How Much Can I Earn With a $10,000 CD? (2024)

Key Takeaways

  • CDs are paying their highest rates in 20 years thanks to the Federal Reserve's aggressive inflation-fighting campaign.
  • Opening a CD now allows you to guarantee one of today's record rates for months or years into the future.
  • 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.
  • CDs can also help you keep your money in savings, reducing the temptation of spending on unplanned purchases.

The Best CD Rates Have Skyrocketed in 2023

For the last 20 months, the Federal Reserve has been aggressively fighting decades-high inflation by repeatedly raising the federal funds rate. With 11 hikes, the Fed has increased its benchmark rate a cumulative 5.25%, to its highest level since 2001.

This has been great news for savers, as the federal funds rate directly impacts what banks and credit unions are willing to pay consumers for their deposits. And as a result, the rates you can earn on high-yield savings, money market, and CD accounts have surged to historic highs.

The remarkable gains have been seen across every CD term from 3 months to 5 years, but in the graph above, you can clearly see the path 1-year CD rates have taken since the Fed's first increase in March 2022. From just slightly above 1% at that time, the leading 1-year CD rate is now over 6%.

How CDs Work—And Why They're So Smart Right Now

Certificates of deposit (CDs) are a way for you to secure a higher rate than you might be able to earn from a savings or money market account—but also to lock in a rate that you'll be guaranteed for a set period of time. So when you open a CD, you're not only signing up for a known interest rate, but also a known time duration, or term.

What's great about this—particularly when rates are high, like they are now—is that your rate cannot go down. It's very possible the Fed will begin lowering its benchmark rate in 2024, and if it does so, rates on high-yield savings accounts and money market accounts will start to fall. But a CD rate you've locked in is yours to keep until the CD matures.

While it is possible CD rates could climb a bit higher still—if the Fed implements another rate hike—it's also possible the central bank is done with its increases and CD rates have already reached their peak. In any case, CDs are already a great move since rates are so elevated. And if they do move higher, it will likely be just a marginal increase.

How Much Can I Earn With $10,000 in a CD?

How much can you make by committing some of your money to a CD at today's rates depends, of course, on the term you choose and the particular CD you open. But using a common investment amount of $10,000, we show you below what you can earn by opening a top-paying CD in any of the major terms.

We've also shown how those earnings compare to a savings account paying 3% in order to help you understand what you stand to gain with a CD commitment. Granted, 3% is a hypothetical savings account rate—you may be earning more than that right now. But you may also be earning much less.

It's also important to consider that savings account rates will begin to drop when the Fed starts lowering interest rates. So earning 3% on a savings account now does not mean you'll earn that much in a year or two, or further down the road. Note, for example, that before the Fed started raising rates in 2022, the top nationwide rate on a high-yield savings account was just 0.70% APY.

Earnings on a $10,000 CD Opened at Today's Top Rates

Top Nationwide Rate (APY)Balance at MaturityTotal EarningsEarnings Gain vs. a 3% Savings Account*
6 months5.76%$ 10,288$ 288+ $ 138
1 year6.18%$ 10,618$ 618+ $ 318
18 months5.80%$ 10,887$ 887+ $ 432
2 year5.60%$ 11,151$ 1,151+ $ 542
3 year5.50%$ 11,742$ 1,742+ $ 815
4 year5.20%$ 12,248$ 2,248+ $ 993
5 year5.25%$ 12,915$ 2,915+ $ 1,323

Only Have $5,000 or Less for a CD? Or Maybe More?

Maybe $10,000 is more savings than you can afford to commit, and $2,000 or $5,000 is more your speed. Or maybe you have a bigger amount—like $25,000—to invest. Below we've laid out the earnings you could expect at those different deposit amounts.

Earnings on Different CD Amounts at the Top Nationwide Rates

Top Nationwide Rate (APY)Total Earnings on a $2,000 CDTotal Earnings on a $5,000 CDTotal Earnings on a $25,000 CD
6 months5.76%$ 58$ 144$ 720
1 year6.18%$ 124$ 309$ 1,545
18 months5.80%$ 177$ 443$ 2,217
2 year5.60%$ 230$ 576$ 2,878
3 year5.50%$ 348$ 871$ 4,356
4 year5.20%$ 450$ 1,124$ 5,620
5 year5.25%$ 583$ 1,458$ 7,289

CDs Have a Catch—But You Can Use It to Your Advantage

There is one important trade-off to CDs—they carry an early withdrawal penalty that you'll incur if you decide you need to cash out before the CD's maturity date. Sometimes these are relatively mild, but sometimes they're quite harsh. Since every bank and credit union has their own policy, be sure you find out how any penalty will be calculated before you commit to a CD. And if two CDs are fairly similar on rate, go with the one that has a less onerous penalty.

There is a silver lining to early withdrawal penalties, however. Because cashing out early will cost you, it can be an effective deterrent to spending your savings on something you didn't previously plan for. So if you choose your CD term carefully, keeping your money on deposit until maturity will not only help you keep your money saved, but it will also maximize what you earn on those savings.

Best CD Rates for April 2024: Up to 5.60%

Best High-Yield Savings Accounts for April 2024—Up to 5.55%

Best Money Market Account Rates for April 2024—Up to 5.35%

Rate Collection Methodology Disclosure

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account'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.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.

  1. Federal Reserve Board. "Open Market Operations."

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How Much Can I Earn With a $10,000 CD? (2024)

FAQs

How much will a $10,000 dollar CD earn? ›

Earnings on a $10,000 CD Over Different Terms
Term LengthAverage APYInterest earned on $10,000 at maturity
1 year1.81%$181
2 years1.54%$310.37
3 years1.41%$428.99
4 years1.32%$538.55
1 more row
6 days ago

How much interest will $10,000 earn in a year? ›

The Bankrate promise
Type of savings accountTypical APYInterest on $10,000 after 1 year
Savings account paying competitive rates5.25%$539
Savings account paying the national average0.58%$58
Savings accounts from various big brick-and-mortar banks0.01%$1
Apr 2, 2024

How much will $10,000 make in a money market account? ›

Currently, money market funds pay between 4.47% and 4.87% in interest. With that, you can earn between $447 to $487 in interest on $10,000 each year. Certificates of deposit (CDs). CDs are offered by financial institutions for set periods of time.

How much does a $5000 CD make in a year? ›

How much interest would you make on a $5,000 CD? We estimate that a $5,000 CD deposit can make roughly $25 to $275 in interest after one year. In comparison, a $10,000 CD deposit makes around $50 to $550 in interest after a year, depending on the bank.

What happens if you put $10,000 in a CD for 5 years? ›

The interest is significant and predictable

Let's say you put $10,000 into a 5-year CD with the rate discussed above – 4.75%. After the 5-year term is up you'll have earned $2,611 in interest for a total account balance of $12,611. That is a good rate of return for an option that comes with essentially zero risk.

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 to double 10k quickly? ›

Here are some ways to flip $10,000 fast:
  1. Flip items (buy low, sell high)
  2. Start a blog.
  3. Start an online business.
  4. Write an email newsletter.
  5. Create online courses or teach online.
  6. Invest in real estate with EquityMultiple.
Apr 8, 2024

How much is $10,000 for 5 years at 6 interest? ›

Summary: An investment of $10000 today invested at 6% for five years at simple interest will be $13,000.

How much money should I put in a CD? ›

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 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)

Which bank gives 7% interest on savings accounts? ›

Which Bank Gives 7% Interest Rate? Currently, no banks are offering 7% interest on savings accounts, but some do offer a 7% APY on other products. For example, OnPath Federal Credit Union currently offers a 7% APY on average daily checking account balances up to and under $10,000.

Is it better to get CD interest monthly or yearly? ›

Typically the longer the term, the higher the CD rate is. You can earn more interest than short-term CDs with terms longer than a year and up to three years. The national average rate for a three-year term is 1.41% APY, and you can find higher yields at some banks.

Why should you deposit $5000 in CD now? ›

For context, in 2021, when rates were around their lowest, the national average 12-month CD had an APY of just 0.15%. For a $5,000 deposit, this is the difference between earning $250 in interest over a year versus earning only $7.50 over that same time frame.

What if I put $20,000 in a CD for 5 years? ›

How much interest would you earn? If you put $20,000 into a 5-year CD with an interest rate of 4.60%, you'd end the 5-year CD term with $5,043.12 in interest, for a total balance of $25,043.12.

Can you live off CD interest? ›

There are a few different ways to invest your money to earn interest and live off of that income. The most popular investments are bonds, certificates of deposit (CDs) and annuities. The interest that you'll earn will depend on the amount of money you have in your account when you go to live off of that interest.

How much will I get if I put $10,000 in a CD for 1 year? ›

Earnings on a $10,000 CD Opened at Today's Top Rates
Top Nationwide Rate (APY)Balance at Maturity
1 year6.18%$ 10,618
18 months5.80%$ 10,887
2 year5.60%$ 11,151
3 year5.50%$ 11,742
3 more rows
Nov 9, 2023

Should you put 10k in a CD? ›

A certificate of deposit is a great way to stash money you don't think you'll need access to for a while. It's safe and secure, plus the interest rates are generally higher than you'll get with other savings products.

Should you deposit $10,000 into a CD? ›

CD value at maturity

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.

How much does a $100,000 CD make in a year? ›

The Bankrate promise
Type of 1-year CDTypical APYInterest on $100,000 after 1 year
CDs that pay competitive rates5.30%$5,300
CDs that pay the national average1.59%$1,590
CDs from big brick-and-mortar banks0.03%$30
Jul 11, 2023

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