How much does a $5,000 CD make in 6 months?
While today's inflationary environment has hurt the wallets of millions of Americans, the news hasn't been all bad. Unemployment stayed steady last month, according to a Friday report, with the economy adding 336,000 jobs in the past month, far beyond expert predictions. And, higher interest rates have meant significantly greater returns for savers, too.
While interest rates on regular savings accounts are just 0.45% currently, rates on high-yield savings and certificates of deposit (CD) accounts are many times that amount. In fact, by simply shopping around for a lender online now, you should easily be able to find an account with a rate 12 times the national average.
Before getting started, however, savers should crunch the numbers so they know exactly how much they can expect to earn on their deposit. This is particularly important for those who are planning on opening a CD, as the rate you open it with will be locked for the full CD term.
Start by exploring your CD account options here to see how much interest you could be earning.
How much does a $5,000 CD make in 6 months?
Each bank and lender is different, as are the interest rates they will offer on a CD. Typically, online banks offer the highest CD rates available, although it's possible to get a competitive rate with your local branch. That said, rates on CDs right now are currently close to 6%, with the possibility of surpassing that rate if and when the Federal Reserve moves rates upward again.
For reference, here's how much savers can currently expect to make with a $5,000 CD in six months, with three different interest rates:
- At 5.50%: $135.66 (for a total of $5,135.66 after six months)
- At 5.25%: $129.57 (for a total of $5,129.57 after six months)
- At 5.00%: $123.48 (for a total of $5,123.48 after six months)
Get started with a top interest-earning CD here!
Other considerations
While the interest rates on CDs are often the top consideration when looking for an account, they should not be the only ones. Remember, just like most other savings accounts, interest on CDs will compound over time. This will accumulate either daily or at the conclusion of your CD term, so be sure to understand which it is when speaking to the lender you want to use.
But don't just look at rates and compound interest. Be sure to also investigate any penalties or maintenance fees that could potentially eat into your bottom line. A high interest rate and compound interest are great, but excessive fees and penalties could easily reduce the efficacy of both.
As such, it pays to shop around to find a CD account with a competitive rate and little or no fees. You may even be able to secure an account that won't penalize you for withdrawing your funds early, although those tend to have lower interest rates than their traditional counterparts.
But whatever you do, do your research first. It'll help ensure that the CD you ultimately chose was the best for you and your goals. Start shopping for a top CD here today.
The bottom line
While the overall economy may still be battling inflation, savers can make the best of today's high rates by opening a CD now. With a $5,000 deposit into a six-month CD now, you could make more than $100. And that doesn't include any compound interest you could tack on!
But be sure to shop around for the best accounts and terms, ideally looking for an account online with high rates and minimal or no fees. By opening an account with these features, you'll be best positioned to protect and grow your savings — despite any broader negative economic activity.
