A $10,000 CD could earn $411 in a year this July
CBS News calculations show longer CD terms can lift earnings sharply, but savers give up easy access to their cash.
By Sal Moretti · Money Reporter
3 min read
A saver putting $10,000 into a certificate of deposit this July could earn about $411 in one year at typical current rates, according to CBS News calculations.
The payoff climbs with longer terms. CBS News reported that CD yields remain far above what many traditional savings accounts pay, after deposit rates rose during the Federal Reserve’s rate-hiking cycle and stayed elevated as the central bank shifted to a more cautious stance.
That leaves savers with a trade-off: lock in a rate and let the money sit, or keep cash more accessible and likely earn less.
What $10,000 can earn in CDs now
CBS News calculated the interest on a $10,000 deposit using today’s typical CD rates, assuming the money stays in the account for the full term.
- 6-month CD at 4.10%: $202.94 in interest
- 1-year CD at 4.11%: $411.00 in interest
- 3-year CD at 4.15%: $1,297.38 in interest
- 5-year CD at 4.20%: $2,283.97 in interest
- 10-year CD at 4.30%: $5,235.02 in interest
The spread between the listed rates is small, but time does the heavy lifting. A 10-year CD at 4.30% would produce more than $5,200 on the same $10,000 deposit, according to the CBS News figures.
That bigger total comes with a catch. CDs generally require savers to keep money deposited until the maturity date to avoid early withdrawal penalties, CBS News reported.
For that reason, the longest term is not automatically the strongest choice for every saver. Someone who expects to need the money for a home purchase next year may prefer a 1-year CD over a 5-year account, even if the longer option would produce more interest over time.
How regular savings accounts stack up
The comparison gets sharper against traditional savings accounts. CBS News reported that many brick-and-mortar savings accounts still pay annual percentage yields below 1%.
At today’s average 0.38% APY, a $10,000 balance in a traditional savings account would earn about $38 over one year, according to CBS News. A 1-year CD at 4.11% would earn roughly $411 over the same period.
Savings accounts still have one big advantage: access. CBS News reported that savers can generally withdraw money from a savings account when needed without facing the early withdrawal penalties attached to CDs.
That makes traditional savings accounts a better fit for emergency funds or cash needed on short notice, while CDs can make sense for money set aside for later goals.
CBS News also pointed to high-yield savings accounts as another option. Many online banks offer rates competitive with shorter-term CDs, but those rates are variable and can fall if conditions change. A CD locks the rate for the full term.
For savers with $10,000 ready to park, the choice comes down to timing. CBS News reported that opening a CD this July could generate about $203 over six months or about $5,200 over 10 years, depending on the term selected.
This story draws on original reporting from CBS News.