Savers looking to maximize their earnings can currently secure competitive certificate of deposit rates, with the highest CD rate standing at 4% APY as of February 15, 2026. Marcus by Goldman Sachs is offering this top rate on its one-year CD, according to recent market data. While CD rates have remained attractive for savers, the traditional relationship between CD term length and interest rates has inverted in today’s economic environment.
Historically, longer-term certificates of deposit offered higher yields than shorter-term options, as banks incentivized customers to commit their funds for extended periods. However, current market conditions have reversed this pattern, with shorter-term CDs now frequently offering more competitive rates than their longer-term counterparts.
Understanding CD Interest Earnings
The amount savers can earn from a certificate of deposit depends primarily on the annual percentage yield, which accounts for both the base interest rate and the compounding frequency. Most CDs compound interest either daily or monthly, affecting the total return on investment.
For example, depositing $1,000 in a one-year CD with 1.61% APY and monthly compounding would yield a final balance of $1,016.22, generating $16.22 in interest. In contrast, the same deposit in a CD offering 4% APY would grow to $1,040.74, earning $40.74 in interest over the same period.
Additionally, larger deposits significantly amplify earnings potential. A $10,000 deposit in a one-year CD at 4% APY would mature at $10,407.42, producing $407.42 in interest income. This demonstrates how higher principal amounts combined with competitive CD rates can substantially boost savings growth.
Types of Certificates of Deposit Beyond Traditional Options
While interest rates remain a primary consideration, various CD products offer different features that may suit specific financial needs. Bump-up CDs allow account holders to request a rate increase if the financial institution raises its rates during the term, though this option is typically limited to a single adjustment.
Meanwhile, no-penalty CDs, also called liquid CDs, provide flexibility by allowing early withdrawals without incurring penalty fees. This feature can be valuable for savers who want competitive rates but may need access to their funds before maturity.
Jumbo CDs require substantially higher minimum deposits, usually $100,000 or more, and traditionally offered premium interest rates in exchange. However, in the current rate environment, the difference between traditional and jumbo CD rates has narrowed considerably, making jumbo products less advantageous than in previous years.
Alternative CD Products and Considerations
Brokered CDs represent another option, purchased through brokerages rather than directly from banks. These products can sometimes offer higher rates or more flexible terms compared to bank-issued CDs. However, they carry additional risks and may not always include FDIC insurance protection, requiring careful evaluation before investment.
When comparing CD options, financial experts recommend examining factors beyond the advertised rate, including early withdrawal penalties, minimum deposit requirements, and compounding frequency. These elements can significantly impact the actual returns savers receive upon maturity.
The inverted yield curve affecting CD rates reflects broader economic expectations and Federal Reserve monetary policy. Shorter-term rates remaining elevated while longer-term rates decline suggests market anticipation of potential future rate decreases, influencing how banks structure their deposit product offerings.
As economic conditions continue to evolve, CD rates may adjust in response to Federal Reserve policy decisions and inflation trends. Savers should monitor rate changes regularly and consider whether locking in current rates aligns with their financial goals and liquidity needs.
