How much will a $10,000 CD earn in a year?

At 4.50% APY (a competitive 2026 rate), a $10,000 CD earns $450 in one year. At 5.00% APY, it earns $500. At a typical big bank rate of 0.50%, it earns only $50. The difference between the best and worst CD rates on a $10,000 deposit is over $400 per year.

Are CDs worth it in 2026?

CDs are worth it when rates are competitive (above 4% APY) and you have cash you won't need for a specific period. They guarantee a fixed return with FDIC insurance up to $250,000. However, if rates are expected to rise, shorter-term CDs or high-yield savings may be better to avoid locking in lower rates.

What is a CD ladder and how does it work?

A CD ladder splits your deposit across multiple CDs with staggered maturity dates (e.g., 1-year, 2-year, 3-year, 4-year, 5-year). As each CD matures, you reinvest it at the longest term. This gives you regular access to funds while capturing higher long-term rates. A $50,000 ladder across 5 terms means $10,000 matures every year.

CD Calculator: How Much Will Your Certificate of Deposit Earn? (2026)

Use these tables to calculate CD returns at various rates, terms, and deposit amounts.

CD Returns by Deposit Amount (2026 Rates)

At 4.50% APY (Competitive Online Rate)

Deposit	6 Months	1 Year	2 Years	3 Years	5 Years
$1,000	$22	$45	$92	$141	$246
$5,000	$111	$225	$460	$706	$1,231
$10,000	$223	$450	$920	$1,412	$2,462
$25,000	$556	$1,125	$2,300	$3,529	$6,154
$50,000	$1,113	$2,250	$4,601	$7,058	$12,308
$100,000	$2,225	$4,500	$9,203	$14,117	$24,618

At 5.00% APY

Deposit	6 Months	1 Year	2 Years	3 Years	5 Years
$1,000	$25	$50	$103	$158	$276
$5,000	$124	$250	$513	$789	$1,381
$10,000	$248	$500	$1,025	$1,577	$2,763
$25,000	$620	$1,250	$2,563	$3,941	$6,907
$50,000	$1,240	$2,500	$5,125	$7,881	$13,814
$100,000	$2,480	$5,000	$10,250	$15,763	$27,628

At 0.50% APY (Typical Big Bank Rate)

Deposit	6 Months	1 Year	2 Years	3 Years	5 Years
$10,000	$25	$50	$100	$151	$253
$25,000	$63	$125	$251	$377	$631
$50,000	$125	$250	$501	$754	$1,263
$100,000	$250	$500	$1,003	$1,508	$2,525

The difference matters: $100,000 for 5 years at 5.00% earns $27,628 vs only $2,525 at 0.50%. That’s $25,103 more just for choosing a better bank.

Current Best CD Rates (January 2026)

Term	Best Rate (APY)	Typical Online Rate	Big Bank Rate
3 months	4.75-5.00%	4.25-4.50%	0.15-0.50%
6 months	4.50-4.85%	4.00-4.50%	0.15-0.50%
1 year	4.25-4.65%	4.00-4.25%	0.20-0.50%
18 months	4.15-4.50%	3.75-4.15%	0.25-0.50%
2 years	4.00-4.35%	3.50-4.00%	0.25-0.50%
3 years	3.75-4.15%	3.25-3.75%	0.25-0.50%
5 years	3.50-4.00%	3.25-3.50%	0.25-0.50%

Rates from FDIC-insured banks and credit unions. Updated quarterly.

CD Ladder Strategy

How a 5-Year CD Ladder Works

Split $50,000 across 5 CDs with staggered maturity dates:

CD	Amount	Term	APY	Maturity	Interest Earned
CD 1	$10,000	1 year	4.50%	Year 1 → Reinvest for 5 years	$450
CD 2	$10,000	2 years	4.25%	Year 2 → Reinvest for 5 years	$869
CD 3	$10,000	3 years	4.00%	Year 3 → Reinvest for 5 years	$1,249
CD 4	$10,000	4 years	3.85%	Year 4 → Reinvest for 5 years	$1,637
CD 5	$10,000	5 years	3.75%	Year 5 → Reinvest for 5 years	$2,022

Benefits: After year 1, you have $10,000 maturing every year (liquidity) while earning higher long-term rates.

CD Ladder vs Single CD vs High-Yield Savings

Strategy	$50,000 Over 5 Years	Total Interest	Access to Cash
Single 5-year CD at 3.75%	One lump at maturity	$10,112	None for 5 years
5-year CD ladder (see above)	$10K matures yearly	$9,827	$10K per year
High-yield savings at 4.00%	Anytime withdrawal	$10,833	Anytime
Checking account at 0.01%	Anytime	$25	Anytime

In a declining rate environment, locking in with CDs wins. In a stable/rising rate environment, HYSAs may outpace CDs.

CD vs Other Safe Investments

Investment	Current Yield	FDIC Insured	Liquidity	Tax Treatment
1-Year CD	4.25-4.65%	Yes ($250K)	Locked (early withdrawal penalty)	Federal + state income tax
High-yield savings	4.00-4.50%	Yes ($250K)	Anytime	Federal + state income tax
Money market account	3.75-4.25%	Yes ($250K)	Limited (6 transfers/mo)	Federal + state income tax
1-Year Treasury bill	4.30-4.60%	N/A (gov backed)	Sell on secondary market	Federal only (no state tax)
I Bonds	3.11% (current)	N/A (gov backed)	1-year lockup, then flexible	Federal only (no state tax)
Series EE Bonds	2.60% (fixed)	N/A (gov backed)	1-year lockup	Federal only (no state tax)

Early Withdrawal Penalties

CD Term	Typical Penalty	Amount Lost on $10,000 at 4.50%
3 months	1 month interest	$38
6 months	3 months interest	$113
1 year	6 months interest	$225
2 years	6-9 months interest	$225-$338
3 years	9-12 months interest	$338-$450
5 years	12-18 months interest	$450-$675

Some banks offer no-penalty CDs with slightly lower rates. Worth considering if you might need access.

CD Interest and Taxes

Tax Bracket	Tax on $5,000 CD Interest	After-Tax Return (4.50% CD)
10%	$500	4.05%
12%	$600	3.96%
22%	$1,100	3.51%
24%	$1,200	3.42%
32%	$1,600	3.06%
35%	$1,750	2.93%
37%	$1,850	2.84%

CD interest is taxed as ordinary income. Consider holding CDs in tax-advantaged accounts (IRA CD) to defer or eliminate taxes.

When CDs Make Sense

Scenario	Why CDs Work
Saving for a house (1-3 years out)	Guaranteed return, no market risk
Emergency fund tier 2	3-6 months expenses in accessible savings, remainder in CDs
Rates are high and expected to fall	Lock in today’s high rates before they drop
You need to separate savings from spending	Locked money = can’t impulsively spend it
Near retirement and need safety	Preserve capital with guaranteed yield
FDIC insurance matters	Full government backing up to $250K

When to Skip CDs

Scenario	Better Alternative
Need access to cash anytime	High-yield savings account
Investing for 5+ years	Stock index funds (higher expected returns)
Want state tax savings	Treasury bills (exempt from state tax)
Rates are rising	Shorter-term CDs or HYSA to capture higher rates
Large amounts (over $250K)	Treasuries (no FDIC limit) or spread across banks