Oct 17, 2025
While we adhere to strict editorial guidelines, partners on this page may provide us earnings.
Where do you keep your savings?
If you’re like most Americans, you might be missing out on an FDIC-insured savings vehicle that pays well above the interest rate of traditional savings accounts.
More than 82% of Americans aren’t taking advantage of savings accounts that offer a higher rate of return, according to a survey by CNBC Select and Dynata Banking Behaviors.
The same survey found that 57% of Americans put their money in traditional savings accounts, which have an average percentage yield of only 0.46%.
But if you are willing to park your money for a little over a year, you can get a rate of return over ten times higher with a certificate of deposit (CD).
What is a certificate of deposit (CD)?
A certificate of deposit (CD) is a savings product that offers a fixed interest rate for a specified period. You get a higher interest rate as a reward for that commitment. If you’re looking to earn a steady, predictable return on your savings without the risk of market volatility, a CD is for you.
According to the FDIC, the average CD pays 0.23% to 1.83% APY, depending on the term length. However, many financial institutions pay higher CD rates than the national average, sometimes starting from almost 5%. That’s more than 20 times the lowest national average. It definitely pays to shop around for the best CD rates.
With MyBankTracker you can shop and compare top certificates of deposit rates from various banks nationwide.
Their extensive database shows the most competitive rates, with daily rate updates and personalized recommendations based on your risk preferences and time horizon so you can find the right CD to meet your retirement savings goals.
Are CDs safe?
The quick answer is yes. Certificates of deposit have been offered by U.S. banks since the early 1800s, and they are still regarded as one of the safest savings options.
Unlike stocks or bonds, which can fluctuate in value, a CD offers a fixed interest rate and guarantees the return of your principal, provided you hold it until maturity.
CDs are often insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor per bank, which adds an extra layer of security. The National Credit Union Administration (NCUA) provides the same coverage for CD deposits at credit unions.
This makes a CD an attractive option for those looking to earn a predictable return at relatively low risk. All financial institutions that publicly post their CD rates and have more than $250 million in total assets are automatically listed by CD Valet.
What are the pros and cons of opening a CD?
Pros:
- Fixed predictable return: With a fixed interest rate, you know exactly how much you’ll earn over the term of the CD.
- Less stress: Since CDs are insured by the FDIC, your principal is protected up to $250,000.
- KISS (Keep it Simple and Straightforward): There are no complex strategies or market timing involved — just deposit your money and let it grow.
- Higher interest rate: MyBankTracker gives you a daily comparison of rates, ensuring you get the best possible rates on your savings.
- Prevents impulse spending: Because a CD requires you to commit to locking away funds for a set period of time, it can prevent impulse spending and help you develop a savings habit.
Cons:
- Early withdrawal penalty: The biggest drawback of a CD is that your money is locked in for the duration of the term. If you need to access your funds early, you may face penalties.
- Limited liquidity: Access to your money is significantly more limited compared to a traditional savings account.
- Opportunity cost: If interest rates rise or better investment opportunities become available, you may miss out since your money is tied up in the CD until maturity.
What to expect when your CD reaches maturity
When your CD reaches maturity, you have two options — cash out or rollover.
First, you’ll receive a statement showing your principal and the accrued interest. Most banks will also offer the option to roll over your CD into a new one, often with a new term and interest rate.
If you don’t take any action, the bank may automatically renew the CD for the same term at the prevailing interest rate. It's important to be proactive to ensure your money is working in the way you want it to.
What happens if I decide to cash out my CD early?
If you need to access your funds before the CD matures, you can usually cash it out, though this may incur an early withdrawal penalty.
This penalty can range from a few months’ worth of interest (for shorter-term CDs) to a more significant amount for longer-term CDs. The exact penalty depends on the terms of the CD.
While it’s generally not advisable to withdraw early due to the penalty, certain life circumstances may make it necessary.
Bottom line
Certificates of deposit offer a secure and reliable way to grow your savings over time, with fixed terms and guaranteed returns. However, not all CD rates are created equal, and shopping around can make a significant difference in the returns you earn.
With the best rates in the market at your fingertips, you can maximize your returns and make the most of your saving journey.
Phil is a writer at Moneywise, bringing a strong background in public relations, financial communications and copywriting. Educated in Cambridge, U.K., he has created content for several blue-chip companies, combining clarity with strategic insight.
Managing Money • 5h ago
How to put Dave Ramsey’s ‘7 Baby Steps’ into action
Investing • 5h ago
-1741291165.png)
-1697727014.jpg)
