How much will a $20,000 CD make in a year?

If inflation and higher interest rates have left you feeling hopeless, don't worry. Even though today's economic circumstances aren't ideal, that doesn't mean that there aren't still ways to protect and grow your money. That's because higher interest rates don't just mean higher borrowing costs. They also mean greater returns on your savings accounts. 

There are multiple ways to earn these higher interest rates now, ranging from high-yield savings to high-yield checking to even certificates of deposit (CD) accounts. While rates on the latter type were under 1% just a few years ago, it's not difficult to find a CD now with a rate of 5.5% or higher. For some qualified savers, there's even a 7% CD that can be secured.

But when looking for CDs, it helps to know exactly how much you'll make by depositing your money into one now. While even a $1,000 deposit could be worth it, the more you put in the more you'll get out. So a $5,000 CD will make even more and a $10,000 CD deposit will do even better. But what about a $20,000 CD? How much will a $20,000 CD make in a year at today's rates? That's what we will break down below.

Start exploring CD accounts here now to see how much more interest you could be earning.

How much will a $20,000 CD make in a year?

The highest interest rates on CD accounts generally come with online banks and lending institutions. Because these banks don't have the same overhead costs that a bank with a physical branch does, they're often able to pass on those savings to customers in the form of higher interest rates. So if you want to earn the most on your money, strongly consider opening a CD online now. 

That said, here's how much you could expect to make by depositing $20,000 into a one-year CD now, broken down by four readily available interest rates (interest compounding annually):

• At 6.00%: $1,200 (for a total of $21,200 after one year)
• At 5.75%: $1,150 (for a total of $21,150 after one year)
• At 5.50%: $1,100 (for a total of $21,100 after one year)
• At 5.00%: $1,000 (for a total of $21,000 after one year)

See how much you could be making with a top-earning CD account here now.

Other considerations

A high rate isn't the only major benefit of opening a CD now, even if it is one of the more well-known features. A CD account, for example, also comes with a locked interest rate. This means that if rates drop in the future your account will still earn interest at the higher APY it was opened with. This is a particularly attractive option for those who are predicting a rate drop next year but still want to earn today's high rates long into the future. 

But because CDs are locked, you'll need to pay a penalty to access your money before the term expires. While, on the surface, this may not be a beneficial feature, it can actually work in your favor by disincentivizing impulse purchases and spending. By knowing that you'll lose some (or all) of the interest you earned to date, you'll likely be more inclined to leave your money untouched, letting it grow at that higher rate for the full CD term.

Learn more about your CD options here now.

The bottom line

The returns you can get on a CD now are the highest they've been in years. For those looking to deposit significant sums of money, there's the potential to make $1,000 or more over the next 12 months, simply by depositing $20,000 into a CD now. But there are other advantages, too, namely a locked rate that will keep you earning high returns regardless of the overall rate environment and an account structure that will prevent you from easily tapping into the money to make other unnecessary purchases.