A certificate of deposit (CD) has often been a great way to protect your money. But in recent years the returns on this type of account were minimal, leading many to explore other ways to grow and safeguard their funds. 

However, as inflation rose and corresponding interest rates meant to tame it grew alongside it, the rates on CDs rose exponentially. While they hovered around 1% in 2020 and 2021, finding a CD today with an APY up to 6.17% is not difficult. 

Before getting started on the CD account search, however, some savers may want to first know how much they stand to make by the time the CD term has matured. While 6.17% is a great rate, it may be better to crunch the numbers with a more readily available 5% APY now. Below, we’ll do just that so that you can determine how much you’ll make with a 5% CD interest rate.

Start earning more on your savings with a top CD account here now.

How much can you make with a 5% CD interest rate?

The amount of money you can make with a 5% CD interest rate is dependent on three key factors: the amount you deposit, the length of your CD (also known as the term) and the lender you open the account with (as some may not charge any fees while others may charge exorbitant ones). 

Below, we’ve broken down what to expect based on a series of different deposit amounts, all set for a one-year CD term. We’ve also assumed that your account won’t have a minimum deposit or balance requirement and, thus, won’t get hit with any fees. We also assumed that you wouldn’t withdraw the money early, thus seeing your interest cut via an early withdrawal penalty.

That all noted, here’s how much you can expect to make with a 5% CD interest rate:

• $500 deposit: $25 for a total of $525 after 12 months 
• $1,000 deposit: $50 for a total of $1,050 after 12 months
• $2,500 deposit: $125 for a total of $2,625 after 12 months
• $5,000 deposit: $250 for a total of $5,250 after 12 months
• $10,000 deposit: $500 for a total of $10,500 after 12 months
• $15,000 deposit: $750 for a total of $15,750 after 12 months
• $20,000 deposit: $1,000 for a total of $21,000 after 12 months 

Start making more money by opening a CD with a 5% interest rate today.

The bottom line

As the above figures demonstrate, CDs are a great way to boost your bottom line right now. But savers considering this route should be proactive. CD interest rates are likely to fall later this year if the Federal Reserve proceeds, as many are forecasting, to cut the benchmark interest rate range. While the Fed does not dictate what rates banks offer on these accounts, it largely influences them. So if rates are cut soon, rates on these accounts will soon follow. Fortunately, if you open a CD account with a high rate today that rate will be locked in for the full CD term, regardless of any rate cuts to come later in 2024.

So don’t wait. Start exploring your CD options now.