| CD Term | CD Rate | Initial Deposit | Interest Earned at Term End | Total Value of CD After Term |
| 3 months | 5.12% APY | $5,000 | $62.81 | $5,062.81 |
| 6 months | 5.50% APY | $5,000 | $135.66 | $5,135.66 |
| 1 year | 5.35% APY | $5,000 | $267.50 | $5,267.50 |
| 18 months | 5.25% APY | $5,000 | $398.87 | $5,398.87 |
| 2 years | 5.25% (22 months) | $5,000 | $491.75 | $5,491.75 |
| 3 years | 5.13% APY | $5,000 | $809.65 | $5,809.65 |
| 4 years | 5.00% APY | $5,000 | $1,077.53 | $6,077.53 |
| 5 years | 4.70% APY | $5,000 | $1,290.76 | $6,290.76 |
The top rate on a CD of any term today that does not require a minimum of more than $5,000 is 5.50%, which applies to a 6-month CD from Bellco Credit Union. At that rate, you could earn $135.66 in interest after 6 months. But if you can afford to leave your money in a little longer, you could really maximize the returns.
Note
The top rate across all CD terms right now is 5.65% APY, which is for a 9-month CD that requires a $10,000 minimum deposit.
A 1-year CD with a rate of 5.35% may be a good option. If you invested $5,000 in the top paying 1-year CD today, you’d earn $267.50 in interest at the end of the term. And a 22-month CD—part of our 2-year term category—could net you close to $500 in interest by the end of the term. But remember, there are early withdrawal penalties on CDs, so if you need to access your money sooner, you could have to pay a few months’ interest just to get your money back. We've got some other options for you to consider later on in this article.
CDs may be a better alternative to savings accounts if you want to lock in a higher interest rate on your money and do not need that cash in the immediate future. Right now, the highest savings account rate is 5.12% APY. Most of the best CD rates—on 6-month, 1-year, 18-month, 2-year, and 3-year terms—pay more than the highest savings account rate today.
CD Rates Today
The national average annual percentage yields (APY) on CDs are much lower than the top rates offered by nationwide banks and credit unions today. The APY on a CD can really impact the amount of money you earn on your initial deposit.
For example, the current national average for a 1-year CD is 1.59%. If you put $5,000 in a 1-year CD at that rate, you’d earn $79.50 at the end of the term. Instead, by choosing to invest $5,000 in a CD with a top rate of 5.35% for one year, you’d earn $267.50. That's $188 more.
Alternatives
High-Yield Savings Account
If you want to earn a higher interest on your savings but don’t want to lock your money away for a certain amount of time, a high-yield savings account might be a better alternative. The top rate on a high-yield savings account is currently 5.12% APY. With high-yield savings accounts, you can withdraw money at any time (though some accounts may have limits on how many times you can withdraw per month), and deposit more money when you want to boost your savings.
Money Market Account
Right now, the best money market rate is even higher than the top savings rate. It's 5.25% for a minimum deposit of $1,000. Unlike savings accounts, money market accounts allow you to write checks. If that's important to you, this might be your best bet for a more liquid alternative to a CD.
Although interest rates on CDs, money market, and savings accounts are high right now, there is no guarantee that they will keep rising in the future. While the Federal Reserve has raised its federal funds rate—the benchmark interest rate set by the Federal Reserve that influences CD and savings rates—10 times since March 2022 to cool inflation, it has indicated that there may not be any more increases this year.
The Fed is widely expected to pause interest rate hikes at its meeting this week. This afternoon, data on fed funds futures trading showed traders betting 78% in favor of a rate hike pause. It’s very likely that savings account rates will peak and begin to drop off in the coming weeks and months.
If you want to earn more interest on your savings, you might want to consider investing extra money in a CD now, so you can lock in a higher interest rate in the coming months or even years, regardless of the Fed’s decision.
Rate Collection Methodology Disclosure
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD's minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
FAQs
Here's the short answer. The highest-paying CD on our best CD rates list is a 1-year CD that has a 5.15% APY. If you have $5,000 to lock away in a CD, this means that you'd make $257.50 in interest during the CD's one-year maturity term.
How much can you make by depositing $5000 into a CD? ›
A 1-year CD with a rate of 5.35% may be a good option. If you invested $5,000 in the top paying 1-year CD today, you'd earn $267.50 in interest at the end of the term.
Is it worth it to put 5000 in a CD? ›
The bottom line. Putting $5,000 in a 1-year CD today can be a prudent financial move, especially when interest rates are as high as they currently are. The combination of competitive returns, safety and predictability makes it an attractive option for individuals looking to grow their savings with minimal risk.
How much will $10,000 make in a CD? ›
Earnings on a $10,000 CD Over Different Terms
| Term Length | Average APY | Interest earned on $10,000 at maturity |
|---|
| 1 year | 2.60% | $263.12 |
| 18 months | 2.21% | $336.74 |
| 2 years | 2.08% | $424.40 |
| 3 years | 1.94% | $598.77 |
3 more rows5 days ago
Shopping around for a top APY means you can earn 10 to 12 times more than the national average rate, which is less than half a percent. $5,000 in one of today's best high-yield savings accounts could earn as much as $136 in just six months—compared to about $11 with an average rate.
What is the biggest negative of putting your money in a CD? ›
Banks and credit unions often charge an early withdrawal penalty for taking funds from a CD ahead of its maturity date. This penalty can be a flat fee or a percentage of the interest earned. In some cases, it could even be all the interest earned, negating your efforts to use a CD for savings.
How much does a $50,000 CD make in a year? ›
A long-term CD could yield $2,375 per year (for a 3-year CD)
| Term | APY | Yield on $50,000 (per year) |
|---|
| 2 years | 4.75% | $2,250 |
| 3 years | 4.66% | $2,375 |
| 4 years | 4.45% | $2,225 |
| 5 years | 4.30% | $2,150 |
Feb 10, 2024
Bottom line. Losing money in a CD is highly unlikely. However, it's not impossible. If you're thinking about opening one, read the fine print about early withdrawal penalties, and be sure to compare more flexible options that don't have a maturity date.
What should I invest $5000 in today? ›
Investing in an S&P 500 index fund is one of the simplest and most effective ways to participate in the growth of the U.S. stock market over the long term. This benchmark comprises 500 large U.S. companies across 11 market sectors, such as technology, consumer staples, communications, health care and energy.
Should I lock in a CD now or wait? ›
Waiting to open a CD could mean missing out on some stellar rates. Now, you can lock in high rates on both short-term and long-term CDs, and you can score some serious interest just by opting to deposit a larger lump sum into your CD.
Key takeaways
Interest earned on CDs is considered taxable income by the IRS, regardless of whether the money is received in cash or reinvested. Interest earned on CDs with terms longer than one year must be reported and taxed every year, even if the CD cannot be cashed in until maturity.
How much does a $20,000 CD make in a year? ›
That said, here's how much you could expect to make by depositing $20,000 into a one-year CD now, broken down by four readily available interest rates (interest compounding annually): At 6.00%: $1,200 (for a total of $21,200 after one year) At 5.75%: $1,150 (for a total of $21,150 after one year)
Why should you deposit $10,000 in CD now? ›
The top nationwide rate in each CD term—from 6 months to 5 years—currently ranges from 5.20% to 6.18% APY. With a $10,000 investment in a top-paying CD, you can earn hundreds to thousands of dollars of interest on your money—and much more than if you keep it in a typical savings account.
Should I put 5000 in a CD? ›
Putting $5,000 into a 5-year CD right now can be a great option for savers – as long as you're sure that you won't need it during CD term, as early withdrawals can come with significant penalties. A CD is a safe, efficient way to save your money, though, especially when rates are as high as they are currently.
How much does a $5000 CD make in 6 months? ›
Average 6-month CDs
| APY | 0.03% | 1.49% |
|---|
| End balance | $5,007.50 | $5,037.37 |
| Total interest | $7.50 | $37.37 |
Jan 24, 2024
A $5,000 balance could earn as much as $268 in a year with the highest-yield savings account on our radar -- and over $200 even with a slightly lower rate. Also consider customer service, FDIC insurance, and accessibility when you pick an account.
What happens if I deposit $5000? ›
Depending on the situation, deposits smaller than $10,000 can also get the attention of the IRS. For example, if you usually have less than $1,000 in a checking account or savings account, and all of a sudden, you make bank deposits worth $5,000, the bank will likely file a suspicious activity report on your deposit.
How much should you put in a CD to make it worth it? ›
The specific amount you put into a CD depends on your personal finances. The best way to decide how much money to put into a CD is to figure out how much cash you can afford to part with for an extended amount of time. While that amount will be different for everyone, you should keep a few things in mind.
How much money can a CD make you? ›
Current national average CD rates
| Term | National average rate |
|---|
| 6-month CD | 1.79% APY. |
| 1-year CD | 1.80% APY. |
| 3-year CD | 1.42% APY. |
| 5-year CD | 1.40% APY. |
1 more rowMar 21, 2024
That all noted, here's how much you can expect to make with a 5% CD interest rate: $500 deposit: $25 for a total of $525 after 12 months. $1,000 deposit: $50 for a total of $1,050 after 12 months. $2,500 deposit: $125 for a total of $2,625 after 12 months.
