Thanks to payouts of 4% or more, the humble CD is making a comeback. Should you get one?

Should you get a certificate of deposit?

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Google searches for CD rates have increased dramatically over the past year. And it’s no surprise: As the Fed continues to raise rates, the payments on CDs have gone up, up, and up again. “If you’re looking for the highest yielding CDs, you’ll find yields ranging from 4% to 4.75%, depending on maturity, available nationally. These are levels not seen since the great financial crisis of 2008,” said Greg McBride, director of financial analysis at Bankrate. See some of the best CD rates you can get right here.

A certificate of deposit, also known as a CD, is a type of savings vehicle that pays a guaranteed interest rate for a fixed amount for a specified period of time. Defect? CDs effectively tie up your money over a period of months to years; cash out before the CD is due and you will be charged a fee.

And if you’re not shopping around, you’re probably looking at output levels that aren’t much different from pre-pandemic levels. “The reason for the disparity is that most banks, especially the larger ones, have tried to meaningfully raise CD rates but the most competitive banks and credit unions have kept up. when the Fed continuously raised the base rate,” said McBride. See some of the best CD rates you can get right here.

Latest CD prices

Here are the latest average rates on CDs, according to data from Bankrate released on February 1, after which we chatted with the experts about how much you should save (yes, even in the real world). this high-inflation market), where to put money, and more.


APR/Average Output

1 year CD


CD 2 years


CD 3 years


CD 4 years


CD 5 years


CD 6 months


CD 9 months


What should you use the CD for?

When it comes to saving, experts say you may have some considerations. You will need an emergency fund enough for 3-12 months necessary expense. Put it somewhere safe and easily accessible, such as a high-yield savings account. These people are now paying more than they had in a decade and You can see the best price you can get right now here.

Meanwhile, for other goals where you might need the money in 2-5 years – like buying a house – consider that “something like CDs or Treasuries… could be very profitable. than a savings account but still maintain relative safety,” says certified financial planner Zack Hhubbard at Greenspring Advisors.

Risk-averse investors or anyone looking to invest money only for a short period of time should also consider CDs, as they can be helpful in protecting principal, while still allowing money to be earned. interest. CDs are often one of the best savings tactics if you’re saving with a specific goal in mind, as you’re guaranteed to earn interest.

For those with larger cash savings accounts who want to remain prudent, but don’t mind earning a little extra interest, says Mamie Wheaton, planner LearnLux’s financial planner, said it’s worth considering a partial investment in CDs. “CD rates tend to be higher than in high-interest savings accounts because you are locking your money in for the life of the CD. Consider a CD ladder, where different amounts are due at different times,” Wheaton said.

See some of the best CD rates you can get right here.

Things to know before opening a CD

Before getting a CD, experts say it’s important to understand the terms of the deposit and make sure you don’t touch your money for any fixed amount of time you’ve agreed to to avoid penalties. You should also familiarize yourself with the early withdrawal penalty fee in case you find yourself needing to withdraw before the CD matures.

“Finding the highest rates on CDs and federally insured savings accounts can at least mitigate the effects of inflation,” said Ken Tumin, founder and editor of And, McBride added, make sure you “get it directly from a federally insured bank or credit union and fully understand the penalties for early withdrawals,” says McBride.

The advice, recommendations or ratings expressed in this article are those of MarketWatch Picks and have not been reviewed or endorsed by our trading partners.


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