How much can you earn with a long-term CD?
If you're trying to save money today, you likely already know how valuable current high interest rates can be for your savings balance. High-yield savings accounts and certificates of deposit (CDs) are incredibly valuable for protecting money you don't want to risk in the market while growing your balance with interest over time.
But after the Federal Reserve's latest interest rate pause — and uncertainty about future rate movements — one specific type of savings vehicle may be growing more appealing for savers: long-term CDs. If you expect interest rates to start falling again in the near future, using this account type to lock in a great rate today can help you grow your interest earnings in the months and years ahead.
Learn more about today's top CD rates and see how much you can get now.
How much can you earn with a long-term CD?
Even though long-term CD interest rates are slightly lower than you'll find with short-term CDs, you'll still get a significant return over the longer time period. Because of that long time commitment, a long-term CD may even grow more than you expect over the account's lifetime.
Say, for example, you open a long-term CD today with a $5,000 balance — close to the median amount most recently reported by the Survey of Consumer Finances. The CD has a five-year term and earns 4.50% APY. As long as you don't withdraw early and incur a penalty fee, you'll increase your original deposit by about $1,230 when your CD matures, for a total balance of $6,230.
If you increased your original deposit to $10,000, you could earn even more. For a long-term CD with the same account details, a $10,000 deposit could grow by $2,461 over the five years, for a total balance of $12,461 upon maturity.
Also, remember that a big benefit of earning interest with long-term CDs is the ability to compound your interest over the CD term. Some banks may display both a CD interest rate and APY on their websites. That's because, while you'll pay a fee to withdraw your deposit early, you may be able to cash in your interest earned without any penalty. But to earn the full APY, you'll need to leave the full balance and allow your interest to compound over time.
Figure out how much you can earn with a long-term CD by comparing your savings balance and today's top rates here.
Best long-term CDs today
These are some of the best interest rates you can score right now on CDs terms ranging from five to 10 years. Each of the accounts below are from online banks that offer FDIC insurance up to $250,000 limits (per depositor, per account).
First Internet Bank of Indiana: 4.59% APY (5-year CD)
Perhaps the highest long-term rate right now comes from First Internet Bank of Indiana's five-year CD. You'll get 4.59% APY when you deposit at least $1,000 upon opening, and there are no monthly fees.
If you were to open this CD today with a $10,000 deposit, you would have a total of about $12,515 when the CD matures.
Popular Direct: 4.53% APY (5-year CD)
The Popular Direct five-year CD earns a similarly high 4.53% APY right now. There are no monthly fees, but you'll need to deposit at least $10,000 to earn interest.
Assuming you make that deposit, your CD balance would be around $12,479 when the CD term ends.
CFG Bank: 4.50% APY (5-year CD)
CFG Bank's five-year CD offers 4.50% APY. This CD requires only a $500 minimum to open, and you must maintain that amount to continue earning interest.
With a $10,000 starting balance, CFG's 4.50% APY can boost your balance to $12,461 by the end of the five-year term.
Barclays Bank: 4.35% APY (5-year CD)
Though it earns a slightly lower rate, the five-year CD from Barclays Bank still has a lot of potential interest earnings at 4.35% APY. What's more, this account charges no fees and has no minimum balance requirement.
If you opened this account today with a $10,000 deposit, it would grow to a total of $12,372 by the time your CD matures.
Marcus by Goldman Sachs: 3.70% APY (6-year CD)
If you're looking for a bit longer than a five-year term, Marcus by Goldman Sachs offers a six-year CD that earns 3.70% APY. You can start earning that rate after depositing at least $500 in the account.
Using the same $10,000 deposit example, this account will increase your balance to $12,435 by the end of the six-year term.
Discover Bank: 3.80% APY (10-year CD)
The 10-year CD from Discover Bank can help you maintain a great rate for 10 years — that's a decade of interest earnings. However, with a CD term this long, make sure you can commit to the full term without needing to withdraw. The account earns 3.80% APY with a minimum deposit of $2,500.
If you make a $10,000 deposit, you'll have around $14,520 when the CD matures.
Compare more of today's top CD rates to find the right account for your savings goals.
The bottom line
Long-term CDs offer the chance to lock in a great rate today — whether we're already at or close to peak interest rates. Before you make your deposit, make sure you understand how much growth you can get over time with this type of CD and whether it's worth it for your goals. If there's a chance you may need to withdraw early and take on a penalty fee, or you need access to your balance at a moment's notice, a different savings option could be a better fit.
One of the best ways to get started is by comparing today's best CD rates alongside your timeline and potential deposit. Find out how much you can earn here now!
