This isn't going to be pin point accurate, but it has to do with yield curves. The scenario you describe is an inverted yield curve. Why does the bank offer more now than later? – Part of it is because they believe they can make more now than later. Higher interest rates now means they can pay you and still make money, while lower interest rates later mean they don't believe they can still make their money and pay you the same or higher interest rate. Its all about what the market is predicting about the future. I think, perhaps wrongly, that a good comparison would be the price of some commodity, say oranges. The price you pay for an orange now may not be the price you pay for an orange 1 year from now; depending on the predicted future scarcity, that future price could either be really high or really low, but the current price could be in between. A predicted wind-fall of a harvest next year will cause future prices of oranges to drop to 10 cents an orange if you lock it in now, but if you wanted to eat an orange today, it'll still cost you a dollar right now. Same thing with the checking and CD accounts. You are being offered 0.75% savings but the bank is unwilling to commit to anything higher for the CD because it might be predicting a vastly worse future economy, in which case they won't offer you higher, but lower.