Usually, you can only bump up the interest rate once during the term. Bump-up CD: A bump-up CD gives you the option to request an increase in your interest rate if market rates rise during your CD's term.This flexibility can be appealing to savers who want access to their money but still want to earn a higher interest rate compared to a regular savings account. No-penalty CD: A no-penalty CD allows you to withdraw your funds, including interest, before the CD's maturity date without incurring penalties.Traditional CD: This is the standard type of CD where you deposit a sum of money for a specific term and receive a fixed interest rate for the duration.Here are some of the most common types of CDs available:

When choosing a CD, you may come across different options with special features. APY is an important metric when considering CD accounts because it provides a more accurate picture of your potential earnings than the nominal or stated interest rate. What does APY mean on a CD?ĪPY stands for Annual Percentage Yield, and it represents the total interest you can earn on a CD over the course of a year when taking into account compounding. If you withdraw the funds before the maturity date, you may incur an early withdrawal penalty. In return for locking in your money for this specified period, the financial institution typically offers a higher interest rate compared to regular savings accounts. When you open a CD, you agree not to withdraw the funds until the maturity date.

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