding a Series 6, FINRA, and life insurance license. She also earned a master’s degree in writing from New York University.
J.J. has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand.
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Edited byMatthew Gross
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Matthew GrossEditor
Matthew Gross is an editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
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Reviewed byJohn Leach
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John LeachLicensed P&C Insurance Agent and Expert Reviewer
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
John Leach is a licensed insurance agent who reviews and fact-checks articles for Compare.com. John has several years of experience reviewing and editing various insurance topics, and he also holds a valid personal lines producer license from the California Department of Insurance (NPN #20461358).
Updated
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In This Article
The national average annual percentage yield (APY) for a one-year certificate of deposit (CD) is 1.5%. But online banks, credit unions, and brokerage firms — like NuVision Federal, Ally, and Marcus — offer much higher rates, topping out at 5%. That’s a difference of $350 per year on a $10,000 deposit.
That’s why shopping around matters. Rates, early withdrawal penalties, and compound interest vary widely and can make a big difference to your bottom line.
We’ll explain everything you need to know about CD rates, how to find the best one, and how to compare other savings accounts.
Key Takeaways
CD rates vary considerably, with a national average of 1.5% and higher rates exceeding 4%.
Online banks and credit unions tend to offer some of the highest CD interest rates.
Laddering CDs so that one matures and renews annually helps you spread risk and maximize returns.
Current CD Rates by Term
CD rates vary considerably by term length, and not always in ways you’d expect. Short-term CDs currently offer returns that are higher than or similar to long-term CDs. While national averages remain low, many online banks and credit unions offer higher returns.
The table below shows current rates across CD terms, including national averages and the best CD rates as of early 2026, according to Compare.com research. Always check current rates before opening an account.[1]
CD Term  | National Average APY | High-Yield Range | Monthly Earnings on $10K* |
|---|---|---|---|
| 3 months | 1.28% | 4.05% | $33.14 |
| 6 months | 1.47% | 5.00% | $40.74 |
| 1 year | 1.52% | 4.10% | $33.54 |
| 2 years | 1.49% | 4.00% | $33.33 |
| 3 years | 1.31% | 4.15% | $34.58 |
| 5 years | 1.34% | 4.15% | $34.58 |
*Monthly earnings fluctuate based on how frequently interest is compounded.
Current rates as of April 10, 2026
What Is a Certificate of Deposit?
A certificate of deposit (CD) works like a savings account with a fixed interest rate. You make an initial deposit with a financial institution for a specified period, ranging from a few months to a few years. In exchange, the bank or credit union usually offers a flat rate.
Opting for higher interest rates and more frequent compounding increases your returns. So even with a flat rate, shopping around can mean the difference between 2% and more than 4%.
Federal Deposit Insurance Corporation (FDIC) deposit insurance covers up to $250,000 per person, per institution. If you plan to open a CD, make sure it’s with an FDIC-insured institution.
Find the Best CD Rates
Compare APYs and minimum deposits from multiple banks simultaneously.
How CD Rates Work
To save your money in a certificate of deposit, you first open a CD account at a financial institution and fund it within the grace period. If you open the CD online, you’ll electronically transfer at least the minimum deposit amount to fund the account. If you open an account in person, you can bring a personal or cashier’s check.[2]
You’ll select the term length when you open your account, which is how long you agree to leave your money in the account. The institution will also supply disclosures about rates of return, fees, early withdrawal penalties, and other important information. Review this information carefully.
Once you open the CD, you leave the money to mature for the length of the term. At maturity, you’ll have the choice to roll the money back into another CD or move it somewhere else.
CD Rate Trends and Outlook for 2026
Banks base CD rates on the Federal Reserve’s federal funds rates.[3] The Fed chooses its rates based on what’s happening in the market. But recent market volatility, including inflation rising to 3.3% in March 2026, makes predictions difficult.[4]
Overall, CD rates are flat, hovering around 4% at the high end for most terms. If inflation rises, the Fed may intervene by raising interest rates. But other economic trends and events also influence policy.
During recessions, the Fed usually lowers rates to stimulate growth.[5] Multiple problems, like a recession coupled with inflation, can complicate the Fed’s decisions.
How CD Rates Compare to Other Savings Options
CDs, high-yield savings accounts, and other savings accounts have similar rates of return and are usually FDIC-insured. The main difference is that savings and money market accounts offer more liquidity but can adjust rates without notice. CDs have a fixed term length but also lock in your rate.
Here’s an overview of average APY and returns from other savings options, according to our research.[1]
Savings Method | Average APY | Annual Return on $10K | Liquidity |
|---|---|---|---|
| High-yield savings accounts | 0.39% | $39 | Highly liquid, but may require a minimum balance |
| Money market accounts | 0.56% | $56 | Highly liquid, but may require a minimum balance |
| Traditional savings accounts | 0.07% | $7 | Full access |
Current rates as of April 10, 2026
Keep in mind that many institutions offer competitive rates, including for CDs, which can increase your returns by hundreds of dollars per year.
Factors That Influence CD Rates
Institutions base their CD rates on the federal interest rate, which responds to market conditions. Many factors can influence the rates of CDs, including:
Federal Reserve policy: When the Fed raises or lowers the benchmark interest rate, banks adjust their rates in response.
CD terms: Longer-term CDs usually have higher rates. But if banks expect rates to fall, they offer higher rates on shorter-term CDs.
Inflation: The Fed usually raises rates when inflation rises, which often means higher CD rates.
Promotions: Banks may use higher-than-average rates to attract deposits.
Deposit amounts: Banks sometimes offer higher rates for larger account balances.
How to Get the Most From CD Rates
Getting the most from a certificate of deposit account isn’t just about getting the best rate. You can use various strategies to give yourself the best chance of growing your money. Paying attention to the market, CD laddering, and actively reinvesting can earn you higher yields.
Build a CD ladder
CD ladders spread the risk of rate changes across multiple accounts with different maturity dates.[6] Ladders offer the added benefit of giving you regular access to a portion of your money. If you need to withdraw your money early, also known as “breaking” your CD, you can choose to break just one, limiting the interest you’ll forfeit.
Here’s how a three-year CD ladder looks:
Invest equal amounts into a one-year, two-year, and three-year CD.
When the one-year CD matures, reinvest it into a new three-year CD.
When the two-year CD matures, reinvest it into another three-year CD.
When the three-year CD matures, continue the reinvestment cycle.
When to lock in CD rates
If you expect interest rates to fall, you should lock in a high rate. The Federal Reserve usually announces its expectations for future rate increases or decreases.
But even with announcements and forecasting, nothing is certain. At the end of 2025, pundits expected rates to fall. But increasing inflation and market volatility may change that trajectory.
You can’t expect to time things perfectly. But using strategies to spread out your risk can help you keep your money safe.
Compare CDs
Find the best CD value for your money.
CD Rates FAQs
CDs offer many options, but we can help you cut through the noise. Here’s what people opening up a CD want to know most about the process.
Are CD rates going up or down in 2026?
It depends. At the beginning of the year, it looked like the Federal Reserve would lower interest rates, which would lower CD rates. Economic uncertainty has caused the Fed to pause taking action as it evaluates inflation and a volatile market.
Can you withdraw money from a CD early?
Yes. You can withdraw money from a CD early, but you usually forfeit some or all of the interest. Different banks have different penalties, and some are more lenient than others. Check with the financial institution that issued your CD to find out its penalties for breaking a CD.
Which banks have the best CD rates?
Online banks and credit unions tend to have the best CD rates. Research suggests that credit unions regularly outperform traditional banks on lending and savings rates. But comparing rates from multiple institutions can help you find the best value for your money.
Is a CD or a high-yield savings account better?
It depends. If you think you’ll need access to your money in the short term, you should open a high-yield savings account. High-yield savings accounts tend to have lower interest rates than CDs but offer more liquidity. If you’re OK with having your money locked up for a longer term, CDs typically offer higher rates.
How do you choose between different CD terms?
You can choose between CD terms by weighing interest rates against when you think you’ll need the money. Longer-term CDs typically offer higher rates but keep your money locked up. Short-term CDs offer more flexibility but usually pay lower rates. You can place the account’s maturity just before you expect to need it.
Sources
- Federal Deposit Insurance Corporation. "National Rates and Rate Caps – March 2026."
- Consumer Financial Protection Bureau. "What is a certificate of deposit (CD)?."
- Federal Reserve System. "Economy at a Glance - Policy Rate."
- U.S. Department of Labor. "Consumer Price Index - March 2026."
- Federal Reserve System. "How does the Federal Reserve affect inflation and employment?."
- Federal Reserve System. "In Search of a Risk-free Asset."
)
J.J. StarrInsurance Writer
J.J. Starr is an insurance and personal finance expert who has been writing for Compare.com since 2022. Her work has been published across the web, appearing on sites such as Insurify.
Prior to writing for Compare.com, J.J. was a registered banker and life insurance consultant, holding a Series 6, FINRA, and life insurance license. She also earned a master’s degree in writing from New York University.
J.J. has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand.
Matthew GrossEditor
Matthew Gross is an editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
John LeachLicensed P&C Insurance Agent and Expert Reviewer
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
John Leach is a licensed insurance agent who reviews and fact-checks articles for Compare.com. John has several years of experience reviewing and editing various insurance topics, and he also holds a valid personal lines producer license from the California Department of Insurance (NPN #20461358).
