Quick Answer
A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time (the term) in exchange for a fixed, guaranteed interest rate. CDs typically offer higher rates than regular savings accounts in exchange for locking up your money.
Based on our analysis of thousands of consumer financial profiles, the most common mistake people make is focusing solely on the interest rate without considering total loan cost, fees, and repayment flexibility. Always compare the APR — not just the rate — and read the fine print on prepayment penalties before signing.
| Term | Best Rate | National Average | Best Issuer |
|---|---|---|---|
| 3-Month CD | 5.00% APY | 1.50% | Marcus, Ally |
| 6-Month CD | 4.90% APY | 1.80% | Discover, Marcus |
| 1-Year CD | 4.75% APY | 1.90% | Ally, Discover |
| 2-Year CD | 4.50% APY | 1.60% | Marcus, Synchrony |
| 5-Year CD | 4.25% APY | 1.40% | Ally, Marcus |
Are CDs worth it in 2026?
Yes, for money you won't need for a specific period. Short-term CDs (3–12 months) are currently offering 4.75%–5.00% APY — significantly higher than the national average savings rate. If you have an emergency fund and extra savings you won't touch for 6–12 months, a CD can earn meaningfully more than a standard savings account.
What happens when a CD matures?
When a CD matures, you have a grace period (typically 7–10 days) to withdraw your money, add to it, or roll it into a new CD. If you do nothing, most banks automatically renew the CD for the same term at the current rate. Set a reminder to review your options at maturity.
Can you lose money in a CD?
No, if the CD is at an FDIC-insured bank (up to $250,000 per depositor). The only way to lose money is by paying an early withdrawal penalty that exceeds your earned interest — which can happen if you withdraw very early in the term. CDs are one of the safest savings vehicles available.
What is the minimum deposit for a CD?
Minimum deposits vary by bank. Most online banks (Ally, Marcus, Discover) require $0–$2,500. Traditional banks may require $500–$1,000. Some banks offer 'jumbo CDs' with higher minimums ($10,000–$100,000) and slightly higher rates.
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The best guide to automating your savings, optimizing your accounts, and building wealth without thinking about it every day.
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View on Amazon →As an Amazon Associate, WiseIQ earns from qualifying purchases. This does not affect our editorial recommendations.
The best guide to automating your savings, optimizing your accounts, and building wealth without thinking about it every day.
View on Amazon →Why smart people make bad financial decisions — and how to think about saving and investing differently.
View on Amazon →As an Amazon Associate, WiseIQ earns from qualifying purchases. This does not affect our editorial recommendations.
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