CD rates are rising again in late 2026, and some of the highest available yields are now approaching the closely watched 5% APY level.

As of September 29, 2026, NerdWallet’s current CD survey lists a top rate of 4.95% APY on a five-year CD, while competitive one-year CDs are around 4.40% and three-year CDs can reach approximately 4.80%.

The increase follows the Federal Reserve’s September 16 decision to raise the federal funds target range by 0.25 percentage point to 3.75%–4.00%. The Fed said inflation remained elevated and tighter policy would support a return toward its 2% inflation goal.

Banks and credit unions do not have to raise CD rates whenever the Federal Reserve raises rates.

But the federal funds rate strongly influences the short-term interest-rate environment, and competitive CD rates have already been moving higher.

NerdWallet reports that top CD yields moved from roughly the low-to-mid 4% range earlier in 2026 into the mid-to-high 4% range by September, with many institutions raising rates during recent months.

So should savers lock in a CD now, wait for a possible 5% rate, or keep their money in a high-yield savings account?

Here is what current CD rates, the Fed hike and the math suggest.

What Are CD Rates Right Now?

Competitive online-bank and credit-union CD rates are significantly higher than national-average CD yields.

As of September 29, 2026, some leading rates include approximately:

CD Term	Competitive Top APY
3 months	4.25%
6 months	4.30%
1 year	4.40%
3 years	4.80%
5 years	4.95%

These are examples from NerdWallet’s current nationwide survey and can change at any time.

Bankrate’s September survey likewise shows many competitive CDs paying above 4%, although national averages remain much lower.

That gap makes comparison shopping especially important.

Your local bank might offer a 1-year CD paying around 2%, while an online bank or credit union could potentially offer more than 4%.

Can You Get a 5% CD in 2026?

Rates are extremely close.

The highest rate in NerdWallet’s September 29 survey was 4.95% APY, only:

5.00% − 4.95% = 0.05 percentage point

below 5%.

Some promotional, regional, credit-union or limited-eligibility certificates may occasionally reach 5% or more.

However, consumers should be careful with any headline advertising an unusually high CD APY.

Always check:

• Term length
• Minimum deposit
• Maximum eligible balance
• Membership requirements
• Promotional conditions
• Early-withdrawal penalty
• Whether the institution is federally insured

A 5% headline rate is not necessarily better than a 4.7% CD with more flexible conditions.

Why Are CD Rates Going Up?

The biggest recent factor is the change in Federal Reserve policy.

On September 16, the Fed raised its target range to:

3.75%–4.00%.

Higher short-term interest rates raise the cost of money throughout the banking system.

Banks that want additional deposits may respond by paying savers more.

Certificates of deposit are especially useful to banks because customers agree to leave their money deposited for a defined period.

That makes CD funding relatively predictable.

The Fed Does Not Directly Set CD Rates

The Federal Reserve does not announce:

“One-year CDs must now pay 4.5%.”

Each bank and credit union decides what it will offer.

CD pricing depends on several factors:

• Federal Reserve policy
• Deposit competition
• Bank funding needs
• Expected future interest rates
• Treasury yields
• Loan demand
• CD term

That is why one institution may offer a 4.5% CD while another offers only 2%.

For a broader explanation of how September’s rate increase affects consumers, read our Fed rate hike 2026 guide.

Are CD Rates Still Rising?

Recent data indicate that many competitive CD rates have been moving higher.

NerdWallet reports that rate increases accelerated during summer 2026 and continued after the September Fed meeting.

Examples cited in its September survey include rate increases at multiple banks and credit unions during August and September.

The same source says the best CD rates moved from roughly 3.50%–4.30% earlier in its summer listings to approximately 3.75%–4.95% in September.

That does not guarantee rates will continue rising.

But the direction has clearly changed from earlier periods when CD yields were falling.

Will CD Rates Go Higher in 2026?

They could, but there is no guarantee.

Future CD rates will depend partly on what happens to:

• Inflation
• Federal Reserve policy
• Economic growth
• Bank deposit demand
• Market interest rates

If inflation remains elevated and the Fed raises rates again, banks may continue increasing CD yields.

If inflation weakens or markets begin expecting future rate cuts, CD rates could stabilize or fall.

NerdWallet’s current forecast says CD rates have been moving upward following the September Fed increase and could see additional increases, while acknowledging that future rates remain uncertain.

No one can confirm whether the best CD rate will reach exactly 5%, 5.25% or another number.

Consumers should therefore avoid building a savings strategy around an exact forecast.

Should You Wait for a 5% CD?

This is where the math becomes useful.

Suppose you have:

$10,000

and you can open a 1-year CD paying:

4.40% today

but you are considering waiting several months in hopes of finding:

5.00%.

The difference over a full year would be approximately:

At 4.40%:

$10,000 × 0.044 = $440

At 5.00%:

$10,000 × 0.05 = $500

Difference:

$60

That means waiting several months solely for an additional 0.60 percentage point may not necessarily produce more total interest.

During the waiting period, your money might earn less elsewhere.

This is sometimes called reinvestment or timing risk.

You could wait for better rates that never arrive while giving up today’s available yield.

How Much Can You Earn With a CD?

Consider a $10,000 deposit.

Approximate earnings over one year at different APYs are:

APY	Approx. 1-Year Interest on $10,000
3.00%	$300
4.00%	$400
4.40%	$440
4.50%	$450
4.95%	$495
5.00%	$500

These simplified examples assume the stated APY applies for the full period.

Because APY incorporates compounding, actual account calculations may differ slightly depending on term and account structure.

How Much Does $25,000 Earn at 5%?

At a 5% APY:

$25,000 × 0.05 = $1,250

Approximate one-year earnings:

$1,250

At 4.5%:

$25,000 × 0.045 = $1,125

Difference:

$125

Again, the rate matters more as the deposit becomes larger.

How Much Does $50,000 Earn at 5%?

At 5%:

$50,000 × 0.05 = $2,500

At 4.5%:

$50,000 × 0.045 = $2,250

Difference:

$250

A half-percentage-point rate difference matters, but it should still be weighed against:

• Term
• Liquidity
• Penalties
• Minimum deposit
• Institution safety

What Is a Certificate of Deposit?

A certificate of deposit, or CD, is a savings product offered by banks and credit unions.

You agree to leave money deposited for a specified period.

Examples include:

• 3 months
• 6 months
• 1 year
• 18 months
• 2 years
• 5 years

In exchange, the institution generally pays a fixed interest rate.

The Consumer Financial Protection Bureau explains that withdrawing from a traditional CD before its maturity date usually results in an early-withdrawal penalty.

This is the central trade-off:

You receive rate certainty in exchange for giving up some liquidity.

Are CD Rates Fixed?

Traditional CDs generally lock their interest rate when the account is opened and funded.

If you open a:

1-year CD at 4.40% APY

and market CD rates later drop to:

3.50%

your traditional fixed CD generally continues paying its contracted rate until maturity.

This can make CDs attractive when savers believe interest rates may fall.

However, if market rates rise to 5%, you are still locked into 4.40% unless the CD has special features or you withdraw and pay any applicable penalty.

CD vs High-Yield Savings Account

This is one of the most important savings comparisons in 2026.

Competitive high-yield savings accounts are currently around the 4% range, while some CD yields are approaching 5%.

Read our full guide to high-yield savings account rates in 2026 for current HYSA details.

Here is the basic difference:

Feature	CD	High-Yield Savings
Rate	Usually fixed for term	Variable
Access	Restricted until maturity	Generally easier
Early withdrawal	Often penalty	Usually no term penalty
Rate can fall	Not on traditional fixed CD	Yes
Best for	Known future goal	Emergency/accessible savings

When a CD May Make More Sense

A CD may be attractive if:

• You already have an emergency fund.
• You will not need the money during the CD term.
• You want to lock in today’s rate.
• You are saving for a purchase on a known date.

When a HYSA May Make More Sense

A high-yield savings account may be preferable if:

• You may need the money unexpectedly.
• It is part of your emergency fund.
• You want ongoing flexibility.
• You expect rates to rise substantially.

There is no requirement to choose only one.

Many savers use both.

CD vs High-Yield Savings Example

Imagine you have:

$20,000

A CD offers:

4.80% fixed

A HYSA offers:

4.00% variable

If both rates remained unchanged for one year:

CD:

$20,000 × 0.048 = $960

HYSA:

$20,000 × 0.04 = $800

Difference:

$160

But the savings-account rate could change.

And the savings account allows easier access.

The better choice depends on whether that additional $160 is worth giving up liquidity.

What Is a CD Ladder?

A CD ladder divides money across CDs with different maturity dates.

For example, instead of putting $20,000 into one five-year CD, you might divide it into:

• $4,000 in a 1-year CD
• $4,000 in a 2-year CD
• $4,000 in a 3-year CD
• $4,000 in a 4-year CD
• $4,000 in a 5-year CD

Each year, one CD matures.

You can then:

• Spend the money
• Move it to savings
• Reinvest in a new CD

A ladder can provide more regular access while still allowing portions of your savings to earn fixed rates.

Is a CD Ladder Good When Rates Are Rising?

A CD ladder can reduce the risk of locking all of your money at today’s rate just before rates rise further.

Suppose you put everything into a five-year CD today.

If rates rise substantially next month, all your money remains locked at the older rate.

With a ladder, only part of your money is locked for long periods.

Other portions mature sooner and can potentially be reinvested at higher rates.

The trade-off is that short-term rates can also fall by the time those CDs mature.

Short-Term vs Long-Term CDs in 2026

Historically, longer-term CDs often paid higher rates because depositors committed money for longer.

That relationship is not always true.

Current competitive rates vary significantly by institution and term.

As of September 29, NerdWallet’s survey shows examples including:

• 3-month: around 4.25%
• 6-month: around 4.30%
• 1-year: around 4.40%
• 3-year: up to 4.80%
• 5-year: up to 4.95%

This current structure makes longer-term CDs more attractive at certain institutions.

However, a five-year CD also creates much greater liquidity risk.

Do not select a term solely because it has the highest advertised APY.

Should You Choose a 1-Year or 5-Year CD?

Consider your expected use of the money.

A 1-Year CD May Make Sense If:

• You need the money relatively soon.
• You think rates could rise.
• You want more flexibility.
• You are saving for a short-term purchase.

A 5-Year CD May Make Sense If:

• You do not need the money.
• The long-term APY is attractive.
• You want protection against future rate cuts.
• You understand the withdrawal penalty.

The longest term is not automatically the best.

What Is a No-Penalty CD?

A no-penalty CD allows qualified withdrawals before maturity without a traditional early-withdrawal penalty.

These products can offer greater flexibility.

The trade-off is that no-penalty CDs may pay less than traditional CDs.

Read the account terms carefully because restrictions may still apply, including:

• Waiting periods before withdrawal
• Full-balance withdrawal requirements
• Limits on partial withdrawals

What Is a Bump-Up CD?

A bump-up CD may allow the saver to request a higher rate during the term if the bank’s eligible CD rates rise.

For example:

You open at:

4.00%

Later the bank’s qualifying rate rises to:

4.50%.

If the CD permits a bump-up, you may be able to request the higher rate.

These products can be attractive when rates are rising, but they may start with lower yields than traditional CDs.

What Is a Jumbo CD?

A jumbo CD generally requires a large deposit, often:

$100,000 or more.

But there is no universal definition.

A large minimum balance does not automatically guarantee a better interest rate.

Compare the APY with normal CDs before assuming the “jumbo” label creates better value.

Are CDs FDIC-Insured?

CDs held at an FDIC-insured bank are covered deposit products.

The standard FDIC insurance limit is:

$250,000 per depositor, per insured bank, per ownership category.

Credit-union share certificates may instead be insured through the National Credit Union Administration.

The CFPB notes that bank CDs and qualifying credit-union certificates can receive federal insurance up to applicable limits.

Always verify the institution rather than assuming a product is insured because it appears online.

Can You Lose Money in a CD?

A traditional federally insured CD is designed to preserve principal within insurance limits if held according to the account terms.

However, there are scenarios where you can effectively lose money or purchasing power.

Early Withdrawal Penalty

Some penalties can reduce earned interest.

Certain CD contracts can potentially impose penalties large enough to reduce principal.

Inflation

If your CD earns:

4%

while inflation averages:

5%

your dollar balance grows, but its purchasing power may decline.

Deposits Above Insurance Limits

Uninsured balances can carry additional risk if a financial institution fails.

How Do Early Withdrawal Penalties Work?

The CFPB says early withdrawal from a CD generally results in a penalty.

Banks set their own penalty schedules.

Examples might include:

• 90 days of interest
• 180 days of interest
• 12 months of interest
• A larger penalty for longer terms

Before opening a CD, ask:

“What would it cost me if I needed all of this money tomorrow?”

That question is often more important than a small APY difference.

Example of an Early Withdrawal Penalty

Imagine:

Deposit:

$20,000

CD APY:

4.5%

Potential annual interest:

$900

If the early-withdrawal penalty equals six months of interest, a simplified estimate could be around:

$450

That penalty can quickly erase the advantage of choosing a CD over a more flexible savings account.

Are CD Rates Taxable?

Generally, yes.

The IRS treats interest from certificates of deposit as taxable interest income.

For longer-term CDs, interest may need to be reported during the year it is credited or becomes available under applicable tax rules, even if the CD has not yet matured.

Tax situations vary, so consult current IRS guidance or a tax professional for individual circumstances.

Should You Open a CD After the Fed Rate Hike?

A CD can be worth considering when:

• You have cash you do not need immediately.
• The rate is competitive.
• You want a guaranteed return.
• You understand the penalty.
• The maturity date matches your financial goal.

It may be less appropriate when:

• The money is your entire emergency fund.
• You expect to need it soon.
• You have expensive credit-card debt.
• The CD has an unusually severe penalty.

If you are carrying a credit card charging 20% or more, earning 4.5% in a CD generally does not offset that much higher borrowing cost.

Is Now a Good Time to Lock a CD Rate?

Late 2026 presents an unusual situation.

Competitive rates are rising following the Fed’s September increase, and some yields are approaching 5%.

That creates two competing risks.

Risk 1: Lock Too Early

You open a 4.5% CD.

Rates later reach 5%.

Risk 2: Wait Too Long

You wait for 5%.

Economic conditions change.

Rates fall back toward 4%.

There is no way to guarantee the perfect timing.

One solution is to divide the money instead of making one all-or-nothing decision.

For example:

• Put part into a CD now.
• Keep part in your high-yield savings account.
• Add another CD later.

What Happens to CD Rates If the Fed Raises Rates Again?

Another Fed increase could create additional upward pressure on new CD rates.

Banks might respond by increasing yields to attract deposits.

However, the increase may not match the Fed’s move exactly.

For example:

Fed raises rates:

0.25 percentage point

Bank could raise its CD:

• 0.25%
• 0.10%
• 0%
• More than 0.25%

The bank decides.

This is why comparing institutions matters.

What Happens to CD Rates If the Fed Cuts Rates?

The opposite typically occurs.

When short-term market rates fall, banks often reduce rates offered on new CDs.

Existing traditional fixed-rate CDs normally retain their contracted rates until maturity.

That is one of the strongest reasons people lock CDs when rates are high.

If future rates fall, today’s fixed yield remains in place.

CD Rates vs Mortgage Rates

CD rates and mortgage rates both respond to the broader interest-rate environment, but they are driven by different parts of the market.

CDs are tied more closely to:

• Short-term funding conditions
• Fed policy
• Deposit competition

Thirty-year mortgages depend heavily on:

• Longer-term Treasury yields
• Inflation expectations
• Mortgage-backed securities

Mortgage rates are currently above 7%, which we explain in our guide to why mortgage rates are above 7% in 2026.

Common CD Mistakes to Avoid

Chasing APY Without Checking the Term

A 4.95% five-year CD is not automatically better than a 4.4% one-year CD.

Ignoring Early Withdrawal Penalties

A harsh penalty can erase months of interest.

Putting Your Entire Emergency Fund in a CD

Emergency savings should remain accessible.

Ignoring FDIC or NCUA Coverage

Verify that your deposits are protected.

Forgetting the Maturity Date

Many CDs automatically renew if you do not act during the grace period.

Assuming Longer Always Pays More

Rate structures change.

Compare every relevant term.

Waiting Forever for a Perfect Rate

The perfect rate may never arrive.

Evaluate today’s opportunity against your actual financial goal.

Frequently Asked Questions About CD Rates in 2026

What are CD rates today?

Competitive CD rates currently exceed 4%, with some top nationwide offers reaching approximately 4.95% APY as of September 29, 2026.

Can I get a 5% CD right now?

Top widely available rates are extremely close, with current surveys showing rates around 4.95%. Availability of 5% offers can vary by institution, term, region and eligibility.

Did CD rates rise after the September Fed hike?

Many banks and credit unions have recently increased CD rates. Current industry tracking shows a broad upward trend through late summer and September.

Will CD rates go up in 2026?

They could rise further, particularly if the Fed continues tightening, but future rates cannot be confirmed.

What is the Fed rate now?

Following the September 16 increase, the federal funds target range is 3.75%–4.00%.

What is a good 1-year CD rate in 2026?

Top nationwide one-year offers are currently around the mid-4% range, with examples around 4.40%.

What is a good 5-year CD rate?

Some leading five-year offers are currently close to 5%, although terms and minimum deposits vary.

Is 4% good for a CD?

A 4% CD is considerably above many national-average deposit rates, but competitive offers currently exceed 4% for several terms.

Should I wait for CD rates to reach 5%?

There is no guarantee they will. Compare the possible benefit of a slightly higher future rate with the interest you could earn by locking a competitive rate today.

Is a CD better than a high-yield savings account?

A CD offers a fixed rate but less liquidity. A high-yield savings account usually offers easier access but a variable APY.

Read our high-yield savings account rates guide for a deeper comparison.

Is CD interest taxable?

Generally, yes. The IRS treats CD interest as taxable interest income.

Are CDs safe?

Qualifying CDs at FDIC-insured banks receive federal deposit insurance up to applicable limits. The standard amount is $250,000 per depositor, per insured bank, per ownership category.

Can I withdraw money from a CD early?

Usually, but traditional CDs generally charge an early-withdrawal penalty.

What is a CD ladder?

A CD ladder divides savings among several CDs with different maturity dates, providing regular opportunities to access or reinvest portions of the money.

What happens when a CD matures?

The institution generally provides a grace period during which you can withdraw, transfer or renew the funds. Exact rules vary by bank.

Will another Fed hike increase CD rates?

It could put upward pressure on rates, but banks and credit unions decide their own CD yields.

CD Rates 2026: The Bottom Line

CD rates are rising again after the Federal Reserve’s September 2026 rate increase.

Top current nationwide offers are now approaching 5% APY, with NerdWallet reporting a high of approximately 4.95% as of September 29.

The Federal Reserve has raised its benchmark target range to:

3.75%–4.00%.

That can support higher deposit rates, but banks remain free to set their own CD yields.

For savers, the key decision is not simply:

“Will rates go higher?”

It is:

“When will I need this money?”

A competitive CD can make sense when:

• You have adequate emergency savings.
• The money has a known future use.
• You can leave it untouched for the entire term.
• You value locking today’s rate.

A high-yield savings account may make more sense when liquidity matters.

If you’re comparing those options, read our guide to high-yield savings account rates in 2026.

For the reason deposit rates are moving higher, continue with our Fed rate hike 2026 guide.

And if you are also navigating home financing, see why mortgage rates are above 7% in 2026.

Educational information only. This article does not constitute individualized financial, tax, banking or investment advice. Rates can change at any time. Verify current APYs, terms, penalties and insurance coverage directly with the financial institution before opening a CD.