The Federal Reserve reduced its federal funds rate three times during 2025. This has created a situation where investors may have a final opportunity to secure competitive certificate of deposit rates before potential further declines.
CD rates currently vary significantly across different financial institutions. Shopping around to ensure the best possible rate is essential.
As of January 10, 2026, the highest available CD rate is 4% annual percentage yield. Marcus by Goldman Sachs provides this rate on its one-year certificate of deposit.
Generally, the most favorable rates are found on shorter terms, around one year or less. Online banks and credit unions frequently offer these top rates.
The interest earned from a CD depends directly on its annual percentage yield. APY represents total earnings after one year, factoring in the base interest rate and compounding frequency, which is typically daily or monthly for CDs.
For example, a $1,000 investment in a one-year CD with a 1.63% APY and monthly compounding would yield a final balance of $1,016.42 after one year. This includes $16.42 in interest.
Choosing a one-year CD with a 4% APY instead would result in a balance of $1,040.74 over the same period, with $40.74 earned in interest.
A larger deposit increases potential earnings. A $10,000 deposit in a one-year CD at 4% APY would mature to $10,407.42, generating $407.42 in interest.
While interest rate is a primary consideration when selecting a CD, it is not the only factor. Several CD types offer different benefits, sometimes in exchange for slightly lower rates or added flexibility.
A bump-up CD allows the account holder to request a higher interest rate if the bank's rates increase during the term, usually permitted once.
No-penalty CDs, also called liquid CDs, enable withdrawals before maturity without incurring a penalty.
Jumbo CDs require a higher minimum deposit, often $100,000 or more, and may offer higher interest rates in return, though the difference from traditional CDs can be minimal currently.
Brokered CDs are purchased through a brokerage rather than directly from a bank. They can sometimes provide higher rates or more flexible terms but may carry greater risk and might lack FDIC insurance.