What Is a Good Interest Rate on a Certificate of Deposit? | Banking Advice
Key Takeaways
- Some CDs offer rates above 4%.
- Financial institutions operating primarily online often pay attractive CD rates.
- Interest rate decisions by the Federal Reserve influence CD rates.
Interest rates for certificates of deposit have soared in recent years along with rates for savings accounts, mortgages and other financial products. But not all CDs are created equal. Some offer low annual percentage yields while others deliver generous rates. In recent months the Federal Reserve has lowered interest rates, which as brought CD rates down, too. But banks respond to the Fed at different times, a U.S. News analysis of CD rates found, meaning rate vigilance is even more important.
Amid the mix of CDs, how do you know what a good interest rate is? And where can you find a good CD rate?
What Is a Good Interest Rate on a CD?
John Jones, an investment advisor representative at Heritage Financial in Newberry, Florida, says finding a good CD interest rate depends in part on whether the CD rate would outpace the inflation rate. A CD rate that lags the inflation rate may be “tying up money” that could potentially earn more elsewhere, according to Jones.
Financial advisor Michael Corgiat, senior vice president of Wealth Enhancement Group in St. Louis, says that nailing down a good interest rate on a CD rests on factors such as the maturity period and the financial institution.
While short-term CD rates used to be higher than long-term CD rates, the yield curve has flattened out currently with the anticipation of future rate cuts. “There have been a few rate cuts (this year) and it looks like one more will be coming in December and possibly two to three more in 2026,” Corgiat says.
As of July 20, 2026, the national average rate for a 12-month CD was 1.68%, according to the FDIC. The national average rate for a 36-month CD was 1.34% and the national average rate for a 60-month CD was 1.36%. The best online banks typically offer higher APYs.
As of November 2025, these are typical ranges for good CD rates in six categories, according to Corgiat:
- 6-month CD: 3.70% – 3.80%
- 12-month CD: 3.70% – 3.80%
- 24-month CD: 3.60% – 3.75%
- 36-month CD: 3.70% – 3.80%
- 48-month CD: 3.70% – 3.90%
- 60-month CD 3.90% – 4.00%
The table below shows a sampling of recent rates for 12-month CDs at banks and credit unions.
How to Get the Best CD Interest Rate
More than any other factor, getting the best CD interest rate involves shopping around. When you’re looking for a CD, compare offerings at several banks and credit unions. Consider the APY as well as the maturity period, minimum deposit requirement, penalties for early withdrawals and the financial institution’s track record for customer service.
“CDs are familiar vehicles, and there is not much difference from one to another, aside from the institution,” says Jones. “The main difference is how much of the yield the institution chooses to pass on to depositors.”
Corgiat recommends checking out CDs at banks and brokerage firms that operate primarily online to score what could be the most attractive rates.
“Brick-and-mortar banks and credit unions offer competitive rates,” says Corgiat, “but they’re typically lower due to the cost of (operating) branch offices.”
Another suggestion: Hunt for promotional CD rates. Some financial institutions try to attract customers by paying a higher-than-normal CD rate if a minimum amount of money is deposited by a certain date.
If you’re aiming to boost the odds of solid returns on CDs, Jones recommends trying a tactic known as laddering. When you ladder CDs, you spread money among several accounts, mixing short-term CDs with long-term CDs. Laddering provides investment flexibility and enables access to cash when a CD term expires.
The Future of CD Interest Rates
Experts can only speculate where CD interest rates will be heading in the future.
Several factors influence CD rates, including economic conditions and inflation. When the inflation rate is low, CD rates tend to go down. But when the inflation rate is high, CD rates tend to go up.
The Federal Reserve plays a major part in combating inflation. As a result, the Fed typically raises its benchmark interest rate when inflation is high and cuts the benchmark rate when inflation is low. Interest rates for CDs normally move in tandem with the Fed’s rate fluctuations.
One positive aspect of CDs: Interest rates generally don’t change during a CD’s term, such as 12 or 24 months. Therefore, the interest rate is locked in for that period.