A certificate of deposit (CD) that pays a floating interest rate. In other words, the rate floats upward or downward, re-adjusting over the lifespan of the certificate. The floating rate gets paid periodically based on a specific benchmark rate or reference rate (e.g., LIBOR).

Floating rate certificates have a maturity that ranges between a few months to a number of years (up to 5 years). Savers resort to these certificates to lock in the rate anytime over the course of their terms.

It is also known as an variable rate certificate of deposit or adjustable rate certificate of deposit.