Right now, the best certificates of deposit are offering annual percentage yields, or APYs, over 5%. And unlike savings accounts, which have variable rates, your CD’s interest rate is locked in when you open the account. With APYs on the way down, that means opening a CD now can shield your earnings from future rate drops.
So how much can you earn by locking in a high CD rate now? Most people don’t have an extra $10,000 to invest, but looking at a round number like this makes it easy to see how much you can earn over time. We’ll also show you how much you can earn by depositing smaller amounts and share some tips to help you build your savings.
How much can you earn by depositing $10,000 into a CD?
Here’s how much you can earn if you deposit $10,000 into a six-month, one-year, three-year and five-year CD. We’re calculating your return based on the highest APYs currently available for each CD term, based on the banks we track at CNET.
| Term | Top APY | Bank | Interest earnings | CD value at maturity |
| 6 months | 5.35% | Rising Bank | $264.01 | $10,264.01 |
| 1 year | 5.35% | NexBank | $535.00 | $10,535.00 |
| 3 years | 4.66% | First Internet Bank of Indiana | $1,464.16 | $11,464.16 |
| 5 years | 4.55% | First Internet Bank of Indiana | $2,491.66 | $12,491.66 |
The national average for a one-year CD is 1.81% APY, while the average one-year CD based on the banks we track at CNET is 4.97% APY. If you deposit $10,000 into a one-year CD that pays the national average of 1.81% APY, the value at maturity would be $10,181. However, if you deposit $10,000 into a one-year CD that earns 5.35% APY (the top APY from our list), it would be worth $10,535 at maturity.
Don’t have $10,000? No problem. Here’s what you can earn with a smaller deposit
You don’t need to have $10,000 on hand to earn a competitive interest rate on your savings. Most of the CD accounts on our list don’t have a minimum deposit required to lock in a high CD rate. Here’s what you could earn with other deposit amounts:
| Term | Top APY | $500 deposit | $1,000 deposit | $2,500 deposit | $5,000 deposit |
| 6 months | 5.35% | $13.20 | $26.40 | $66.00 | $132.01 |
| 1 year | 5.35% | $26.75 | $53.50 | $133.75 | $267.50 |
| 3 years | 4.66% | $73.21 | $146.42 | $366.04 | $732.08 |
| 5 years | 4.55% | $124.58 | $249.17 | $622.92 | $1,245.83 |
How CD interest is calculated
When you open a CD, the APY represents the actual rate of return you’ll earn on your deposit in one year. The APY reflects compounding interest, which means you aren’t just earning interest on your initial deposit -- your interest also earns interest.
Some banks compound interest daily, while others compound interest monthly, quarterly or semi-annually. The more often interest is compounded, the more money you’ll earn.
You can use a compound interest calculator to figure out how much your money can grow in a CD. We recommend using this calculator from the US Securities and Exchange Commission.
One of the biggest trade-offs for most CDs is early withdrawal penalties. If you need to pull out your money early, most CDs charge you an early withdrawal penalty equal to a certain period’s worth of interest. These penalties can eat into your interest earnings. If you’ll need to access your money sooner, a high-yield savings account may be a better fit.
Still growing your savings? A high-yield savings account can help
CDs are a great option if you already have money saved that you don’t won’t need to touch for a set period of time. But most of us don’t have a few thousand on hand that we can part with for a few years in exchange for a fixed interest rate. And that’s OK.
A high-yield savings account or money market account that earns a competitive APY is your best bet if you’re still growing your emergency fund, working on your savings goals or want to withdraw your money as you need it. These accounts let you build your savings as you can, while still having access to your money if you need it.
Contributing as little as $100 a month can help you work up to $1,200 in savings each year. If you can contribute more, say $250 a month, you could build an emergency fund of $3,000 in a year. And that’s not counting the interest you’ll earn on top of your savings. Although savings accounts have variable interest rates -- meaning they can rise and fall based on the economy and your bank’s discretion -- experts expect savings rates will remain high all year. Right now, you can earn upwards of 5% with some online high-yield savings accounts.
Growing a savings account takes time. Focus on what you can contribute and get into the habit of saving so it becomes a routine. You can also use automated savings tools, like round-ups and automatic transfers, to grow your savings a little faster without taking up your time. CNET Money editors are big fans of Ally Bank’s automated savings features, but many online banks also offer helpful savings features.
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