Flexible vs. Fixed-Rate CD [Infographic] (2024)

A certificate of deposit (CD) is a secure way to grow your money for a set amount of time. If you want to invest, you'll have the option of choosing a fixed-rate CD or one with a flexible rate.

But which is best for your needs? Each can offer different benefits.

Comparing the benefits of fixed-rate and flexible-rate CDs

The two CD types are fundamentally different. Fixed-rate CDs feature an interest rate that generally stays the same for the length of the investment. Flexible-rate CDs, however, have an interest rate that may increase or decrease over the term.

Each has investing advantages, but often in differing contexts. For example, while CDs in general are considered a secure investment, fixed-rate CDs grant an additional layer of protection by keeping the interest rate stable. The consistent rate can help with planning for the future. A flexible-rate CD, on the other hand, features a rate that may float over time, offering both potential upside alongside possible downside. Overall, CDs are low-risk investment options, but fixed-rate CDs present even lower risk than flexible-rate CDs.

Length of investment is another point of differentiation. Fixed-rate CDs are often available for multiple years, and the longer the term, the higher the interest rate may be. Flexible-rate CDs are typically offered with shorter terms that can preserve financial flexibility. However, some fixed-rate CDs may come with a term as low as seven days.

The choice of fixed- vs. flexible-rate CD hinges on your own financial goals and risk appetite, among many other factors.

Want to learn more about investing in either type of CD account? Check out our infographic "Flexible vs. Fixed-Rate CDs" today, or contact Comerica Bank to learn how our existing checking customers can benefit.