RESOLVING THE LEDGER
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If you have $25,000 currently sitting in a traditional savings account, moving it into a certificate of deposit (CD) instead may feel unconventional. CDs, after all, require savers to lock their money into the account to earn the listed interest rate. That means temporarily sacrificing access to your five-figure sum of money, which many may understandably not want to do in today\u0027s inflationary environment. But with interest rates still elevated, the principal here protected in a way it won\u0027t be if it was invested and the returns substantial on a deposit of this size, it can be a worthwhile and profitable move worth making anyway.If you move it into a 1-year CD account, for example, you\u0027ll also regain access to your money by next summer, allowing you to pivot your savings strategy with a more informed approach at that point. Still, forgoing access to $25,000 shouldn\u0027t be done recklessly (an early withdrawal penalty here will be substantial) and it shouldn\u0027t be done without first clearly understanding the interest-earning potential. Fortunately, that\u0027s simple to determine thanks to the account\u0027s fixed interest rate. So, how much interest can a $25,000 1-year CD actually earn if opened right now? That\u0027s what we\u0027ll examine below.Earn more interest on your money by opening a top CD account here.Here\u0027s how much interest a $25,000 1-year CD will earn if opened nowCD interest rates will vary based on term and the lender, underlining the importance of shopping around to find the most competitive options. Here\u0027s how much interest a $25,000 1-year CD will earn if opened now, calculated against three readily available rates and the assumption that no early withdrawal penalties will diminish the returns:$25,000 1-year CD at 4.10%: $1,025.00 upon account maturity$25,000 1-year CD at 4.15%: $1,037.50 upon account maturity$25,000 1-year CD at 4.17%: $1,042.50 upon account maturitySavers are positioned to earn over $1,000 with an account of this size and term and closer to $1,050, depending on the rate they\u0027re ultimately able to secure. But while these rates and terms give savers an approximate idea of their earnings, they\u0027re still encouraged to diligently research their options as some banks may be offering even higher rates (and may start doing so after this week\u0027s Fed meeting). Take the time, then, to leverage online marketplaces to compare rates, terms, fees and more all in one easy-to-understand location.Shop for the top CD accounts online now.The bottom lineThe interest earnings tied to a $25,000 1-year CD account won\u0027t make you rich or grow your savings exponentially. But it will leave you with significantly more money by next summer while both protecting your principal and allowing you to focus on other, more important financial matters. Just be sure of your ability to keep the money frozen in the account for the full term in order to secure that return. If you\u0027re not able to, high-yield savings and money market accounts may be worth considering as alternatives as they have similarly competitive rates without any of the accessibility restrictions the CD does.
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