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CBS News
18 hours ago
- Business
- CBS News
How much will a $10,000 3-year CD earn now?
The interest earnings with a $10,000 3-year CD will be significant if savers get started with an account now. Getty Images Three years is a long time, and in a financial sense, it can feel like a lifetime. In June 2022, for example, the inflation reading was at its highest point in decades, coming in at 9.1% as millions of Americans struggled with higher costs. Now, in June 2025, it's barely over 2% and closing in on the goal the Federal Reserve set to support additional interest rate cuts. That's a plus for borrowers saddled with higher rates, but it's not welcome for savers who have been able to take advantage of the high-rate climate with big returns on select savings vehicles. A certificate of deposit (CD) account has been one of the better ways to do so. Rates on these accounts have been over 4% or higher in recent years, and the rates are fixed, meaning savers can precisely calculate the interest they stand to earn when the account matures. And while it may not seem advantageous to lock a portion of your money into one of these accounts for an extended period, as has been demonstrated over the last decade, a lot can change in a few years. And the high rates you can secure now may not be available if you wait much longer. That noted, if you're considering a large, five-figure deposit into a long-term CD, you should start by calculating the interest-earnings potential. Fortunately, this is simple to do with precision. So, for example, what could a $10,000 deposit into a 3-year CD earn savers if opened now? That's what we'll calculate below. See how much more interest you could be earning with a high-rate CD here now. How much will a $10,000 3-year CD earn now? According to Bankrate, 3-year CDs come with rates between 4% and 4.15% right now. While those may not be as high as the most competitive short-term CD rates, the extended interest-earning timeline easily beats out the slightly higher short-term returns. Here, then, is what a $10,000 3-year CD can earn if opened this June, assuming no early withdrawal penalties are issued in the next 36 months: $10,000 3-year CD at 4.00%: $1,248.64 for a total of $11,248.64 after 36 months $1,248.64 for a total of $11,248.64 after 36 months $10,000 3-year CD at 4.15%: $1,297.38 for a total of $11,297.38 after 36 months So, if you want to earn more than one thousand dollars worth of guaranteed interest on your money, a $10,000 3-year CD offers the simple way to do it. Just be sure that you can keep this much money frozen for that long as early withdrawal penalties on CD accounts of this length can be costly, potentially eliminating most or even all of the interest you've earned to the point of regaining access. But if you can adopt a "set it and forget it" approach, this account term in this amount could prove to be very favorable when you go to cash out in the summer of 2028. Earn more interest on your money with a top long-term CD here today. What about a $10,000 money market account instead? If you want to earn a decent interest rate on your $10,000 but don't want to forego access to your funds the way you would with a CD, a money market account may appear advantageous. This account type has rates as high as many CDs, it won't require you to lock your funds away, and, depending on the banking institution, the account may even have check-writing abilities, among other features. But the rate here is, unfortunately for savers, variable and subject to change as soon as this summer if interest rate cuts are issued. So the changes that are likely to occur over a three-year period — the same time you could consistently be earning 4.15% on your CD account — are likely to be stark and arguably don't justify using this as a place to keep your $10,000. Or you can take a risk and see how much longer rates remain elevated. It will depend on your financial circumstances, goals and, ultimately, your need to have direct access to your cash at all times. The bottom line A $10,000 3-year CD can earn savers a substantial return if opened now. And that can't be understated in the unique economic climate of recent years. Rates may rise during those 36 months and they may fall lower again, but the returns being offered here are concrete and reliable. If you can afford to do so, it makes sense to get started sooner than later, while these rates (and earnings) are still readily available to savers. Have more questions? Learn more about your current CD account options here.
Wall Street Journal
a day ago
- Business
- Wall Street Journal
Today's High-Yield Savings Rates for June 27, 2025: Up to 4.66%
Pay attention to restrictions that sometimes come with HYSAs. For example, some savings accounts limit the number of withdrawals and transactions you can complete in a month. Others might require a minimum deposit to open an account or have limits on your APY based on your balance. How traditional savings accounts work Traditional savings accounts work the same as HYSAs. However, unlike high-yield accounts that are often found online with no brick-and-mortar branches, traditional savings accounts are usually held at banks that have physical branches. In some cases, you can get above-average yields with more traditional accounts held at local credit unions and community banks with physical locations, but often the best savings rates are found with online-only accounts. Traditional savings accounts might have transaction limits, deposit requirements and tiered rates based on your balance. HYSA dependency on Fed rate The Federal Reserve meets eight times a year to announce its benchmark federal-funds rate (sometimes called the Fed rate). This is the rate banks charge each other for short-term lending. High-yield savings accounts are highly dependent on the Fed rate. When the target rate rises, savings yields generally rise as well. For savers, this can mean higher returns for letting their money sit at a bank or credit union. On the other hand, when the Fed cuts its benchmark rate, yields tend to fall. Savings yields can fluctuate regularly, but they are most likely to significantly change when the Federal Reserve announces a cut or increase of its benchmark rate.
CBS News
2 days ago
- Business
- CBS News
$10,000 short-term CD vs. $10,000 high-yield savings account: Which earns more interest now?
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. A $10,000 deposit into a short-term CD or high-yield savings account could be beneficial for savers right now. Getty Images A certificate of deposit (CD) account has a higher interest rate than many alternatives, making it an attractive option for savers looking to earn more interest on their money. But it comes with a well-known caveat: Savers will need to leave their money untouched in the account for the full term to earn that interest. Withdraw it prematurely, and it will result in the account being hit with a costly early withdrawal penalty. But leaving the money in the account can be daunting when CD terms last more than a year. Short-term CDs, however, mature in under 12 months. And, contrary to previous economic periods, rates here are often higher than they are on long-term counterparts, making them a viable option for those savers who don't want to forego access to their funds long-term but still want to earn a high rate. This makes it a particularly smart place to park $10,000 or more right now. But with similarly high rates available with high-yield savings accounts – and the flexibility those accounts offer that CD accounts do not – it behooves savers to calculate the potential interest earnings for both to determine which makes more sense for their five-figure deposit now. Below, we'll do the math for both account types if opened now, at the end of June 2025. See how much more interest you could be earning with a high-rate CD here. $10,000 short-term CD vs. $10,000 high-yield savings account: Which earns more interest now? Short-term CDs are accounts with maturity dates under one year (think three months, six months or nine months). Rates change based on each term, while the top high-yield savings account rates are approximately the same right now. That said, high-yield savings account rates are variable and subject to change over time, especially over extended periods, meaning they're unlikely to be the same in nine months the same way a 9-month CD rate will be. Here's what the three short-term CDs would earn and what the high-yield savings account would earn during the same period, assuming the high-yield savings account rate remains constant: $10,000 3-month CD at 4.40%: $108.23 for a total of $10,108.23 $108.23 for a total of $10,108.23 $10,000 high-yield savings account at 4.30% after three months: $105.81 for a total of $10,105.81 $105.81 for a total of $10,105.81 Difference between the two accounts: The 3-month CD earns $3.23 more $10,000 6-month CD at 4.51%: $223.01 for a total of $10,223.01 $223.01 for a total of $10,223.01 $10,000 high-yield savings account at 4.30% after six months: $217.63 for a total of $10,217.63 $217.63 for a total of $10,217.63 Difference between the two accounts: The 6-month CD earns $5.38 more $10,000 9-month CD at 4.26%: $317.83 for a total of $10,317.83 $317.83 for a total of $10,317.83 $10,000 high-yield savings account at 4.30% after nine months: $328.22 for a total of $10,328.22 $328.22 for a total of $10,328.22 Difference between the two accounts: The high-yield savings account earns $10.39 more So, in two of the three above examples, the CD account earned more while the reverse was true with the 9-month CD. That noted, the interest earnings for either account are approximately the same. To better determine which is more appropriate for their circumstances, then, savers will need to look beyond the interest rate and evaluate the potential for rates to cool in the future. If they're confident that rates will continue to decline, then they may be better served by locking in a high rate with a CD instead, while still readily available. But if they think rates will remain relatively steady, a high-yield savings account may be favorable. And, if they're unsure, they may be truly best served by depositing $5,000 into each account type now to exploit the benefits of both. Explore your CD and high-yield savings account options here and get started. The bottom line In some scenarios, a short-term CD is clearly the better savings option while, in others, a high-yield savings account is. But with a $10,000 deposit into either right now, savers will realize approximately the same interest-earnings over time. In other words, if you're considering either, there's really no wrong option. Just make sure to keep little to no money in a traditional savings account now. With an average interest rate of 0.38% currently, you're essentially losing money by not making the switch to a CD or high-yield savings account instead.
CBS News
3 days ago
- Business
- CBS News
How much will a $20,000 2-year CD account earn if opened now?
Savers can earn a significant amount of interest by depositing $20,000 into a 2-year CD this money into a certificate of deposit (CD) account will require some sacrifice on behalf of the saver. To earn the interest the account offers, savers will need to keep their money untouched in the account for the full CD term (or length). Withdraw even a portion of it before the account matures, and you'll get stuck with an early withdrawal penalty that could wipe out all or most of the interest earned on the account to date. While this can be manageable for small amounts with CD terms of just a few months, it becomes much more challenging to do so with large deposit amounts and accounts of longer terms, such as one year or more. But will that loss of accessibility be worth it? If you're considering a five-figure deposit, like $20,000, into a 2-year CD account, for example, it could be. The interest-earning possibilities here are significant and could be valuable for many savers, especially those looking for a reliable return and stability in today's unpredictable economic climate. To better determine this type of CD account's worth, then, it can be useful to calculate the interest earnings. Savers may be surprised at how much they can potentially make. Start earning more interest on your money with a high-rate CD here. How much will a $20,000 2-year CD account earn if opened now? Opening a CD account online makes sense, especially in today's rate climate, in which rate cuts are widely expected later this summer. Online banks tend to have lower maintenance costs than banks with physical locations. Those savings can then be passed on to savers in the form of higher interest rates on CDs and high-yield savings accounts. A quick look around online, then, shows 2-year CD account rates comfortably over 4%. Here's what a $20,000 deposit would earn for each readily available rate: $20,000 2-year CD at 4.10%: $1,673.62 for a total of $21,673.62 $1,673.62 for a total of $21,673.62 $20,000 2-year CD 4.15%: $1,694.45 for a total of $21,694.45 $1,694.45 for a total of $21,694.45 $20,000 2-year CD at 4.40%: $1,798.72 for a total of $21,798.72 So savers can earn at least $1,673 with a $20,000 2-year CD if opened this June, and potentially more if they take the time to shop around for a high-rate CD online. That said, with the likelihood of interest rate cuts growing for when the Federal Reserve meets this summer, and the chances of those rate cuts impacting what savers can earn with CDs, it behooves savers who are considering this type of account to be proactive. These high rates and great returns may not last much longer. Get started with a long-term CD online today. What about a $20,000 1-year CD account? While the potential to earn more than $1,600 on your funds may sound attractive, it can be daunting to keep your money frozen for 24 months in a CD. If that doesn't sound manageable, a 1-year CD account will cut the time you lose access to your funds in half – and still result in a sizable return, albeit a lower one than the 2-year CD. Here's what earnings on a $10,000 1-year CD account would look like instead: $20,000 1-year CD at 4.40%: $880.00 for a total of $20,880.00 $880.00 for a total of $20,880.00 $20,000 1-year CD at 4.45%: $890.00 for a total of $20,890.00 $890.00 for a total of $20,890.00 $20,000 1-year CD at 4.66%: $932.00 for a total of $20,932.00 Although the returns here aren't as high as the 2-year CD option, they're still significant and they'll allow savers to earn more on their money while still giving them protection for the next year against any market uncertainty, which may be all savers require right now. The bottom line A $20,000 2-year CD account comes with returns over $1,600 if opened now while a 1-year CD account for the same amount comes with interest over $800. But these rates and the interest-earning opportunities won't be around forever – or even, potentially, into the fall. So, if you want to earn more on your money and can afford to keep it frozen in an account for a year or longer, a long-term CD could be the smart place to park your funds right now.
CBS News
4 days ago
- Business
- CBS News
$10,000 1-year CD vs. $10,000 high-yield savings account: Which will earn more interest?
Both 1-year CD and high-yield savings accounts offer savers unique benefits right now. Getty Images You never want to put your money into an account that won't earn interest. And in the economic climate of recent years, you really couldn't afford to. With inflation at a decades-high, interest rates at their highest point in years and the cost of everyday expenses elevated, your money needed to work for you as much as possible. Fortunately, for those who took advantage, both certificates of deposit (CDs) and high-yield savings accounts offered effective pathways to do this, with both savings vehicles offering interest rates over 4% and sometimes even higher. But the economy is evolving again. Inflation is down multiple points from where it was in June 2022, for example, and interest rate cuts were issued in 2024 and could be issued again later this year. This means that savers will need to be a bit more strategic in their approach and it may mean reevaluating where they keep large, five-figure amounts of money right now. With a CD, they may be able to lock in long-term protection with a 1-year term, but with a high-yield savings account, they can earn a high rate and maintain access to their funds. To better determine which option is more beneficial for a $10,000 deposit made now, it can be helpful to calculate the interest-earning opportunity for both. Below, we'll complete the calculations. See how much more money you could be earning with a high-rate CD here. $10,000 1-year CD vs. $10,000 high-yield savings account: Which will earn more interest? Calculating the interest on either account type is relatively straightforward. You'll need the deposit amount (in this case, $10,000), the interest rate (4.45% for 1-year CDs and 4.30% for high-yield savings accounts) and the length of the account (both 12 months). That said, CD interest rates are fixed and high-yield savings account rates are variable, so predicting the latter interest earnings is difficult to do with precision as the rate can and likely will change over time. That said, here's what each could earn now, assuming the high-yield savings account rate remains constant: $10,000 1-year CD at 4.45%: $445.00 for a total of $10,445.00 $445.00 for a total of $10,445.00 $10,000 high-yield savings account at 4.30% after one year: $430.00 for a total of $10,430.00 Not only will you earn around $15 more with a 1-year CD in this example, but those earnings will be guaranteed versus the high-yield savings account, which won't be thanks to the variable rate. And while that could change positively (if rates are hiked and high-yield savings account rates rise alongside it), that appears unlikely now. With the CME Group's FedWatch tool listing a rate cut at more than a 75% likelihood for September, which will lead to a reduction in savings rates, perhaps before that point, many savers would benefit from depositing their $10,000 into a CD account instead. Get started with a 1-year CD here. What about money market accounts? A money market account could be a viable alternative for those looking to deposit $10,000 or more right now. Interest rates on these accounts are high and comparable to the top high-yield savings accounts. Plus, money market accounts won't require you to forego access to your money like a CD would, and they come with other features, like check-writing. But the big caveat remains the same: These accounts also have variable interest rates, which are also subject to decline later this year, making them a risk for savers looking to exploit today's high-rate climate for an extended period. The bottom line A $10,000 1-year CD earns more interest than a $10,000 high-yield savings account if opened now and that interest will be guaranteed, unlike a high-yield savings account with a variable rate. That said, you'll only be able to earn that $445 if you keep your money in the account for the full CD term. Take it out early and you'll get hit with an early withdrawal penalty, so keep that in mind when comparing these two accounts.
