National average CD rates today
The FDIC publishes national average deposit rates every month, calculated from the rates offered by thousands of US banks and credit unions. The averages are low because large branch banks pay very little; online banks and credit unions usually pay two to three times the average. Latest figures, September 2026:
| Term | National average APY | A year earlier | Change | Last 5 years |
|---|---|---|---|---|
| 3 months | 1.13% | 1.55% | −0.42 | |
| 6 months | 1.41% | 1.60% | −0.19 | |
| 1 year | 1.73% | 1.70% | +0.03 | |
| 2 years | 1.61% | 1.46% | +0.15 | |
| 3 years | 1.36% | 1.33% | +0.03 | |
| 4 years | 1.28% | 1.26% | +0.02 | |
| 5 years | 1.38% | 1.34% | +0.04 | |
| Savings account | 0.37% | - | - |
Source: FDIC national rates, via the Federal Reserve Bank of St. Louis (FRED). Updated automatically.
How CD interest is calculated
Banks quote CDs by APY, the annual percentage yield, which already includes compounding. For a deposit P, an APY and a term of t years:
Value at maturity = P × (1 + APY)^t
APY = (1 + APR ÷ n)^n − 1 (n = compounding periods per year)
A $10,000 one-year CD at 4.00% APY pays exactly $400. The same 4.00% quoted as an APR compounded daily is a 4.08% APY and pays $408. If your bank quotes the interest rate rather than the APY, choose the matching option above.
Tax and inflation
CD interest is taxed as ordinary income in the year it is credited, even if you leave it in the CD, and your bank sends a Form 1099-INT. That is why the calculator shows interest after federal and state tax. Treasury bills pay similar rates and are exempt from state and local income tax, which makes them better value in high-tax states. Held in an IRA, CD interest is tax-deferred or, in a Roth IRA, tax-free.
The real return is what the CD adds to your buying power once tax and inflation are taken out. When it is negative, the CD is still protecting your money from market losses, but not from rising prices.
Early withdrawal penalties
Breaking a CD before it matures usually costs a set number of months of interest. A common schedule is 3 months of interest on terms up to a year, 6 months on terms up to 5 years and 12 months on longer terms, but it varies widely and some banks charge more. If you withdraw early in the term, the penalty can be larger than the interest earned so far and eat into your deposit. "No-penalty" CDs avoid this in exchange for a slightly lower rate.
Why build a CD ladder
A ladder spreads money across several maturities so part of it becomes available every year, while most of it earns long-term rates. If rates rise, each maturing rung renews at the higher rate; if they fall, the longer rungs keep their rates. After the first five years every rung is a 5-year CD, and one still matures each year.
How safe is a CD?
CDs at FDIC-insured banks, or NCUA-insured credit unions, are protected up to $250,000 per depositor, per bank, per ownership category, so a joint account covers up to $500,000. Brokered CDs bought through a brokerage account are also FDIC-insured but can lose value if sold before maturity when rates have risen.