The Federal Reserve reduced its federal funds rate three times during 2025. This has created a situation where securing a competitive certificate of deposit rate may be urgent before rates drop more.
CD rates differ significantly among financial institutions. Shoppers are advised to compare offers to find the best possible rate.
Currently, the top CD rates are generally available on shorter terms, around one year or less. Online banks and credit unions are often the sources of these highest rates.
On January 17, 2026, the leading CD rate was 4% annual percentage yield. Marcus by Goldman Sachs offers this rate for its one-year certificate of deposit.
The interest earned from a CD depends on its APY. This figure represents total earnings after one year, accounting for the base rate and compounding frequency, which is typically daily or monthly.
For example, a $1,000 investment in a one-year CD with a 1.63% APY and monthly compounding would yield $16.42 in interest, resulting in a final balance of $1,016.42.
If that same $1,000 were placed in a one-year CD with a 4% APY, the interest would be $40.74, bringing the total to $1,040.74.
Larger deposits generate more earnings. A $10,000 deposit in a one-year CD at 4% APY would earn $407.42 in interest, maturing to $10,407.42.
While the interest rate is a primary concern for many choosing a CD, other types exist that offer different features, sometimes in exchange for a slightly lower rate.
A bump-up CD allows the account holder to request one rate increase if the bank's rates rise during the term.
No-penalty CDs, also called liquid CDs, permit early withdrawal of funds without incurring a penalty.
Jumbo CDs require a minimum deposit, usually $100,000 or more, and may offer a higher interest rate, though the difference from traditional CDs can be small in the current rate environment.
Brokered CDs are purchased through a brokerage firm rather than directly from a bank. They can offer higher rates or more flexible terms but may carry more risk and might lack FDIC insurance.