When it comes to growing your savings, one option to consider is locking in a high Certificate of Deposit (CD) rate. By investing in a CD, you can secure a competitive rate and watch your balance grow over time. However, with rates varying widely among financial institutions, it’s crucial to shop around for the best offer available.
Historically, longer-term CDs used to offer higher interest rates compared to shorter-term CDs. This was done to incentivize savers to keep their money deposited for a longer period. However, in today’s economic climate, the opposite holds true.
As of February 15, 2026, the highest CD rate available is 4% APY, offered by Marcus by Goldman Sachs on their 1-year CD.
The amount of interest you can earn from a CD is determined by the Annual Percentage Yield (APY). APY takes into account the base interest rate and how often interest compounds. Typically, CD interest compounds daily or monthly.
For example, if you invest $1,000 in a one-year CD with a 1.61% APY and monthly compounding, your balance would grow to $1,016.22 at the end of the year, including $16.22 in interest. Opting for a one-year CD with a 4% APY would increase your balance to $1,040.74, with $40.74 in interest.
The more you deposit in a CD, the more you can potentially earn in interest. For instance, with a one-year CD at 4% APY and a $10,000 deposit, your total balance at maturity would be $10,407.42, resulting in $407.42 in interest.
When selecting a CD, the interest rate is a key factor to consider. However, there are various types of CDs available that offer different benefits. While some may offer slightly lower interest rates, they provide added flexibility. Here are some common types of CDs to consider:
– Bump-up CD: Allows you to request a higher interest rate if the bank’s rates increase during the term.
– No-penalty CD: Also known as a liquid CD, it allows you to withdraw funds before maturity without penalties.
– Jumbo CD: Requires a higher minimum deposit and may offer higher interest rates.
– Brokered CD: Purchased through a brokerage, offering potentially higher rates but with added risks.
In conclusion, investing in a CD can be a smart way to grow your savings. By comparing rates and exploring different CD options, you can find the best offer that suits your financial goals.
