This Is How Much You Can Make With $10K in Today’s Top-Paying CDs

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CD rates are higher than they’ve been in 22 years. Learn what happens when you deposit $10,000 at today’s best rates. 

Before 2023, certificates of deposit (CDs) were hardly worth your time — or savings. Sure, it was possible to get a CD with a 2% or 3% rate in 2022, but with inflation at levels more than twice that, it was hardly worth the risk of locking money away for the long term.

Fast forward to the second half of 2023 and CDs are surprisingly cool again. Many of the top-paying CDs have rates far above 5%, with some banks and credit unions offering terms that are nearly 6%. With rates that high, now might be a good time to lock money you won’t need for the near-term, especially if you snag one of today’s top-paying CDs.

A $10k deposit could earn you $500 over 12 months

With these historic rates in mind, how much would you earn on a $10,000 deposit? For comparison, let’s take a look at a few different terms and potential APYs.

Earning between $500 and $550 on a 12-month CD sounds pretty good to me. But even a quick $120 to $135 on a three-month CD (or $247 to $272 for a six-month CD) can prove beneficial, especially if you don’t want to lock your money up for a longer term.

Long-term CDs, such as those that mature between two and five years, will have smaller APYs, but I wouldn’t dismiss them entirely. Truth is, at some point, the Fed will start cutting rates and CD providers will likely follow course. If you lock into a great rate on a 5-year CD, you can earn guaranteed interest even if the market’s CD rates fall below yours. A 5-year CD that has a 4.30% would earn you about $2,300 in total interest after your term ends — a solid amount of savings.

Keep the earnings going with a CD ladder

Considering the high rates on today’s CDs, now might be a great time to build a CD ladder. This would involve getting multiple CDs with short and long terms. The CDs that mature sooner ensure you’re only a few months away from accessing some cash. You will need a good amount of savings on hand to build a CD ladder, but $10,000 could be sufficient to string three or four CD terms together.

One thing to consider: CD rates are correlated with the Fed’s monetary policy, meaning when the Fed raises its fund rate, CD rates tend to follow. Since the Fed doesn’t have a clear long-term plan for its fund rate, many banks and credit unions are offering higher rates on short-term CDs, but those high rates won’t stick around forever. If you believe a CD is the best place for your savings, don’t hesitate to look at your options.

All in all, this is shaping out to be a great year for savers, with both CDs and high-yield savings accounts earning at rates we haven’t seen in decades. Who knows how long this will last — take advantage of it now if you have extra savings before rates start decreasing.

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