How much interest will a $50,000 1-year CD earn if opened this August?
Summary
A $50,000 1-year certificate of deposit (CD) opened in August could earn between about $2,085 and $2,200 in interest, depending on the bank’s rate. These CD returns are higher than what most traditional savings accounts offer right now, which pay around 0.38% interest and would earn only about $190 on the same deposit over a year.Key Facts
- The best 1-year CD rates this August range from 4.17% to 4.40% annual percentage yield (APY).
- A $50,000 deposit in a CD at 4.40% APY earns $2,200 in interest after one year.
- The smallest CD rate on the list, 4.17%, still pays $2,085 in interest on $50,000 over a year.
- Traditional savings accounts pay about 0.38% APY on average, which would earn roughly $190 on $50,000 in the same period.
- The interest earned from CDs is guaranteed as long as no early withdrawal penalties apply.
- Savings accounts offer more liquidity, allowing access to funds without penalties, but usually with lower interest rates.
- CD rates can change if the Federal Reserve adjusts borrowing costs, but locking in a CD now secures the current rate for one year.
- High-yield savings accounts may offer rates closer to CDs but come with variable rates that can change if the Fed adjusts interest rates.
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