CD rates change weekly, so the "best" rate today may not be the best next week

No single bank consistently offers the highest CD rates across all term lengths. Banks compete on rates constantly—some raise them to attract deposits, others lower them when they have enough cash on hand. A bank offering 5.25% on a one-year CD this week might drop to 4.90% the next week. The rate that matters is the one available to you on the day you open the account, not the one you saw last month.

The banks with the highest rates tend to be online-only institutions and credit unions, not the large national banks you see on every street corner. Online banks have lower overhead costs, so they pass higher rates to depositors. Credit unions are member-owned and often prioritize competitive rates. Traditional brick-and-mortar banks like Chase, Bank of America, and Wells Fargo typically offer lower rates because they spend heavily on branch networks and marketing.

To find the current best rate for your specific term length, you need to check multiple sources on the same day. Rates are not locked in until you open the account, so comparing on Monday and opening on Wednesday means you may see a different rate when you actually deposit money.

Key Takeaways

  • Online banks and credit unions consistently offer higher CD rates than large national banks, though rates shift weekly and vary by term length.
  • The highest rate for a one-year CD is not necessarily the highest for a five-year CD, so compare rates for the specific term you want.
  • CD rates are only locked in when you open the account, so check rates the day you plan to fund the CD, not days or weeks earlier.
  • Aggregator sites like Bankrate, DepositAccounts, and the FDIC's BankFind tool let you filter by term and sort by rate, but you should verify the rate directly with the bank before opening.

Where online banks and credit unions post their current rates

Online banks publish their CD rates on their websites, usually in a rates table or calculator. You can visit each bank's site directly, but that takes time if you want to compare five or ten options. Aggregator sites do the comparison work for you: Bankrate, DepositAccounts, and NerdWallet all pull rates from multiple banks and let you filter by term length and sort from highest to lowest.

The FDIC's BankFind tool (bankfind.fdic.gov) is a government database that includes rates from FDIC-insured banks and credit unions. It is slower to update than commercial aggregators, but it is authoritative and has no ads or affiliate links pushing you toward certain banks.

Credit union rates are harder to find in one place because each credit union sets its own rates. If you are a member of a credit union, check their website or call their rates line. If you are not a member, you can search CO-OP Network or Shared Branch to find credit unions that accept members in your area, then call them directly to ask about CD rates.

When you find a rate that looks good, do not assume it will still be available tomorrow. Click through to the bank's website or call them to confirm the rate is current and to understand any minimum deposit requirements or other conditions.

How to compare rates across different term lengths

Banks offer different rates for different CD terms—typically three months, six months, one year, two years, three years, five years, and sometimes longer. A bank might offer 5.30% on a one-year CD but only 4.85% on a two-year CD. You need to compare rates only for the term length you actually want, not the highest rate the bank offers overall.

When you use an aggregator site, filter by your desired term first. If you want a one-year CD, look only at one-year rates. If you want a five-year CD, look only at five-year rates. Comparing a one-year rate to a five-year rate tells you nothing useful because you are not choosing between them—you are choosing between banks for the same term.

The difference between the highest and lowest rate for the same term can be significant. On a $10,000 one-year CD, the difference between 5.25% and 4.50% is about $75 in interest over the year. On a $50,000 CD, that same difference is $375. Longer terms amplify the difference: a 5.25% five-year rate versus a 4.50% five-year rate on $50,000 is roughly $1,875 in total interest.

What to check before opening an account

The interest rate is not the only thing that matters. Before you open a CD, confirm the bank is FDIC-insured (or the credit union is NCUA-insured). This means your deposit is protected up to $250,000 if the bank fails. The aggregator sites usually show this, but verify it on the bank's website or by calling.

Check the minimum deposit requirement. Some banks require $500 to open a CD; others require $25,000. If you do not have the minimum, you cannot open the account at that bank, no matter how good the rate is.

Understand the early withdrawal penalty. If you need the money before the CD matures, you will pay a penalty—usually a certain number of months of interest. A bank might charge three months of interest if you withdraw early from a one-year CD, or six months if you withdraw early from a five-year CD. The penalty is deducted from your principal, so you could end up with less money than you deposited. Read the bank's CD terms document before you open the account so you know what the penalty is.

Some banks offer "no-penalty CDs" that let you withdraw without penalty, but they pay lower rates to offset that flexibility. Whether a no-penalty CD makes sense depends on whether you might need the money early. If you are certain you will not touch the money, a standard CD with a higher rate is usually better.

Why large national banks offer lower rates

Chase, Bank of America, Wells Fargo, and similar large banks typically offer CD rates that are 1% to 2% lower than online banks and credit unions. This is not because they are dishonest—it is because they have different business models. They make money from loans, credit cards, and investment services, not primarily from deposits. They do not need to attract deposits aggressively because they have stable funding from their existing customer base.

Large banks also spend heavily on branch networks, advertising, and customer service. Those costs are built into their lower rates. You are paying for the convenience of walking into a physical branch, but you are paying for it in lower interest.

If you already have a checking account at a large bank and value the convenience of managing everything in one place, a CD at that bank may be worth the lower rate. But if you are purely chasing the highest rate, you will almost always find it at an online bank or credit union.

How to lock in a rate once you find one

Once you have found a rate you want, you need to open the account quickly because rates can change. Most banks let you open a CD online in 10 to 15 minutes. You will need your Social Security number, address, and a way to fund the account (usually a bank transfer from another account).

The rate is locked in when the account is opened and funded, not when you start the process. If you start the process on Monday but do not fund it until Wednesday, the rate may have changed. Check the rate again before you fund the account.

Some banks let you "rate lock" a CD for a short period—usually 24 to 48 hours—while you arrange the funds. If the bank offers this, use it. If not, fund the account as soon as you have completed the process.

Once the CD is open and funded, the rate is locked for the entire term. You cannot lose money if rates rise after you open the account. You also cannot benefit if rates fall—you are stuck with the rate you locked in. That is the trade-off of a CD: certainty in exchange for no upside.

When to shop for CDs and when to wait

CD rates follow the Federal Reserve's interest rate decisions. When the Fed raises its benchmark rate, banks usually raise CD rates within days or weeks. When the Fed cuts rates, CD rates fall. If the Fed is expected to cut rates soon, you might want to open a CD now before rates drop. If the Fed is expected to raise rates, you might want to wait.

However, predicting Fed moves is difficult, and even experts get it wrong. A safer approach is to open a CD when you have money to invest and you are confident you will not need it for the term length you choose. Do not try to time the market by waiting for rates to rise or fall—you will usually guess wrong.

If you have a large sum to invest, consider laddering: open multiple CDs with different term lengths. For example, open a one-year CD, a two-year CD, and a three-year CD with equal amounts. When the one-year CD matures, you can open a new three-year CD at whatever rate is available then. This spreads your risk and lets you take advantage of rate changes without betting everything on one term length.

Frequently Asked Questions

Can I move money from one CD to another if I find a better rate?

Not without paying an early withdrawal penalty. Once your money is locked into a CD, you cannot move it to another bank's CD without closing the first one early. The penalty usually wipes out any gain from a slightly higher rate at another bank. If you want to switch banks, wait until the CD matures and open a new one at the new bank.

Do I have to pay taxes on CD interest?

Yes. CD interest is taxable income in the year you earn it, even if you do not withdraw the money. The bank will send you a 1099-INT form at tax time showing how much interest you earned. You report this on your tax return. This is one reason CDs are better for money you do not need to touch—you are not paying taxes on interest you withdraw and spend.

What happens to my CD if the bank fails?

If the bank is FDIC-insured, your CD is protected up to $250,000. The FDIC will either transfer your CD to another bank or pay you the full amount. You will not lose money. This is why checking FDIC insurance status before opening a CD matters.

Is a five-year CD worth it if rates might rise?

That depends on your risk tolerance. A five-year CD locks in today's rate for five years. If rates rise, you will wish you had waited. If rates fall, you will be glad you locked in the higher rate. Most people should not try to predict which will happen. If you need the money in five years and want certainty, a five-year CD is reasonable. If you might need it sooner, a shorter term is safer.

Can I open multiple CDs at the same bank?

Yes. You can open as many CDs as you want at the same bank, as long as each account is under $250,000 (the FDIC insurance limit per account). Many people open multiple CDs with different term lengths at the same bank to ladder their investments.