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What are you deciding?
When the Fed raises rates, the CD you already own can start to feel like a mistake. Whether it is one comes down to arithmetic you can finish in two minutes: what leaving costs, against what the new rate earns in the months you have left.
Should I lock in a CD now or wait for rates to rise more?
Nobody can say where rates go next, so ask how much higher a later rate would need to be before waiting beats locking today. The Federal Reserve raised its target range on September 16, 2026.1 The top CD APY across terms in our snapshot is 4.95%, against a national 12-month average of 1.71%.
Switch the calculator to Lock now or wait. It starts with the later CD APY set equal to today's, meaning no change expected. Raise it to see what your own guess is worth in dollars.
Here is a hypothetical. You have $10,000 and can lock a 12-month CD at 5.00 percent today, or hold it in savings at 4.00 percent for three months first. If you assume a later CD rate of 5.50 percent, waiting comes out about $50 ahead. If the later rate is 4.50 percent, locking now comes out about $50 ahead. The swing is about $50 either way, so your guess about the later rate has to be a confident one to justify the wait.
Should I break my CD for a higher rate?
Break it only when the replacement APY is above your break-even APY, and the size of that gap sets your gain. Hold it if the replacement falls short.
Break-even depends on three things: how much interest the penalty costs, how many months remain, and how long the new CD runs. Take a hypothetical $25,000 in a CD at 3.00 percent APY with 18 months left and a penalty of six months of interest, which is $375. The replacement has to pay about 3.98 percent APY to break even. At 4.50 percent, breaking pays about $198 more than holding.
With only 3 months left and the same penalty, the break-even climbs to about 9.27 percent APY, far above the top CD rate in our snapshot, 4.95%. A new rate needs time to earn back the penalty. The chart in the calculator shows it: the break line starts below zero by the penalty and has to catch up.
One check before you break: if the penalty is larger than the interest your CD has earned so far, ask your bank whether the shortfall comes out of principal. Get the answer in writing.
What does a short CD ladder do when rates are rising?
A short ladder gives you a maturing rung every few months, so you can re-lock at whatever rate is on offer then without paying a penalty. The short rungs may start at a lower rate than one long CD.
Here is a three-rung ladder on the same amount, with one rung maturing every four months. Each maturity lets you buy whatever rate is then on offer.
- Rung 14 mo
- Rung 28 mo
- Rung 312 mo
Three horizontal bars show CD terms of 4, 8 and 12 months, so a rung matures every four months.
The full build, with rung sizes and costs, is in the CD ladder blueprint. For the penalty mechanics and the break-even formula in depth, see CD anatomy and the early withdrawal penalty.
Are bump-up and no-penalty CDs worth it?
They can be, if you value the exit or the raise more than the lower starting rate. Our rate data does not rank those variants by APY, so compare their terms directly.
A bump-up CD lets you raise your rate if the bank raises its offer. A no-penalty CD lets you leave for a better rate, often after an initial waiting period. Read the bump-up and add-on CD guide and the no-penalty CD guide before you pay for either feature.
Below are the top standard CD offers in our current data, for the baseline you are comparing against.
What happens to the penalty at tax time?
You can generally deduct the penalty, which softens the cost of breaking a CD. It is reported in box 2 of Form 1099-INT and deducted on Schedule 1.2 You do not need to itemize.
The calculator leaves taxes out, so the after-tax cost of breaking is somewhat lower than it shows. This is general information, not tax advice.
What should I do next?
Put your own numbers in the calculator, then check the maturity date on any CD you own. Our CD maturity decision tool walks through what to do when one comes due, and saved CD alerts can warn you before it does.
If your savings account has not moved since the Fed acted, see did your bank pass on the rate hike. The Fed hike tracker shows the decision in context. If you decide to move your savings to a better rate, the bank switching checklist covers the order of steps.