Here's How Much You Can Earn by Depositing $5,000 Into a CD Now

A certificate of deposit can be a good option for storing savings you don't need to access for a while. In exchange for keeping your money in a CD for the full term, you get to earn a fixed interest rate, which means your earnings will remain the same even if overall interest rates fluctuate.

You can earn annual percentage yields, or APYs, of up to 4.65%. Placing a $5,000 deposit in one of them could result in over $1,000 in interest, depending on the CD and term you select. To provide an idea of the potential earnings, we've outlined some example returns for a $5,000 deposit - as well as for other amounts.

Highest CD Rates for February 2025: Earn More Than Double the National Average with These Top Accounts

What can you expect to earn if you invest $5,000 in a certificate of deposit (CD)?

If you have $5,000 to invest in a CD, here are some example returns for various popular term lengths - six months, one year, three years, and five years.

APYs as of February 5, 2025, based on the banks we monitor at . Earnings are based on APYs and assume interest is compounded on an annual basis.

If you put $5,000 into a one-year CD with the average national interest rate, you would have $5,091 at the end of the year. But if you put $5,000 into a one-year CD with a 4.45% interest rate, which is the highest rate we track, you would end up with $5,222.50.

Would you like to deposit a different amount? Here's how much you'll earn

If you want to put more -- or less -- money into a CD, you can still earn a competitive interest rate. Here are some examples of interest earnings for other deposit amounts.

To calculate interest on a certificate of deposit (CD), you need to know the principal amount, interest rate, and time period. The formula is: Interest = Principal x Rate x Time. The interest rate is usually expressed as a decimal, so you may need to convert it from a percentage. Time is usually given in years. We'll use the formula to calculate interest.

This means you earn interest on your initial deposit and on any interest that has already been earned.

Different banks compound interest in unique ways. Your certificate of deposit (CD) may add interest daily, weekly, or monthly. The more often interest is compounded, the greater the earnings.

To determine exactly how much interest your CD could earn.

Choosing the Perfect CD for You

When you're looking for a CD, a high APY is important, but there are other key factors to take into account too. Ask yourself these questions when you're selecting a CD:

• Membership terms usually range from six months to five years, so choose a plan that matches your schedule.
• The amount of money you need to put into a CD can help you narrow down your choices. Some CDs don't require a deposit, while others may require a deposit of $1,000 or more.
• Some CDs may come with fees, such as monthly maintenance charges or penalties for early withdrawal. These fees can reduce the amount of money you earn. Be sure to carefully review the terms of any CD you're considering to understand what you're getting yourself into.
• Credit unions insured by the National Credit Union Administration are safeguarded for up to $250,000 per account, per individual. Look for CDs from these organizations to keep your funds secure.

More on CDs

• Top CD Rates for February 2025: Earn More Than Twice the National Average with These Leading Accounts
• How Much Can You Earn by Investing $10,000 in a Certificate of Deposit Today?
• This Astonishingly Simple Technique More Than Doubled My Savings in Just One Year

First published on February 8, 2025 at 6:00 a.m. Pacific Time.