6 Factors That Will Determine If CD Rates Go Up in 2022

Dec 30, 2023 By Triston Martin

If you're like most people, you're probably wondering if CD rates will go up in 2022. The answer to that question isn't easy to determine, as there are many factors that will play into the final decision. In this blog post, we'll discuss five of the most important factors that will determine whether or not CD rates increase next year. Keep reading to learn more!

1. The CD’s term length

One of the most important factors that will determine if CD rates go up in 2022 is the term length of the CD. When it comes to CDs, the term length is the amount of time that the CD will be in effect. This can range from a few weeks to a few years, and it generally depends on the specific CD and the bank or financial institution that issued it. The term length may also affect the interest rate that is paid on the CD. Generally speaking, the longer the term, the higher the interest rate. For example, a longer-term CD may have a higher interest rate than a shorter-term CD. This is because the bank can lock in the higher rate for a longer period of time, and they are also able to offer a higher rate to attract customers. So, if you're thinking about investing in a CD, you may want to consider a longer-term option to maximize your earnings.

2. The type of CD

Another factor that will play a role in determining if CD rates go up in 2022 is the type of CD. There are several different types of CDs, and each one may offer a different interest rate. The most common types of CDs are traditional CDs, jumbo CDs, and no-penalty CDs. Traditional CDs typically have the lowest interest rates, while jumbo CDs usually offer the highest rates. No-penalty CDs typically have interest rates that fall somewhere in the middle. So, if you're looking for the highest possible return on your investment, you may want to consider a jumbo CD. However, if you're more concerned with safety and security, a traditional CD may be a better option for you.

3. Current benchmark interest rates

The current benchmark interest rates will also play a role in determining if CD rates go up in 2022. Benchmark interest rates are used by banks and financial institutions to set interest rates on their products, including CDs. The most common benchmark interest rate is the federal funds rate, which is set by the Federal Reserve. Other benchmark interest rates include the prime rate and the LIBOR rate. Currently, the federal funds rate is at a historic low of 0.25%. This means that CD rates are also at historic lows. In order for CD rates to go up in 2022, the benchmark interest rates would need to increase. This is unlikely to happen, as the Federal Reserve has stated that they plan to keep rates low for the foreseeable future.

4. The current interest rate environment

The current interest rate environment will also play a role in determining if CD rates go up in 2022. Interest rates are currently at historic lows, which means that banks and financial institutions have less room to increase rates. However, if the economy improves and inflation begins to pick up, interest rates are likely to rise. This would provide more room for banks to raise CD rates. So, if you're looking for the best possible return on your investment, you may want to wait until the current interest rate environment improves.

5. The health of the economy

The health of the economy is another important factor that will determine if CD rates go up in 2022. If the economy is doing well, there will be more demand for CDs, and banks will be able to offer higher rates. However, if the economy is struggling, there may be less demand for CDs, and rates may not increase. So, if you're looking to invest in a CD, you'll want to keep an eye on the economy to see if it's doing well or not.

6. The banks’ profit margins

Banks' profit margins are another important factor that will determine if CD rates go up in 2022. When interest rates are low, banks typically have narrower profit margins. This means that they may be less likely to raise CD rates. However, if interest rates rise, banks' profit margins will expand, and they may be more likely to raise CD rates. So, if you're looking for the best possible return on your investment, you may want to wait until interest rates rise before investing in a CD.


These are just a few of the factors that will determine if CD rates go up in 2022. Keep these things in mind as you make your investment decisions in the coming year. And remember, if you have any questions, we hope this article will help you!

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