A certificate of deposit (CD) enables savers to lock in a competitive interest rate, allowing their balance to grow over a fixed term. However, rates vary widely across financial institutions, making it important to compare offers carefully when shopping for a CD. Unlike high-yield savings accounts, where the rate can fluctuate at any time, a CD guarantees the stated APY for the entire term, which is why term length matters so much when evaluating offers.

Overview of CD Rates Today

Historically, longer-term CDs offered higher interest rates than shorter-term CDs, as banks incentivized savers to keep funds on deposit for extended periods. In today's economic climate, however, the opposite holds true: shorter-term CDs tend to offer higher yields. CD rates are influenced by broader interest rate conditions, including the federal funds rate set by the Federal Reserve, and the current inverted structure — where short-term yields exceed long-term ones — reflects prevailing monetary policy dynamics.

As of Sunday, August 9, 2026, the highest CD rate available is 4.35% APY, offered by United Bank on its 18-month CD.

How Much Interest Can You Earn with a CD?

The interest earned on a CD depends on the annual percentage yield (APY), which measures total earnings over one year by factoring in the base interest rate and the frequency of compounding. CD interest typically compounds daily or monthly.

For example, a $1,000 deposit in a one-year CD with a 1.52% APY compounding monthly would grow to $1,015.20 at the end of the term — the original $1,000 deposit plus $15.20 in interest.

By contrast, a one-year CD offering 4% APY would grow a $1,000 deposit to $1,040.74 over the same period, yielding $40.74 in interest. Scaling up the deposit increases earnings proportionally: a $10,000 deposit in a one-year CD at 4% APY would mature at $10,407.42, generating $407.42 in interest.

Types of CDs

While the interest rate is typically the primary consideration when selecting a CD, it is not the only factor. Several types of CDs offer different benefits, though some may require accepting a slightly lower rate in exchange for greater flexibility. Beyond traditional CDs, the following options are commonly available:

• Bump-up CD: This type allows account holders to request a higher interest rate if their bank raises rates during the term. However, the rate adjustment is usually permitted only once.
• No-penalty CD: Also known as a liquid CD, this type permits withdrawals before maturity without incurring an early withdrawal penalty.
• Jumbo CD: These CDs require a higher minimum deposit — typically $100,000 or more — and often offer a higher interest rate in return. In the current rate environment, however, the difference between traditional and jumbo CD rates may be modest.
• Brokered CD: These CDs are purchased through a brokerage rather than directly from a bank. Brokered CDs can sometimes offer higher rates or more flexible terms, but they also carry additional risk and may not be FDIC-insured.

Traditional CDs held at FDIC-member banks are insured up to $250,000 per depositor, per institution, which is a key reason they remain a popular vehicle for capital preservation. However, withdrawing funds from a traditional CD before maturity typically triggers an early withdrawal penalty, which can reduce earned interest or, in some cases, dip into principal.

CD Rate Highlights for August 2026

Based on factors including interest rates and fees, the following standout CD offers have been identified across key terms:

• Best overall CD rates for August 2026: Top picks across 6-month, 1-year, 18-month, and 2-year terms offer yields up to 4.25% APY.
• Best 1-year CD rates for August 2026: Available rates reach up to 4.1% APY for a 12-month commitment.
• Best 18-month CD rates for August 2026: 18-month CDs, which balance solid returns with moderate flexibility, offer yields up to 4.25% APY.
• Best 6-month CD rates for August 2026: Short-term 6-month CDs offer rates up to 4.15% APY, allowing savers to lock in a guaranteed return without an extended commitment.

CD rates can shift as banks adjust their deposit pricing in response to changing rate conditions, so offers available today may differ from those available in the coming weeks. Whether a certificate of deposit is a suitable investment depends on an individual's timeline and financial goals.