Here's how much a 6% CD interest rate could earn you now
Certificate of deposit accounts, otherwise known as CDs, have long been known as a safe and effective way to grow and protect your money.
In exchange for depositing a certain amount of money with a bank — and keeping it untouched for a select period — savers earned a respectable return. But during the height of the pandemic interest rates were cut dramatically and the APY most savers could secure with a CD were minimal and often less than 1%.
But as the pandemic faded and inflation rose interest rates rose once again. CD rates surged exponentially with some as high as 7% right now. And while most experts would recommend taking advantage of these rates while they're still available, some savers would first like to know how much they stand to make by opening a CD today. Below, we'll calculate exactly how much a 6% CD interest rate could earn you now — and show you why this account is preferable to a popular alternative.
See how much more you could be earning with a top CD here now.
Here's how much a 6% CD interest rate could earn you now
To accurately calculate how much a CD with a 6% interest rate could earn in returns, savers will need to account for three factors: The lender they open the account with (some of whom may charge fees that can eat into any earnings), the term (or length) of the CD and the amount of money deposited when opening.
The returns below are based on a variety of deposits, all set at 12 months (a short-term CD). We also crunched the figures on the assumption that your account won't have to pay fees or charges to maintain a minimum balance or deposit and we didn't account for any early withdrawal penalties, which can be equivalent to all of the interest earned to date in the account.
That all noted, here's how much a 6% CD interest rate could earn you now:
- $500 deposit: $30 for a total of $530 after 12 months
- $1,000 deposit: $60 for a total of $1,060 after 12 months
- $2,500 deposit: $150 for a total of $2,650 after 12 months
- $5,000 deposit: $300 for a total of $5,300 after 12 months
- $10,000 deposit: $600 for a total of $10,600 after 12 months
- $15,000 deposit: $900 for a total of $15,900 after 12 months
- $20,000 deposit: $1,200 for a total of $21,200 after 12 months
Start exploring your CD options here now.
The bottom line
As the above figures demonstrate, now is a great time to open a CD. Just don't necessarily take the first offer you receive. Shop around and research some online lenders, too, many of whom may have better options than banks with physical locations. Just don't leave your money in a regular savings account as the returns on those accounts are just 0.47% currently and not even keeping pace with inflation. If your funds are in one of those accounts, then, you're essentially losing money.
