Here’s how much investing $2,500 in a CD right now could earn you in 1 year
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Here’s how much investing $2,500 in a CD right now could earn you in 1 year
A significant benefit of one-year CDs is they may earn a higher yield than savings or money market accounts, in exchange for your locking in the funds for 12 months. Due to their relatively short term, one-year CDs are an attractive option for savers who prefer access to their money soon to make a planned purchase or a new investment.
A CD typically earns a fixed annual percentage yield (APY), so you’ll be able to determine exactly how much money will be in the account when the term ends. Here we’ll provide examples in which $2,500 is invested in a one-year CD in accounts that pay the national average rate as well those that earn a highly competitive rate and show you how much money you’d have when the CDs mature in 12 months.
National average 1-year CD rates
The national average one-year CD rate is currently an annual percentage yield (APY) of 1.68 percent. This rate has mostly increased or stayed the same since March 2022.
If you were to open a one-year CD today that earns the national average rate of 1.68 percent, the account balance would be around $2,542 when the CD matures in 12 months’ time. This is shown in the following breakdown:
Type of account: 1-year CD
Opening deposit: $2,500
APY: 1.68%
Total interest after 1 year: around $42
Total value of CD after 1 year: around $2,542
Bankrate’s CD calculator is a quick and easy way to determine how much total interest a CD will earn when you plug in the term, deposit amount and APY.
Competitive 1-year CD rates
Savers who shop around can find one-year CD rates that are significantly higher than the national average. For instance, dozens of banks and credit unions currently offer one-year CDs that pay an APY of 4 percent or higher. The highest APYs available right now are above 5 percent.
An APY of 5 percent, for instance, is more than three times higher than the current national average rate of 1.68 percent for one-year CDs. If you were to open a one-year CD today that earns 5 percent, the ending balance in 12 months-time would be around $2,625. This is shown in the following breakdown:
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