How Much Interest Can a $10,000 CD Earn Now Compared to Last August?
How Much Interest Can a $10,000 CD Earn Now Compared to Last August?
With the Federal Reserve keeping its benchmark interest rate unchanged at a range of 4.25% to 4.50%, savers can still find value in certificates of deposit (CDs), even as rates have declined from last year. While the current rates are lower than those seen in August 2024, CDs remain a strong option for locking in higher returns, especially if you're willing to commit to longer terms.
CDs offer fixed interest rates, unlike high-yield savings accounts, which are subject to fluctuation. This makes it easier to compare the potential earnings from a $10,000 deposit in 2024 versus 2025. Below, we break down the differences based on various CD terms.
| CD Term | 2024 Rate | 2025 Rate | 2024 Interest Earned | 2025 Interest Earned | Difference in Earnings |
|---|---|---|---|---|---|
| 3-Month CD | 5.50% | 4.40% | $134.75 | $108.23 | $26.52 |
| 6-Month CD | 6.00% | 4.40% | $295.63 | $217.63 | $78.00 |
| 9-Month CD | 5.50% | 4.40% | $409.73 | $328.22 | $81.51 |
| 2-Year CD | 5.72% | 4.10% | $1,176.72 | $836.81 | $339.91 |
| 3-Year CD | 5.75% | 4.15% | $1,826.09 | $1,297.38 | $528.71 |
While the interest rates available in 2024 were higher than those in 2025, the difference in earnings is more pronounced for longer-term CDs. For example, a $10,000 deposit into a 3-year CD in 2024 would have earned $528.71 more than it would in 2025. However, even with the lower rates today, CDs are still a viable option for locking in relatively high returns, especially when compared to traditional savings accounts that now average below 1%.
With the possibility of future rate cuts and the uncertainty of variable-rate accounts like high-yield savings and money market accounts, CDs remain a solid choice for those looking to preserve their savings while earning more than what traditional accounts offer. However, the key is to find the best available rate and commit to the longest term you can afford to avoid early withdrawal penalties.
Now is the time to shop around for the highest CD rates available and consider locking in a long-term deposit. Even though the returns are not as high as they were a year ago, the interest earned is still significantly better than what is available in other savings vehicles today.
