According to Yahoo Personal Finance, the highest CD rate available as of September 20 stands at 4.40% APY. That yield is being offered by Happen Bank on its 2-year certificate of deposit (CD).
The report says longer-term CDs have historically paid more than shorter-term products, as banks typically rewarded savers for leaving funds on deposit for longer periods. In the current environment, however, that pattern has shifted, with some short- and medium-term offers now outpacing longer maturities.
How CD earnings are calculated
Returns on a CD depend on the APY, or annual percentage yield, which reflects not only the stated interest rate but also how often interest is compounded. In most cases, CD interest compounds daily or monthly.
For example, if $1,000 is placed in a 1-year CD paying 1.52% APY with monthly compounding, the balance would grow to $1,015.20 after one year. That includes $15.20 in interest earnings.
At 4% APY, the same $1,000 deposit in a 1-year CD would grow to $1,040.74 over the same period, including $40.74 in interest. If the deposit were $10,000 at the same 4% APY, the balance at maturity would reach $10,407.42, meaning total interest earned would be $407.42.
Main types of CDs
The article notes that rate is not the only factor savers should consider. Different CD structures offer varying levels of flexibility and may suit different savings goals.
Bump-up CD — lets the depositor request a higher rate if the bank raises its CD yields during the term, though that option is typically available only once.
No-penalty CD — also known as a liquid CD, this product allows funds to be withdrawn before maturity without a penalty.
Jumbo CD — requires a larger minimum deposit, usually $100,000 or more, and often pays a higher rate, although the gap versus traditional CDs may currently be limited.
Brokered CD — is purchased through a brokerage rather than directly from a bank. These CDs can sometimes offer better yields or more flexible terms, but they may also carry additional risk and are not always FDIC-insured.
The report adds that CDs remain a relevant option for savers looking to lock in a fixed return and preserve predictability through maturity. The best choice depends on the investor’s time horizon, deposit size and need for access to funds before the term ends.
