NerdWallet’s CD calculator shows what you can earn with a CD, a low-risk investment that you can leave untouched for months or years. Like regular savings accounts, CDs have federal deposit insurance for up to $250,000. Use the CD calculator below to see total interest, or, if you’re looking for the best CD rates, skip ahead in the story to check out three strong options.
» If access to funds is important, see our best high-yield savings accounts
Shop for the best CD rates
Some online-only banks have one-year CDs with annual percentage yields over 2% and five-year CDs earning even more. Here’s a closer look at some of the highest CD rates on the market:
Compare the top CD rates
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What term length should you get?
The longer the term, the higher the rate tends to be. Terms typically range from three months to five years, so see how CDs fit in with your savings goals. Most have early withdrawal penalties, so be sure you won’t need your money before the term expires.
How do CD rates work?
CD rates are quoted as an annual percentage yield, or APY, which is how much the account earns in one year including compound interest. Banks generally compound interest monthly or daily. An interest rate is similar to APY but before factoring in compound interest. For more details, see our explainer on APY.
How much interest will you earn on a CD?
This varies based on your deposit, CD rate and term length. For example, a $10,000 deposit in a five-year CD with 3% APY will earn nearly $1,600 in interest, while a CD with 0.01% APY, all other factors the same, only earns $5 in interest. CD rate is quoted in annual precentage yield.
What should I know when choosing CDs?
- Prioritize finding a high interest rate. Not every bank has competitive rates on their CDs.
- Avoid early withdrawal fees. Although short-term CDs mean less time to wait to access your money and less need to incur the penalty to get money early, long-term certificates mean a beefier rate.
- Keep in mind that CD rates have climbed recently, so locking up cash for as many as five years might mean you miss out on rising rates.
Are there other accounts I should consider?
Consider opening an online brokerage account if you’ve already built a robust emergency fund and want to boost your long-term savings. Although these financial products come with more risk than CDs, they could lead to higher returns.
Picking the right broker comes down to your priorities. Some investors are willing to pay more for a top-notch platform; others count costs above all else. With brokerage accounts, you don’t have to worry about early withdrawal penalties, but your funds may be more difficult to access in a pinch, given that you’ll likely need to sell some investment shares before you can devote that money to anything else.
» For in-depth guidance, check out NerdWallet’s best online stock brokers for beginners.