Certificates of deposit (CD) accounts come with various interest rates and terms (or lengths) for savers to explore. While rates have traditionally been higher on long-term accounts, that hasn’t been the case in the rate climate of recent years. In 2023 and 2024, for example, rates have been higher on short-term CDs, sometimes by a significant margin. 

That said, rates on long-term accounts are also high now and, like all CDs, they’ll be locked until the account has matured. This is a major incentive currently, as cuts to the federal funds rate and, thus, rates on CDs, are expected to drop later this year. And while long-term CDs often come with terms of multiple years, there is one type that can still provide some flexibility: 18-month CDs.

These accounts will lock your money in at today’s high rates while weathering rate adjustments to come over the next year and a half. And by depositing $5,000 into one of these accounts now, you can potentially earn hundreds of dollars, depending on the lender selected. Before getting started, however, it helps to know exactly how much interest a $5,000 18-month CD can earn if opened now. That’s what we’ll break down below.

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How much interest would a $5,000 18-month CD earn now?

Interest rates on CDs change often, but, right now, savers can secure a rate between 4.50% and 5.00% for an 18-month account if they shop around. Here’s what that looks like calculated with an opening deposit of $5,000:

• 4.50%: $341.27 for a total of $5,341.27 after 18 months
• 4.75%: $360.45 for a total of $5,360.45 after 18 months
• 5.00%: $379.65 for a total of $5,379.65 after 18 months

The more you deposit into one of these accounts, however, the more you’ll make. Here’s what savers can expect to earn if they double their deposit:

• 4.50%: $682.54 for a total of $10,682.54 after 18 months
• 4.75%: $720.90 for a total of $10,720.90 after 18 months
• 5.00%: $759.30 for a total of $10,759.30 after 18 months

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Why you should open a CD account online

While your local bank branch may offer CD accounts now, the rates they provide are unlikely to be as high as those provided by online lenders. That’s because the former has to pay for the maintenance of physical, brick-and-mortar locations while the latter doesn’t. That added savings typically (but not always) results in higher rates that online banks can then provide to savers, both on CDs and other vehicles like high-yield savings accounts. 

Online banks will also frequently eliminate maintenance fees or penalties if savers meet certain requirements. Still, some requirements will likely remain unchanged regardless of whether you use an online bank or not. So don’t withdraw your CD funds early, for example, because either type of lender will charge you an early withdrawal penalty for doing so.

The bottom line

If you deposit $5,000 into an 18-month CD now, you’ll gain protection against a volatile rate climate while earning hundreds of dollars in interest in the interim. But today’s high CD rates are unlikely to stay this elevated for much longer, underlining the importance of being proactive by opening one now. When you do so, consider an online bank instead of one with physical locations and be sure to only deposit as much as you feel comfortable parting with for the full CD term to avoid getting stuck with an early withdrawal penalty.