Known for their moderate returns and minimal risk, certificates of deposit (CDs) aren’t exactly exciting, but that doesn’t mean you should overlook them. Although rates began to decline in late 2024, CDs can still offer a good bang for your buck: Some of the highest-yielding CDs currently earn more than 4% APY. If you’re looking for a deposit account that offers competitive returns and the security of FDIC insurance, consider opening a CD.
Not convinced? Read on to find out how much you could earn by depositing $10,000 in a CD over five years.
If you look 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.
Fortunately, averages are just averages and there are many banks and credit unions that offer better than average CD rates. For example, America First Credit Union tops the list of best CD rates, with several terms with interest rates near or above 4%.
The difference between earning the average interest rate and earning 4% may not seem like much, but the numbers tell a different story.
The table below shows how much you would earn over five years by depositing $10,000 in two different CDs: one with an average 60-month CD rate of 1.34% and the other with a more competitive rate of 4%. (For simplicity, calculations are based on APY.)
As the table shows, you would earn a total of $2,166.53 in interest over five years with a CD earning 4% APY. With an average CD, you would only earn $688.20. In other words, choosing the right CD for your $10,000 would earn you more than three times the interest compared to the average account.
CD Rates and Earnings by Term
Interest rates also vary depending on the term of the CD, 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 fall in the near future, shorter CD terms may offer higher rates. This is because banks don’t want to be forced to pay a high rate for several years if the Federal Reserve cuts rates.
According to the FDIC’s January 2026 report on National Rates and Rate Limits, 12-month CDs currently offer the highest yield. Below are current rates for a variety of different CD terms and the amount of interest they would earn when they mature:
Keep in mind that the longer the term of the CD, the more time your money will have to earn interest (and for that interest to earn interest). So while the 60-month CD above earns a lower rate compared to the 12-month CD, you still earn more over the course of your term.
Read more: Short-term or long-term CD: which is better 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 will be there when you need it. Unlike a CD, you can generally withdraw money from your HYSA whenever you need it, although there may be monthly withdrawal limits.
Currently, the best high-yield savings accounts pay rates comparable to top CDs and offer APYs of up to 4% APY. But keep in mind that rates may change after you’ve opened an account.
Read more: Fixed Rate vs. Variable Rate: What’s the Difference and Why Does It Matter?
Money market accounts (MMAs) function similarly to savings accounts, but also include certain features of checking accounts. For example, MMAs typically earn competitive interest, but they also typically come with checks and/or a debit card.
However, one drawback (and potential pitfall) is that MMAs sometimes have higher account minimums compared to savings accounts or CDs.
Currently, the best money market accounts offer APYs of up to 4.1%.
If you’re willing to take on a little more risk for potentially higher returns, you might consider bonds.
Like CDs, some bonds offer fixed payments over a constant 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 are not federally insured like CDs are, they tend to be very low-risk investments. Bonds can also offer a little more flexibility: You can sell bonds before they mature, and while you will lose future returns, you may not have to pay penalties.
Note: Interest rates on HYSAs, MMAs, and certain types of bonds may 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) that you can set aside for a period of time, it might be worth considering a CD. Because CDs generally offer a fixed interest rate over their term, they offer predictable earnings. If you can afford to leave a $10,000 deposit for five years, you can open a CD knowing exactly how much you’ll earn.
However, be careful about putting money in a CD if you may need to withdraw it before the account matures. If you do, you will probably 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 on a longer time horizon 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 You Can Do When Your Savings Account Hits $10,000
The amount you would earn by depositing $10,000 in a CD over 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 would have a total of $10,688.20 after five years. However, if you could find a more competitive CD that earns 4% APY, you would end up with $12,166.53.
A year’s CD earnings depend on your CD rate. The higher your rate, the more you will earn. With the current national average one-year CD earning 1.61% APY, you would earn $161 in one year. With 4% APY, you would earn $400.
It depends on your priorities. If you earn 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 that gets 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 not being available for a period of time, and whether you can find an alternative, such as a HYSA, that offers comparable rates.