How Are CD Interest Rates Determined?

How Are CD Interest Rates Determined?: A Certificate of Deposit (CD) is essentially an agreement between you and your bank. You agree to deposit your money for a fixed amount of time and, in return, the bank guarantees you a specific CD interest rate. Of course, Discover Bank understands that your financial needs may be complex and subject to change, so we offer a wide range of CDs with terms and interest rates designed to help you succeed. Whether you use a single Discover CD to pursue your goals or several of them, you’ll find the flexibility, liquidity, and great rates your situation demands.

Discover Bank is available nationwide. See below for the How Are CD Interest Rates Determined.

Editor’s Note: Choosing Discover Bank is a smart choice whether you’re banking online or looking for the best return rates. See our full list of Discover Bank Deals, Bonuses, Rates, and Promotions where you can earn a $100 savings bonus and up to 2.20% APY Rate.

How Are CD Interest Rates Determined?

CD interest rates are typically determined by three factors:

• The length of time until your CD matures (typically, anywhere from 3 months to 10 years).
• The current interest rate environment (e.g., how much other banks are willing to pay on deposits).
• The expected rate of return (how much your bank anticipates it can earn with the money you have deposited.

Getting Higher Interest Rates

In most cases, you’ll receive higher CD interest rates if you increase the length of time your funds remain on deposit or increase the amount of your deposit. When you save with Discover CDs, those rates are always guaranteed, regardless of your account balance or term.

Here are some basic guidelines to follow when choosing the term of your CD:

• Determine how long you are willing to leave your money untouched. Look for the best CD interest rates available within this timeframe.
• If interest rates are expected to rise in the near future, consider a shorter-term CD so that you’re not locked into low yields while rates increase.
• If CD interest rates are flat or expected to decline, consider choosing a longer-term CD to lock in a better rate.

Be Aware of Penalties

CDs typically come with early withdrawal penalties, which can wipe out returns on even the best CD interest rates if you need to take the money out before the term is up. So, make sure the maturities you select work with your cash needs. With Discover CDs, that’s easy to do. And don’t forget that Discover Money Market and Online Savings Accounts also make saving for the future easy and affordable. Their low initial deposit requirements, easy access, and highly competitive rates make either type of Discover account a smart choice for a variety of important savings goals.

Discover Bank Online App

•  All your banking, in your pocket or purse. Download the Discover Bank Online App today via iOS or Android.

Still Have Questions?

•  Reach someone helpful 24/7. Call 1-800-347-7000! Ask to be connected with the Discover Bank Online Security Center.

Author’s Verdict

Ever wondered how CD rates are determined? Hopefully this How Are CD Interest Rates Determined? post helped you answer those questions! Let us know if it did in the comment section below or help add onto our list! Let us know about your thoughts and experience with Discover Bank Online in the comment section below! If you’re interested in more info regarding Discover Bank Online offers, check out our full listing of Discover Bank Online Bank Deals, Offers, Bonuses, and Promotions. Be sure to check back on BankDealGuy for more bank deals! How Do I Dispute A Transaction FAQs 

• Available nationwide online • Earn high yields with flexible access to your cash. • Earn 3.65% APY balances $100,000 and over • Earn 3.60% APY balances under $100,000 • No hidden fees. No surprises. • Easy cash access via debit or check, or via ATM at over 60,000 no-fee ATMs • Get started and open a Discover Money Market Account in 3 easy steps. Apply Now at Discover