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Variable Rate CD


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

Variable rate CDs 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 adjustable rate CD or floating rate CD.



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