How much does a $5,000 CD make in 6 months? (2024)

FAQs

How much does a $5,000 CD make in 6 months? ›

$5,000 at 4.40%: If you open a 3-year CD at 4.40% with a $5,000 deposit, you can expect to earn $689.47 in interest. That would bring your total account balance to $5,689.47 upon maturity. $5,000 at 4.60%: If you open a 3-year CD at 4.60% with a $5,000 deposit, you can expect to earn $722.23 in interest.

$5,000 at 4.40%: If you open a 3-year CD at 4.40% with a $5,000 deposit, you can expect to earn $689.47 in interest. That would bring your total account balance to $5,689.47 upon maturity. $5,000 at 4.60%: If you open a 3-year CD at 4.60% with a $5,000 deposit, you can expect to earn $722.23 in interest.

The bottom line. Putting $5,000 in a 1-year CD today can be a prudent financial move, especially when interest rates are as high as they currently are. The combination of competitive returns, safety and predictability makes it an attractive option for individuals looking to grow their savings with minimal risk.

The national average APY for a one-year CD is 1.74 percent, based on Bankrate research, which shows this average has increased or remained the same since March 2022. If you deposited $10,000 into a one-year CD that pays this national average rate of 1.74 percent, in one year it would be worth a total of around $10,174.

Banks and credit unions often charge an early withdrawal penalty for taking funds from a CD ahead of its maturity date. This penalty can be a flat fee or a percentage of the interest earned. In some cases, it could even be all the interest earned, negating your efforts to use a CD for savings.

CDs tend to offer higher yields than traditional savings and money market accounts, especially in a low-interest rate environment. A 6-month CD may be a good option if you know that you won't need access to your funds for at least six to nine months.

Is it worth putting money into a CD? For some people, it can be worth putting money into a CD. If a person is seeking a riskless investment with a modest return, CDs are a good bet—you'll earn a higher rate than you would with a checking or savings account, but you'll have to commit your funds for a fixed period.

Key takeaways. Interest earned on CDs is considered taxable income by the IRS, regardless of whether the money is received in cash or reinvested. Interest earned on CDs with terms longer than one year must be reported and taxed every year, even if the CD cannot be cashed in until maturity.

How can I double $5000 dollars? ›

How can I double $5000 dollars? One way to potentially double $5,000 is by investing it in a 401(k) account, especially if your employer matches your contributions. For example, if you invest $5,000 and your employer offers to fully match at 100%, you could start with a total of $10,000 in your account.

The risk of having a CD is very low. Unlike how the stock market or a Roth IRA can lose money, you typically cannot lose money in a CD. There is actually no risk the account owner incurs unless you withdraw money before the account reaches maturity.

An investor with $5,000 to put into the market can spread that capital among various investment types, such as S&P or Nasdaq index funds, thematic ETFs, sector ETFs or even bonds. Many advisors recommend diversifying across investment options as a way of mitigating volatility.

A 12-month, $5,000 CD with a 5.05% APY, for example, puts $252.50 in your pocket after a year -- without you having to make any sort of effort beyond opening the CD in the first place.

The top nationwide rate in each CD term—from 6 months to 5 years—currently ranges from 5.20% to 6.18% APY. With a $10,000 investment in a top-paying CD, you can earn hundreds to thousands of dollars of interest on your money—and much more than if you keep it in a typical savings account.

Unlike traditional or high-yield savings accounts, which have variable APYs, most CDs lock your money into a fixed interest rate the day you open the account. That's why if you suspect that interest rates will soon drop, it can be a good idea to put money in a CD to preserve the high APY you would earn.

Depending on the situation, deposits smaller than $10,000 can also get the attention of the IRS. For example, if you usually have less than $1,000 in a checking account or savings account, and all of a sudden, you make bank deposits worth $5,000, the bank will likely file a suspicious activity report on your deposit.

According to the Federal Deposit Insurance Corporation (FDIC), as of Sept. 18, 2023, the average interest rate for a 1-year CD is 1.76%, more than double the 0.45% average rate reported for savings accounts. The best CD rates, as you'll see below, are considerably higher, with some APRs exceeding 5%.

That all noted, here's how much you can expect to make with a 5% CD interest rate: $500 deposit: $25 for a total of $525 after 12 months. $1,000 deposit: $50 for a total of $1,050 after 12 months. $2,500 deposit: $125 for a total of $2,625 after 12 months.