In U.S. deposit terminology, the term CD Rates refers to the interest rate on Certificates of Deposit. The interest rate for these money market instruments with a relatively short maturity date is typically a fixed rate of interest, and payable on a set maturity date.
For example, a 1.00% CD rate on a two year $10,000 Certificate of Deposit that might typically be purchased by individuals, businesses and financial institutions would pay the holder $200.00 in interest at the end of the two year investment period, plus their principal. CD rates vary considerably with different maturities and varying certificate amount sizes. Also, CD rates pertain to deposits of typically one month to as much as ten years, and they vary widely among different banking and retail financial institutions. Longer term CD rates are generally higher than shorter term CD rates when the yield curve is positive sloping and lower when the curve is inverted.