How much interest will a $10,000 5-year CD earn right now?
Locking up $10,000 for five years sounds risky, but doing the math using today's rates tells a different story.
A 5-year CD currently offers higher interest than long-term savings accounts, potentially providing $2,372.64 in interest on a $10,000 deposit, yielding a total balance of about $12,372.64. This fixed rate remains unchanged throughout the CD's term. However, withdrawing funds early incurs substantial penalties. In contrast, high-yield savings accounts provide comparable returns, with $2,225.13 in interest on the same deposit at 4.10%, resulting in a total balance of around $12,225.13.
But these rates are variable and subject to change, presenting uncertainty. If you can leave your money untouched for five years, a 5-year CD with a fixed rate may be more appealing due to its certainty. If flexibility to withdraw funds is crucial, a high-yield savings account may be preferable, despite the potential for lower but fluctuating returns.
Written by urgent.news from CBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
