Step Up Cd Definition

A step up cd is a deposit account that allows savers to lock in an interest rate for a set number of months.

Step up cd definition. Find out the differences here. Banks and credit unions don t always use the same terminology so for the purpose of this article we ll use step up cds to refer to a cd with an interest rate that rises automatically at specific points in time. An example of a cd that allows an interest rate change is the bump up certificate of deposit. Sometimes it s more than one time but with many bump up cds.

Step up your cd interest rate at u s. They re not very common and the current offerings are not particularly competitive. Bank offers a 28 month step up cd with the following schedule. Some banks or credit unions refer to these as step up rate cds.

So the difference between a bump up cd and a step rate or step up cd is you re guaranteed an interest rate at specific intervals and specific rates while you own it. That 39 s not the case with step up and bump up cds. Defining step up cds. Before the cd matures the interest rate associated with the account increases usually.

Unfortunately step up cds can be more about marketing than high interest rates. A standard cd offered at your local bank has a fixed apy over the life of its term.