Known for moderate earnings and minimal risk, certificates of deposit (CDs) aren’t exactly exciting — but that doesn’t mean you should overlook them. Though rates started dropping toward the end of 2024, CDs can still offer a good bang for your buck: Some of the highest-yielding CDs are currently earning more than 4% APY. If you’re looking for a deposit account that offers competitive returns and the safety of FDIC insurance, consider opening a CD.
Not convinced? Read on to find out how much you could earn by putting $10,000 in a CD for five years.
If you’re looking at national averages, CD rates probably won’t impress you. The average 60-month (five-year) CD earns an interest rate of 1.34%, according to the FDIC.
Luckily, averages are just averages, and there are many banks and credit unions offering better-than-average CD rates. For example, America First Credit Union tops the list of the best CD rates, with several terms boasting interest rates around or above 4%.
The difference between earning the average interest rate and earning 4% may not sound like a lot, but the numbers tell a different story.
The table below shows how much you’d earn over five years by depositing $10,000 into two different CDs: One earning the average 60-month CD rate of 1.34%, and one earning a more competitive 4%. (For simplicity’s sake, calculations are based on APY.)
As the table shows, you’d earn a total of $2,166.53 in interest over five years with a CD earning 4% APY. With an average CD, you’d only earn $688.20. In other words, choosing the right CD for your $10,000 would net you more than three times the interest compared to an average account.
CD rates and earnings by term
Interest rates also vary by CD term — that is, the number of months or years until the CD matures.
Traditionally, longer CD terms have offered higher rates, but the economic environment can affect this trend. When interest rates are high and expected to drop in the near future, shorter CD terms may offer higher rates. That’s because banks don’t want to be on the hook to pay a high rate for several years if the Federal Reserve cuts rates.
According to the FDIC’s January 2026 report of National Rates and Rate Caps, 12-month CDs currently offer the highest return. Here’s a look at current rates for a variety of different CD terms and the amount of interest they’d earn by the time they mature:
Keep in mind, the longer the CD term, the more time your money has to earn interest (and for that interest to earn interest). So even though the 60-month CD above earns a lower rate compared to the 12-month CD, it still earns more over the course of its term.
Read more: Short- or long-term CD: Which is best for you?
CDs aren’t the only place to earn interest on your cash. If the inflexibility of a CD doesn’t make sense for you, consider these alternatives.
A high-yield savings account (HYSA) also allows you to earn a competitive interest rate on your savings, plus, your money’s there when you need it. Unlike a CD, you can generally withdraw money from your HYSA whenever you need to, though there may be monthly withdrawal limits.
Currently, the best high-yield savings accounts are paying rates comparable to the top CDs, offering APYs of up to 4% APY. But keep in mind that rates can change after you’ve opened an account.
Read more: Fixed rate vs. variable rate: What’s the difference, and why is it important?
Money market accounts (MMAs) work similarly to savings accounts, but they also include certain characteristics of checking accounts. For example, MMAs often earn competitive interest, but they also often come with checks and/or a debit card.
However, one downside — and potential roadblock — is that MMAs sometimes have higher account minimums compared to savings accounts or CDs.
Currently, the best money market accounts are offering APYs of up to 4.1%.
If you’re willing to take slightly more risk for potentially higher returns, you might consider bonds.
Like CDs, some bonds provide fixed payments over a steady period of time.
Technically, a bond is an investment. You, the investor, lend money to the government or a corporation; in exchange, you receive recurring payments at a fixed interest rate until the bond matures.
While bonds aren’t federally insured the way CDs are, they tend to be very low-risk investments. Bonds can also offer slightly more flexibility — you can sell bonds before they mature, and while you’ll miss out on future returns, you may not have to pay penalties.
Note: Interest rates on HYSAs, MMAs, and certain types of bonds can change after you make an initial deposit. Unlike CDs, this makes it impossible to predict long-term earnings.
If you have $10,000 (or any amount of money) you can set aside for a period of time, a CD might be worth considering. Because CDs generally offer a fixed interest rate for the duration of their term, they offer predictable earnings. If you can afford to leave a $10,000 deposit alone for five years, you can open a CD knowing exactly how much you’ll earn.
However, be cautious about putting money in a CD if you may need to withdraw it before the account matures. If you do, you’ll likely have to pay early withdrawal penalties.
If you need an account with more flexibility, a savings or money market account may be a better option. On the other hand, if you’re working with a longer timeframe and are willing to take on more risk, you might consider investing that money in bonds, stocks, mutual funds, or ETFs.
Read more: 3 smart things to do when your savings account hits $10,000
The amount you would earn by putting $10,000 in a CD for five years depends on your interest rate, which varies by financial institution. As of January 2026, the national average rate for a five-year CD is 1.34%. At that rate, you’d have a total of $10,688.20 after five years. However, if you could find a more competitive CD earning 4% APY, you’d end up with $12,166.53.
One-year CD earnings depend on your CD rate. The higher your rate, the more you’ll earn. With the current national average one-year CD earning 1.61% APY, you’d earn $161 in one year. At 4% APY, you’d earn $400.
It depends on your priorities. If you’re earning an average rate, it’s probably not worth putting your money in a CD — you could earn more with the right savings account. However, if you can find a CD earning a more competitive rate, such as 4% APY, it may be worth considering.
Whether it’s a good idea depends on how soon you’ll need that money, whether you’re comfortable with it being inaccessible for a period of time, and whether you can find an alternative — such as an HYSA — that offers comparable rates.
