We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners.
CD Investments: How Much Can CDs Earn?
CDs are savings accounts for investing short-term funds. Compare returns on a CD with the calculator below.
Spencer Tierney is a consumer banking writer at NerdWallet. He has covered personal finance since 2013, with a focus on certificates of deposit and other banking-related topics. His work has been featured by The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among others. He is based in Berkeley, California.
Sara Clarke is a Banking editor at NerdWallet. She has been an editor and project manager in newsrooms for two decades, most recently at U.S. News & World Report. She managed projects such as the U.S. News education rankings and the Best States rankings. Sara has appeared on SiriusXM Business Radio and iHeartMedia’s WHO Newsradio and has been quoted in The Salt Lake Tribune, The St. Paul (Minnesota) Pioneer Press and other outlets. She is based near Washington, D.C.
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Certificates of deposit can be considered smart, low-risk investments for some of your money. A CD investment provides guaranteed returns and your money stays federally insured. How much interest you can earn on a CD depends on the rates, which are in a rising rate environment thanks to Fed rate increases. See what CDs can earn below.
CD comparison calculator
Calculate what interest you’d get from two different CDs. To see how rates really matter, keep the deposit and term lengths the same and notice how the interest rate would affect your overall savings.
Here’s an example. If you invested $10,000 in a five-year CD at 0.50% APY, which is close to the national average rate, you would have earned about $253 in interest at the end of five years.
Now let’s try a top rate at an online bank. If you invested that same $10,000 in a five-year CD at 2.80%, your account earns $1,480 in interest, a difference of more than $1,200.
4 elements of CDs that can affect returns
CD rate: This factor determines how much your money grows over time. Longer CD terms tend to have higher rates when looking at one bank’s offerings, but don’t stop at one bank. See our list of the best CD rates.
CD term: CDs have fixed term lengths typically ranging from three months to five years. The longer the term to let your money grow, the more interest you can earn. Learn more about CD terms.
Initial deposit: Unlike regular savings accounts, CDs require the entire sum you want to save upfront. The larger the amount, the more interest you can earn. Banks tend to have minimum deposit requirements as well.
Early withdrawal penalty: If you need to cash out early from a CD, there’s usually a cost. The penalty is not a percentage or fixed fee, but a certain number of months of interest you’ve earned or would’ve earned. Learn more about early withdrawal penalties.
Frequently asked questions
Is a CD an investment?
Yes, a CD can be considered an investment — or a means of generating returns — for your short-term savings. An investment doesn’t refer to only funds in the stock market.
Are CDs a good investment?
Yes, if you’re looking for guaranteed returns with little to no risk. Other types of investments, such as in the stock market, can offer greater returns, but with much greater risk.
How much interest will I earn in a CD?
It depends on the interest rate the bank offers and the length of the CD’s term. Here’s an example: $5,000 invested in a 1-year CD with a 2.00% APY would earn about $100 by the end of the term. Use the calculator on this page to see other combinations.
Can you lose money in a CD?
Yes, but only if you withdraw your money from a CD before the term ends. Most banks charge a penalty fee equal to a certain amount of interest — for example, six months’ worth. Learn more about how to avoid early withdrawal penalties.
Is a CD an investment?
Yes, a CD can be considered an investment — or a means of generating returns — for your short-term savings. An investment doesn’t refer to only funds in the stock market.
Are CDs a good investment?
Yes, if you’re looking for guaranteed returns with little to no risk. Other types of investments, such as in the stock market, can offer greater returns, but with much greater risk.
How much interest will I earn in a CD?
It depends on the interest rate the bank offers and the length of the CD’s term. Here’s an example: $5,000 invested in a 1-year CD with a 2.00% APY would earn about $100 by the end of the term. Use the calculator on this page to see other combinations.
Can you lose money in a CD?
Yes, but only if you withdraw your money from a CD before the term ends. Most banks charge a penalty fee equal to a certain amount of interest — for example, six months’ worth. Learn more about how to avoid
You can find CDs that have rates more than three times the national average. Online banks and online credit unions tend to have the top rates. Check NerdWallet’s best CD rates.
A savings account is a place where you can store money securely while earning interest.
A savings account is a place where you can store money securely while earning interest.
4.00%SoFi members with direct deposit can earn up to 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 1.20% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.00% APY for savings. Members without direct deposit will earn 1.20% APY on all account balances in checking and savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 03/17/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
3.75%3.75% APY (annual percentage yield) with $0 minimum balance to earn stated APY. Accounts must have a positive balance to remain open. APY valid as of 02/14/2023.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
3.30%Your annual percentage yield can be as high as 3.30% based on the following combined rate rewards: direct deposits (not including intra-bank transfers from another account) totaling $1,500 or more each month will earn 0.40%. A qualifying direct deposit is required for the remaining interest rate qualifications to apply. Ten (10) point-of-sale transactions per month using your Rewards Checking Visa® Debit Card for normal everyday purchases with a minimum of $3 per transaction, or enrolling in Account Aggregation/Personal Finance Manager (PFM) will earn 0.30%; maintaining an average daily balance of at least $2,500 per month in an Axos Self Directed Trading Invest account will earn 1.00%; maintaining an average daily balance of at least $2,500 a month in an Axos Managed Portfolio Invest account will earn 1.00%; and making a monthly payment to an open Axos Bank consumer loan (commercial and business loans excluded) via transfer from your Rewards Checking account will earn a maximum of 0.60%.
Monthly fee
$0
Money market accounts pay rates similar to savings accounts and have some checking features.
Money market accounts pay rates similar to savings accounts and have some checking features.
They’re safe. Like savings accounts, CDs are federally insured to protect your money, both at online and traditional banks as well as at credit unions. This means they have minimal risk, whereas investing in the stock market — another option to grow your money — is more unpredictable and can lead to losses, especially in the short term. See more about CD safety.
But CDs have an opportunity cost. The typical CD has a fixed rate, so once you lock up your money for months or years, you close the door to higher rates that might appear.
Bottom line: CDs might be right for you if you want to avoid risky investments and you’ve set aside money you won’t need for some time. (If, on the other hand, access is a priority, check out NerdWallet’s best savings accounts.)
4.00%SoFi members with direct deposit can earn up to 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 1.20% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.00% APY for savings. Members without direct deposit will earn 1.20% APY on all account balances in checking and savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 03/17/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
3.75%3.75% APY (annual percentage yield) with $0 minimum balance to earn stated APY. Accounts must have a positive balance to remain open. APY valid as of 02/14/2023.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
3.30%Your annual percentage yield can be as high as 3.30% based on the following combined rate rewards: direct deposits (not including intra-bank transfers from another account) totaling $1,500 or more each month will earn 0.40%. A qualifying direct deposit is required for the remaining interest rate qualifications to apply. Ten (10) point-of-sale transactions per month using your Rewards Checking Visa® Debit Card for normal everyday purchases with a minimum of $3 per transaction, or enrolling in Account Aggregation/Personal Finance Manager (PFM) will earn 0.30%; maintaining an average daily balance of at least $2,500 per month in an Axos Self Directed Trading Invest account will earn 1.00%; maintaining an average daily balance of at least $2,500 a month in an Axos Managed Portfolio Invest account will earn 1.00%; and making a monthly payment to an open Axos Bank consumer loan (commercial and business loans excluded) via transfer from your Rewards Checking account will earn a maximum of 0.60%.
Monthly fee
$0
Money market accounts pay rates similar to savings accounts and have some checking features.
Money market accounts pay rates similar to savings accounts and have some checking features.
If you're trying to decide between a CD and something less restrictive, there’s a middle-of-the-road option: CD ladders. This is a savings strategy in which you open CDs of varying lengths. One common scenario involves opening five CDs, with terms of one year, two years, three years, four years and five years. The goal is to have one CD maturing each year to give you the option to reinvest or cash out each time. Learn more about CD investment strategies.
See CD rates by term and type
Compare the best rates on certificates of deposit for various CD terms and types:
High-yield savings accounts: These regular savings accounts, generally available at online banks and credit unions, provide some of the best savings rates.
Savings bonds: Similar in function to a CD, a savings bond lets you earn interest on an upfront sum of money that you can’t access for a period. Instead of lending money to a bank as you do with a CD or savings account, you lend to the U.S. government. Given high inflation rates, a Series I savings bond, or I bond, has an inflation-adjusted rate that may be appealing.
