New Delhi, Oct. 23 -- Choosing a certificate of deposit (CD) involves more than finding an attractive interest rate. The term determines how long that rate remains fixed and when the money becomes available without an early withdrawal penalty. For savers planning several years ahead, a three-year CD offers an opportunity to earn predictable interest without depending on future rate changes.

The decision becomes more complicated when banks offer different annual percentage yields (APYs) across one-year, three-year, and five-year terms. A longer commitment does not necessarily mean a higher rate, and the differences between offers can affect how much interest a deposit earns. Understanding these variations helps savers assess where a three...