Identified for average earnings and minimal danger, certificates of deposit (CDs) aren’t precisely thrilling — however that doesn’t imply you must overlook them. Although charges began dropping towards the top of 2024, CDs can nonetheless supply an excellent bang in your buck: A few of the highest-yielding CDs are at the moment incomes greater than 4% APY. If you happen to’re on the lookout for a deposit account that gives aggressive returns and the protection of FDIC insurance coverage, contemplate opening a CD.
Not satisfied? Learn on to learn the way a lot you could possibly earn by placing $10,000 in a CD for 5 years.
If you happen to’re taking a look at nationwide averages, CD charges most likely gained’t impress you. The typical 60-month (five-year) CD earns an rate of interest of 1.34%, in accordance with the FDIC.
Fortunately, averages are simply averages, and there are various banks and credit score unions providing better-than-average CD charges. For instance, America First Credit score Union tops the listing of the greatest 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% might not sound like quite a bit, however the numbers inform a distinct 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 price of 1.34%, and one incomes a extra aggressive 4%. (For simplicity’s sake, calculations are primarily based 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 median CD, you’d solely earn $688.20. In different phrases, selecting the best CD in your $10,000 would internet you greater than 3 times the curiosity in comparison with a median 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 atmosphere 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 might supply increased charges. That’s as a result of banks don’t wish to be on the hook to pay a excessive price for a number of years if the Federal Reserve cuts charges.
In line with the FDIC’s January 2026 report of Nationwide Charges and Fee Caps, 12-month CDs at the moment supply the best return. Right here’s a take a look at present charges for quite a lot 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 although the 60-month CD above earns a decrease price in comparison with the 12-month CD, it nonetheless earns extra over the course of its time period.
Learn extra: Quick- or long-term CD: Which is greatest 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 alternate 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 if you want it. In contrast to a CD, you possibly can typically withdraw cash out of your HYSA each time it’s essential to, although there could also be month-to-month withdrawal limits.
Presently, the greatest high-yield financial savings accounts are paying charges similar to the highest CDs, providing APYs of as much as 4% APY. However remember the fact that charges can change after you’ve opened an account.
Learn extra: Fastened price vs. variable price: What is the distinction, and why is it essential?
Cash market accounts (MMAs) work equally to financial savings accounts, however in addition they embody sure traits of checking accounts. For instance, MMAs typically earn aggressive curiosity, however in addition 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 greatest cash market accounts are providing APYs of as much as 4.1%.
If you happen to’re keen to take barely extra danger for probably increased returns, you may contemplate bonds.
Like CDs, some bonds present fastened funds over a gentle time frame.
Technically, a bond is an funding. You, the investor, lend cash to the federal government or a company; in alternate, you obtain recurring funds at a set rate of interest till the bond matures.
Whereas bonds aren’t federally insured the best way CDs are, they are typically very low-risk investments. Bonds may also supply barely extra flexibility — you possibly can promote bonds earlier than they mature, and when you’ll miss out on future returns, it’s possible you’ll not should pay penalties.
Notice: Rates of interest on HYSAs, MMAs, and sure sorts of bonds can change after you make an preliminary deposit. In contrast to CDs, this makes it unattainable to foretell long-term earnings.
When you’ve got $10,000 (or any amount of cash) you possibly can put aside for a time frame, a CD is likely to be value contemplating. As a result of CDs typically supply a set rate of interest at some point of their time period, they provide predictable earnings. If you happen to can afford to depart a $10,000 deposit alone for 5 years, you possibly can open a CD figuring out precisely how a lot you’ll earn.
Nonetheless, be cautious about placing cash in a CD if you happen to might have to withdraw it earlier than the account matures. If you happen to do, you’ll probably should pay early withdrawal penalties.
If you happen to want an account with extra flexibility, a financial savings or cash market account could also be a greater possibility. However, if you happen to’re working with an extended timeframe and are keen to tackle extra danger, you may 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 depends upon your rate of interest, which varies by monetary establishment. As of January 2026, the nationwide common price for a five-year CD is 1.34%. At that price, 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 price. The upper your price, the extra you’ll earn. With the present nationwide common one-year CD incomes 1.61% APY, you’d earn $161 in a single 12 months. At 4% APY, you’d earn $400.
It depends upon your priorities. If you happen to’re incomes a median price, it’s most likely not value placing your cash in a CD — you could possibly earn extra with the fitting financial savings account. Nonetheless, if you will discover a CD incomes a extra aggressive price, akin to 4% APY, it could be value contemplating.
Whether or not it’s a good suggestion depends upon how quickly you’ll want that cash, whether or not you’re snug with it being inaccessible for a time frame, and whether or not you will discover another — akin to an HYSA — that gives comparable charges.
