Certificate of Deposit (CD) rates are the fixed interest rates that banks or credit unions pay you for depositing your money for a specified term. These rates are influenced primarily by the Federal Reserve's federal funds rate, which affects banks' costs and, consequently, the interest they offer on deposits like CDs

How CD Rates Work

• Term Length: Generally, longer-term CDs offer higher rates because you agree to lock your money for a longer period, compensating for the risk of interest rate changes

• Market Interest Rates: CD rates fluctuate with overall market interest rates. When market rates rise, new CD rates tend to rise as well, and vice versa

Current CD Rates (May 2025)

• The best nationwide CD rates currently reach up to about 4.50% APY for terms ranging from 3 to 13 months, depending on the institution and minimum deposit requirements

• Examples of top rates include:
  • 3-month CDs at 4.50% APY
  • 6 to 13-month CDs also around 4.50% APY
• Rates vary by institution, term length, and deposit amount. Early withdrawal penalties typically apply if you access funds before maturity

Summary

CD rates are fixed for the term you select and are generally higher than savings accounts due to the commitment to leave funds untouched. They are largely driven by the Federal Reserve's benchmark rates and the economic environment, with current top rates around 4.5% APY for short to medium terms