Answers about CDs and Certificates of Deposit

Interest rates have gone up, but the bank refuses to raise the rate on my time certificate of deposit (CD). Why?

When you buy a CD, you enter into a contract involving a fixed amount of money (principal) for a predetermined period of time (the term) and an agreed-upon interest rate and yield. The bank is simply honoring the terms of the contract; it is not obligated to change those terms when interest rates change.

Please refer to the Account Agreement you received when you bought the CD for the terms and conditions of the account.