How much will a $15,000 long-term CD make?
2023 has been a difficult year for borrowers, millions of whom have had to contend with higher interest rates due to inflation and the elevated rates meant to combat it. It's been a much better year, however, for savers. Thanks to those same high rates, savers can earn exponentially more on their money than they would have just a few years ago. This has been particularly true for those who have opened certificates of deposit (CD) and high-yield savings accounts. Even high-yield checking accounts have attractive returns for users right now.
That said, before getting started, it helps to know exactly how much you can expect to earn with one of these accounts. While high-yield savings accounts have variable rates, CDs are much easier to budget for as their rates are locked for the CD's full term. For many savers, it may make sense to lock in a long-term CD rate right now. They may not be quite as high as the best short-term ones, but they're very competitive and they'll last for years, during which time many forecast rates to drop. Below, we'll break down precisely how much you could make by depositing $15,000 into a long-term CD now.
Start by exploring your CD options here to see how much more you could be earning on your money.
How much will a $15,000 long-term CD make?
Long-term CDs are considered to be accounts with terms longer than 12 months. Options include 2-year, 3-year and 5-year CD accounts. Rates will vary based on the lender and other factors (you're more likely to get a higher rate with an online bank, for example). But they'll all generally be in the same rate range. And the longer you keep your money in the account, the more you'll make.
That all being said, here's what you can expect to make if you open a long-term CD with a $15,000 deposit now:
2-year CDs:
- At 5.30%: $1,632.13 in earnings for a CD total of $16,632.13
- At 5.00%: $1,537.50 in earnings for a CD total of $16,537.50
3-year CDs:
- At 5.50%: $2,613.62 in earnings for a CD total of $17,613.62
- At 5.25%: $2,488.70 in earnings for a CD total of $17,488.70
5-year CDs:
- At 5.25%: $4,373.22 in earnings for a CD total of $19,373.22
- At 5.00%: $4,144.22 in earnings for a CD total of $19,144.22
Get started with a high-earning, long-term CD here today!
Other CD considerations
While a CD can be beneficial for many, there are multiple considerations to take into account. For starters, the interest rate environment could change in 2024. So if you want to take advantage of today's high rates, you may want to act now before the window of opportunity closes. If inflation continues to cool, interest rates could freeze or even come down a bit in the new year, thus resulting in smaller returns on these account types.
Savers should also know that they'll have to pay early withdrawal penalties if they take their money out of the account before the term ends. The exact penalty will depend on the lender in question, but it can add up to a significant portion (or all) of the interest you've earned on the account to the point of withdrawal. So don't deposit more than you're comfortable with leaving untouched.
Finally, in a reverse from historical trends, rates on short-term CDs are generally (but not always) better than those on long-term ones right now. Accordingly, if you want to earn a higher rate of return but don't want to keep your money locked away for years to come, you should instead explore your short-term CD options.
The bottom line
Now is a great time to open a CD, whether it be a long-term or short-term one. For those willing to keep their money in the account for multiple years, the reward could be thousands of dollars in interest on a $15,000 deposit. But these rates won't last forever, so it behooves savers comfortable with long-term CD restrictions to act now while these elevated rates are still available. By doing so, they'll essentially be giving themselves thousands of dollars to use in the years to come.
