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The interest rate offered for CDs (certificates of deposit) is low. Is there anything I can do about that?

When choosing a CD, you have many different options that can affect the interest rate. 

Generally, you may be able to get a higher interest rate by selecting a later maturity date, which means you must leave your money in the CD longer. For example, a two-year CD generally will have a higher interest rate than a six-month CD.

Another possible option is a variable-rate CD, sometimes called a “multi-step,” “bonus rate,” or “step up” CD. The interest rates on these CDs may change according to rules explained by the CD issuer. Choosing a variable-rate CD can increase or decrease your overall earnings for that CD.

“Callable CDs” may also offer higher rates. A callable CD is one in which the bank or credit union can end the CD agreement before the maturity date and return your money with the interest that has been earned to that point. Because you take some risk in not knowing whether your callable CD will reach full maturity, banks and credit unions typically offer higher rates on callable CDs than they do on other CDs. But, if the bank or credit union decides to “call” your CD early, you may be forced to withdraw your money or to reinvest in a product with a lower rate. The CD agreement will indicate whether or not your CD is callable.

The CD with the highest rate may not always be the best fit for your needs. You should look closely at the different terms to see what type of CD might be right for you.


If you are flexible about how long you can leave your money in the CD, ask if there are any promotional rates. Some banks and credit unions offer a promotional rate for a certain length of CD. If you pick the promotional CD, you may get a higher interest rate.