How much will a $5,000 CD make in a year? (2024)

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• Depending on the bank, a $5,000 CD deposit will make around $25 to $275 in interest after one year.
• Online banks and credit unions pay appealing CD rates, and you can earn more interest than at big brick-and-mortar banks.
• When choosing a CD, consider other factors beyond the interest rate of an account.

If you want to open a 1-year CD with a $5,000 deposit, be mindful of your options. Your bank selection will have a big impact on how much your money can grow.

Below, we've calculated how much a $5,000 CD will make in a year. We also explain how to choose the right bank to open a CD.

How much interest would you make on a $5,000 CD?

We estimate that a $5,000 CD deposit can make roughly $25 to $275 in interest after one year. In comparison, a $10,000 CD deposit makes around $50 to $550 in interest after a year, depending on the bank.

Online banks and credit unions offer the best CD rates right now, with many accounts paying above 5% APY (Annual Percentage Yield). The APY tells you how much interest you'll earn on an account after a year. It also factors in compound interest.

The table below shows how the APY can impact the total amount earned in a CD after a year. As you can see, brick-and-mortar financial institutions usually offer less competitive CD rates on 1-year terms.

*For average CD rates, we looked at FDIC data.

**For brick-and-mortar CDs, we calculated the average standard 1-year CD rate between Chase, Wells Fargo, and Bank of America. Since rates vary by location, we used the zipcode 10001 of New York, New York, for all three banks.

How to choose a bank to buy a CD

While the interest rate of a CD can help differentiate many financial institutions, it shouldn't be the sole reason for opening an account.

Here are a few things to consider when deciding where to open a CD.

Variety of bank products and services

One way to dwindle down your banking options is to think about whether you want access to other bank accounts or services.

Some financial institutions offer other types of bank accounts, like checking accounts, high-yield savings accounts, and money market accounts. You might be able to open credit cards or loans, too. Even if you're only looking for a CD now, it may be beneficial to choose a bank or credit union with a variety of products and services so you have access to more options in the future.

Customer support availability

Some financial institutions have limited customer support availability. For example, TotalBankDirect has a high 1-year CD rate, but you can only contact a customer service representative by phone from 8:30 a.m. to 5 p.m. ET on weekdays.

If you find it challenging to contact a bank with limited customer support hours, you could bank with a credit union or bank that has 24/7 customer support.

Federal insurance

Some of the most competitive CD rates right now are available at less well-known financial institutions.

If you come across a bank you haven't heard of before, check to see if the financial institution is FDIC or NCUA-insured first. These federal agencies can protect your money if a financial institution shuts down. Up to $250,000 per depositor, per account ownership category is protected at federally insured financial institutions.

Mobile app access

Not all banks offer a mobile app. For example, BMO Alto pays a high CD rate, but it doesn't have an app.

If you often use a mobile app to review your account, you might prefer a bank with one of the best mobile banking apps.

Other CD features

CDs do not have monthly bank maintenance fees like checking and savings accounts, but they do charge a penalty for taking out money before the term ends.

In addition to early withdrawal penalties, you can also review the account's eligibility requirements. For example, if you open a CD at a credit union, you have to become a member first. Most credit unions also require you to open a savings account to establish membership. If you aren't eligible or don't want to join a credit union, a bank could be a better choice because there won't be any membership criteria.

In all, a $5,000 CD deposit can be a big decision. It's helpful to compare as many banking features as possible so you can find the account that best aligns with your preferences.