Different CDs can have different term lengths, interest rates, and more

Certificates of deposit are investment vehicles that earn interest on a fixed sum of money over a set term

CDs come in varying term lengths, from three- or six-month commitments to decadelong terms. Typically, the longer the term, the higher the interest rate.

Explore current CD interest rates

Data itself is not (exactly) a financial advisor, but it can help you decide between a variable or fixed rate CD, or CDs with different term lengths. A chart from the Federal Reserve shows the three-month trend of CD interest rates.

Use a CD rate calculator

This CD Rate Calculator allows you to determine your interest earnings and total savings balance at CD maturity. Enter your initial deposit, your interest rate, and your term length in months or years. Click here to use it.

CDs come with risks, such as penalties for early withdrawal and inflation

CDs are generally considered fairly safe investment options. A CD bought via a federally insured bank is insured up to $250K.

CD ladders are an investing strategy in which you buy multiple CDs with different maturity dates

This way, you take advantage of high interest rates with longer-term CDs while keeping liquidity with shorter-term CDs. If you're well acquainted with the basics of CD investing, the Wall Street Journal's Oyin Adedoyin, and guest host Danny Lewis, can tell you how staggering your investments makes good money.

Banks make money by loaning customer deposits and earning interest

This means the interest you earn on your deposits is lower than what the bank earns on the same amount. Banks often keep cash reserves (though a minimum requirement was rescinded in 2020) but generally invest in government bonds, corporate securities, and loans to other banks. During bank runs, depositors withdraw more than the bank has on hand.

What’s the outlook for CD rates in 2025?

The federal funds rate can have a big impact on CD interest rates. That means it also affects the amount of money any given CD can earn you. To learn more about how CD rates will look in 2025, and how recent rate cuts correlate to that, read this article.

The concept of CDs dates back to the 1600s in Europe

Banks in the US started issuing CDs in the early 1800s as the banking system began to take shape following the Revolutionary War. The federal government did not formally insure CDs until the FDIC was formed in 1933.

Not all companies with bank-sounding names are actually FDIC-insured banks

When purchasing a certificate of deposit, it's important to know if you are purchasing a “deposit” product issued by an FDIC-insured bank.

The CD whose rates change based on Villanova basketball games

Ardent Credit Union in Philadelphia tied the interest rates of one of its certificates of deposit to whether Villanova won or lost a basketball game. A win moved the rate to 4.25%, while a loss reduced it to 3.9%. Financial experts say its only beneficial for a narrow group

Periodically, the Federal Open Market Committee decides whether to raise, hold, or lower the federal funds rate

The federal funds rate is the interest rate at which banks lend their excess funds through the Fed. This influences what banks are willing to pay consumers for their deposits in savings and CD accounts. Typically, the higher the federal funds rate, the higher the interest rates on CDs.

Banks have increased small loan programs since 2018, upping competition for payday lenders

One of the reasons payday lending flourished for nearly two decades is that most banks charged high overdraft fees and didn't offer small loans. However, since 2018, banks have increased their small loan options. Supporters say this provides safer alternatives for consumers, as banks are subject to more regulatory measures and are less likely to allow consumers to keep rolling over loans.

Read about the situations where a high-yield savings account doesn't make sense

While financial experts often recommend high-yield savings accounts, one expert argues that prioritizing adding more money to one doesn't make sense for someone who has a lot of high-interest debt or isn't taking advantage of their company's 401(k) match.

How credit unions compare to traditional banks

Although credit unions offer great perks like higher-than-average interest rates, they aren’t the right fit for every customer. This handy guide helps would-be bankers identify their top financial priorities. To see how credit unions stack up against traditional banks across key areas like branch locations, customer service, and digital technology, click here.

Private credit grew from a $250B asset class in 2010 to around $1.5T in early 2024

That's partly due to the industry's rising interest rates that created more upside for investors. Interest rates have increased in recent years alongside the Federal Reserve's interest rate hikes beginning in 2022. Private credit loans typically stretch over multiple years (typically between five and seven years, although term lengths vary).

Companies sometimes issue corporate bonds to raise capital

These bonds offer investors regular interest payments in addition to the return of the principal amount at maturity. They allow companies to raise capital without losing ownership.

Raising interest rates can help control inflation

While controlling a complex and dynamic economy is difficult, interest rates—more specifically, the rate at which banks lend each other money overnight—are a powerful tool. Generally, raising the rate makes purchases more expensive and cools an overheated economy.

Open-end and closed-end funds differ in how they create and distribute shares

Open-end funds are able to create new shares on a daily basis, while closed-end funds have a set number of shares. This impacts the way shares are traded on the open market, and the way they’re priced.

Title loans are a type of short-term loan with high interest rates

Title loans allow borrowers to use their vehicle's title as collateral for a short-term loan. Similar to payday loans, title loans often have high interest rates and are mostly structured to last around 30 days. If title loans aren't repaid, the lender can take possession of the borrower's vehicle.

In real estate, a larger down payment can reduce your loan amount

However, the trade-off is liquidity: Tying up too much cash in a home can reduce emergency savings and delay your purchase.

Financial institutions check for lots of things before authorizing a purchase

Before authorizing a purchase, card issuers consider whether or not the cardholder has a high enough available credit limit to make the purchase, where the purchase is being made in order to reduce fraud, and more.

Compound interest has been called the eighth wonder of the world

That's because it has the near-magical quality of helping financial investments grow exponentially. Rather than accruing a standard lump of simple interest annually, compound interest takes the previous year’s yield and reinvests it as part of the principal.

The two main types of life insurance are term and permanent

The biggest difference between the two is how long they cover the life of the insured person and how much they cost. This guide can help you learn more about term and permanent life insurance, plus their different variations, to choose the right policy for you.

Long- and short-term capital gains have different tax implications

Short-term gains (assets held for one year or less) are taxed like regular income, at rates up to 37%. Meanwhile, long-term gains (assets held over a year) are capped at 20%, offering significant savings for high earners.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Entry-level investment bankers boast $200K paychecks, but it's not all base salary

These days, a first-year analyst typically makes closer to $100K per year as their base salary, but is eligible to receive significant bonuses on top of that.

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US consumers collectively owe more than $1T to credit card companies—almost as much as they owe in auto loans.

Learn how to read a prospectus, the juicy document that any company must file with the SEC before going public.

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Studies suggest when you sleep is as important as how much you get, and syncing with your circadian rhythms may lead to less fatigue and improved long-term health outcomes

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Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

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Domino's Pizza's 30-minute delivery guarantee was responsible for the chain's 1980s surge, but it was discontinued after the company was found liable for delivery driver accidents.

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The Beatles' US label rejected the band's first two singles, 'Please Please Me' and 'From Me to You,' with one executive calling the band 'dead in the water.'

Budweiser stores yeast derived from the original 1800s strain in a secret bunker, which only the Head of Yeast Management can access—not even the CEO

'Silent' fireworks have gained more interest in recent years as a quieter celebratory option.

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

Sunflowers have long been a symbol of nuclear disarmament because they can extract large amounts of radioactive cesium from soil.

While El Niño moves warm Pacific Ocean waters east along the equator, La Niña moves them west, shifting where rainfall will become more common for months.