Identified for reasonable earnings and minimal threat, certificates of deposit (CDs) aren’t precisely thrilling — however that doesn’t imply it is best to overlook them. Although charges began dropping towards the top of 2024, CDs can nonetheless supply a great bang to your buck: A number of the highest-yielding CDs are presently incomes greater than 4% APY. In case you’re on the lookout for a deposit account that provides aggressive returns and the protection of FDIC insurance coverage, contemplate opening a CD.
Not satisfied? Learn on to learn the way a lot you can earn by placing $10,000 in a CD for 5 years.
In case you’re nationwide averages, CD charges in all probability gained’t impress you. The typical 60-month (five-year) CD earns an rate of interest of 1.34%, based on the FDIC.
Fortunately, averages are simply averages, and there are a lot of banks and credit score unions providing better-than-average CD charges. For instance, America First Credit score Union tops the checklist of the perfect CD charges, with a number of phrases boasting rates of interest round or above 4%.
The distinction between incomes the common rate of interest and incomes 4% could not sound like so much, however the numbers inform a unique story.
The desk under exhibits how a lot you’d earn over 5 years by depositing $10,000 into two totally different CDs: One incomes the common 60-month CD charge of 1.34%, and one incomes a extra aggressive 4%. (For simplicity’s sake, calculations are based mostly on APY.)
Because the desk exhibits, you’d earn a complete of $2,166.53 in curiosity over 5 years with a CD incomes 4% APY. With a mean CD, you’d solely earn $688.20. In different phrases, choosing the proper CD to your $10,000 would internet you greater than 3 times the curiosity in comparison with a mean account.
CD charges and earnings by time period
Rates of interest additionally fluctuate by CD time period — that’s, the variety of months or years till the CD matures.
Historically, longer CD phrases have supplied increased charges, however the financial surroundings can have an effect on this development. When rates of interest are excessive and anticipated to drop within the close to future, shorter CD phrases could supply increased charges. That’s as a result of banks don’t need to be on the hook to pay a excessive charge for a number of years if the Federal Reserve cuts charges.
In accordance with the FDIC’s January 2026 report of Nationwide Charges and Price Caps, 12-month CDs presently supply the very best return. Right here’s a have a look at present charges for a wide range of totally different CD phrases and the quantity of curiosity they’d earn by the point they mature:
Remember, the longer the CD time period, the extra time your cash has to earn curiosity (and for that curiosity to earn curiosity). So though the 60-month CD above earns a decrease charge in comparison with the 12-month CD, it nonetheless earns extra over the course of its time period.
Learn extra: Brief- or long-term CD: Which is finest for you?
CDs aren’t the one place to earn curiosity in your money. If the inflexibility of a CD doesn’t make sense for you, contemplate these options.
A high-yield financial savings account (HYSA) additionally lets you earn a aggressive rate of interest in your financial savings, plus, your cash’s there while you want it. Not like a CD, you may typically withdraw cash out of your HYSA at any time when you might want to, although there could also be month-to-month withdrawal limits.
Presently, the perfect high-yield financial savings accounts are paying charges akin to the highest CDs, providing APYs of as much as 4% APY. However remember that charges can change after you’ve opened an account.
Learn extra: Fastened charge vs. variable charge: What is the distinction, and why is it vital?
Cash market accounts (MMAs) work equally to financial savings accounts, however additionally they embrace sure traits of checking accounts. For instance, MMAs typically earn aggressive curiosity, however additionally they typically include checks and/or a debit card.
Nonetheless, one draw back — and potential roadblock — is that MMAs typically have increased account minimums in comparison with financial savings accounts or CDs.
Presently, the perfect cash market accounts are providing APYs of as much as 4.1%.
In case you’re keen to take barely extra threat for doubtlessly increased returns, you would possibly contemplate bonds.
Like CDs, some bonds present fastened funds over a gentle time period.
Technically, a bond is an funding. You, the investor, lend cash to the federal government or an organization; in change, you obtain recurring funds at a set rate of interest till the bond matures.
Whereas bonds aren’t federally insured the way in which CDs are, they are typically very low-risk investments. Bonds also can supply barely extra flexibility — you may promote bonds earlier than they mature, and whilst you’ll miss out on future returns, chances are you’ll not need to pay penalties.
Notice: Rates of interest on HYSAs, MMAs, and sure forms of bonds can change after you make an preliminary deposit. Not like CDs, this makes it unimaginable to foretell long-term earnings.
In case you have $10,000 (or any sum of money) you may put aside for a time period, a CD could be value contemplating. As a result of CDs typically supply a set rate of interest throughout their time period, they provide predictable earnings. In case you can afford to go away a $10,000 deposit alone for 5 years, you may open a CD realizing precisely how a lot you’ll earn.
Nonetheless, be cautious about placing cash in a CD if you happen to could must withdraw it earlier than the account matures. In case you do, you’ll possible need to pay early withdrawal penalties.
In case you want an account with extra flexibility, a financial savings or cash market account could also be a greater choice. However, if you happen to’re working with an extended timeframe and are keen to tackle extra threat, you would possibly contemplate investing that cash in bonds, shares, mutual funds, or ETFs.
Learn extra: 3 sensible issues to do when your financial savings account hits $10,000
The quantity you’d earn by placing $10,000 in a CD for 5 years relies on your rate of interest, which varies by monetary establishment. As of January 2026, the nationwide common charge for a five-year CD is 1.34%. At that charge, you’d have a complete of $10,688.20 after 5 years. Nonetheless, if you happen to might discover a extra aggressive CD incomes 4% APY, you’d find yourself with $12,166.53.
One-year CD earnings rely in your CD charge. The upper your charge, the extra you’ll earn. With the present nationwide common one-year CD incomes 1.61% APY, you’d earn $161 in a single yr. At 4% APY, you’d earn $400.
It relies on your priorities. In case you’re incomes a mean charge, it’s in all probability not value placing your cash in a CD — you can earn extra with the best financial savings account. Nonetheless, if yow will discover a CD incomes a extra aggressive charge, equivalent to 4% APY, it might be value contemplating.
Whether or not it’s a good suggestion relies on how quickly you’ll want that cash, whether or not you’re snug with it being inaccessible for a time period, and whether or not yow will discover another — equivalent to an HYSA — that provides comparable charges.