Certificate of Deposit (CD) Earnings: Unpacking $5,000 Over 2 Years
Understanding Your CD Options
Certificate of deposit (CD) accounts are very much a wise choice for savers eager to protect and grow their savings. In recent years, rising interest rates have allowed for returns on CDs to reach 4% to 5%. However, the climate is shifting, and potential rate cuts might affect future earnings.
Interest Earnings on a $5,000 CD
Currently, savers can secure rates for 2-year CDs at 4.50%, 4.65%, or even 4.75%. Here’s what that looks like for a $5,000 CD:
- 2-year CD at 4.50%: Earns $460.12 for a total of $5,460.12 after two years.
- 2-year CD at 4.65%: Earns $475.81 for a total of $5,475.81 after two years.
- 2-year CD at 4.75%: Earns $486.28 for a total of $5,486.28 after two years.
Doubling Your Deposit
If you decide to increase your investment to $10,000, your earnings will also double:
- 2-year CD at 4.50%: Earns $920.25 for a total of $10,920.25 after two years.
- 2-year CD at 4.65%: Earns $951.62 for a total of $10,951.62 after two years.
- 2-year CD at 4.75%: Earns $972.56 for a total of $10,972.56 after two years.
Investing today can yield higher interest rates before anticipated cuts. However, always consider tax implications, especially with varying levels of withdrawal risks.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.