Here's how much interest a $12,000 short-term CD account can earn now
Summary
A $12,000 short-term certificate of deposit (CD) can earn savers between about $117 and $500 in interest over periods ranging from 3 months to 1 year, with interest rates around 4%. CDs offer fixed interest rates and protect the original money, but withdrawing early can result in fees. High-yield savings accounts offer similar but variable interest rates and allow more access to funds.Key Facts
- Inflation is still above the Federal Reserve’s 2% target, keeping interest rates relatively high.
- Traditional savings accounts pay very low interest rates, around 0.38% currently.
- Short-term CDs lock money for up to one year but offer higher fixed interest rates, approximately 4%.
- Example earnings for a $12,000 CD: about $117 in 3 months, $500 in 1 year.
- Early withdrawal from a CD usually triggers a fee, so money should stay until maturity.
- High-yield savings accounts pay about 4.10% interest but allow deposits and withdrawals anytime.
- Unlike CDs, savings account rates can change over time depending on the market.
- It’s important to compare offers from different banks to get the best rate and lowest fees.
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