Deal or No Deal: Bump-Up Certificates of Deposit
Short-term CDs that adjust your rate higher may not be a good deal.


As short-term interest rates climb, albeit at a snail’s pace, a certificate of deposit that allows you to increase the rate during its term may look appealing. With such a bump-up CD, you may lift the rate one or more times (depending on the issuer’s rules) to a higher rate offered by the bank.
But if you’d rather not tie up your money for more than a couple of years, don’t take the bait. “You won’t see rates increase far enough, fast enough to come out ahead” with bump-up CDs that mature in less than two years, says Greg McBride, chief financial analyst for Bankrate.com. However, some longer-term bump-up CDs have competitive starting yields and are worth a look. For example, America First Credit Union (open to residents of some counties in Utah and Nevada and to those who work for qualifying employers) recently offered 2.3% on a five-year CD with a one-time bump. That compares well with 2.42% on a high-yielding five-year traditional CD from Melrose Credit Union, in Briarwood, N.Y. (available to customers nationwide).
Still, it’s wise to keep a portion of your savings in more-accessible accounts. You can search for short-term CDs and savings accounts at DepositAccounts.com and Bankrate.com. The SFGI Direct savings account, for one, has no monthly fee, a minimum balance of $1 to earn interest and a recent yield of 1.06%.
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Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.
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