How Much Does a $50,000 CD Make in a Year?

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Key Takeaways

How much does a $50,000 CD make in a year?
How much does a $50,000 CD make over different terms?
How much can I earn on a $50,000 deposit with our top CDs?
How do CDs work?
Should I put $50,000 in a CD?
Alternatives to CDs
Our top picks for the best CDs
FAQ: How much does a $50,000 CD make?
Related topics

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By Christy Montour - Personal Finance and Investment + 1 other

Reviewed By Blake Esken - Los Angeles Times

If you invest $50,000 into a one-year CD with an average annual percentage rate (APY) of 1.88%, you will earn $940 in interest over the term.
Some banks offer much higher rates than the industry average APY, so you should compare terms and rates before you invest.
If you invest $50,000 into a one-year CD with a much higher APY of 6.00%, you will earn $3,000 in interest over the term.

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Rates as of 10/15/2024

apy%

6 months

$min_deposit

Why We Like It

The Barclays 6-month CD is a great option if you’re looking for a short-term place to grow your savings without a long commitment. With daily compounding interest, your balance can grow a little faster than CDs that compound monthly or yearly. And since there are no maintenance fees or minimum balance requirements, it’s a flexible and budget-friendly choice for different types of savers.

While Barclays doesn’t have physical branches since it’s an online-only bank, their digital platform is easy to use. If you’re comfortable managing your money online, this CD gives you a good mix of growth, convenience, and quick access to your funds.

Competitive APY
No minimum deposit required
Initial deposit isn’t due until 14 days after account opening
Insured by the FDIC

Must maintain a balance that would earn at least 1 cent if you want the interest to post to your account
Early-withdrawal penalty
No physical branch locations

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rates_last_updated

apy%

6 months

$min_deposit

Why We Like It

The Valley Direct six-month CD is an excellent option if you’re looking to boost your returns in a short time. With a competitive interest rate, it offers an appealing incentive for those willing to lock in their funds for six months. The minimum deposit is $500, which makes it accessible to a wide range of investors.

Keep in mind that you must open the CD with “new money,” meaning your funds should come from an external source. Once you open the CD, no additional deposits can be made until maturity, which could limit your flexibility.

The account comes with a maximum deposit limit of $500,000, making it suitable for significant investments. If you need to access your money early, be aware that there’s a penalty equal to 90 days’ interest on the amount withdrawn.

The lack of customer support on weekends might be inconvenient for some users. Additionally, interest is compounded quarterly, which is less frequent than some other CDs that offer monthly or even weekly compounding.

In summary, the Valley Direct 6-Month CD is a practical option if you’re ready to commit your funds for the full term. It’s well-suited for those focusing on short-term, high-yield investing without the need for immediate access to cash.

Competitive APY
Accessible minimum deposit
No maintenance fees

Must deposit new money
Limited customer support
Quarterly compounding

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FDIC Insured
rates_last_updated

apy%

6 months

$min_deposit

Why We Like It

The Bask Bank six-month CD is a great option if you want a short-term investment with a competitive interest rate. Interest compounds daily, which helps your money grow faster than with many other CDs that compound less often. Plus, you have 10 business days to fund your account after opening, so you don’t need to deposit immediately.

When the CD matures, you have a 10-day period to withdraw your funds, add more money, or switch to another Bask Bank CD. This flexibility is useful if you plan to review your financial situation every six months.

However, the $1,000 minimum deposit means this CD is best for those who can comfortably set aside that amount for six months. If you need to withdraw early, there’s a significant penalty of three months’ worth of interest. So, it’s important to be sure you won’t need access to your funds before the term ends. Additionally, you can’t add more money to the CD once it’s funded, so if you have extra savings later, you’ll need to wait until it matures to make changes.

In short, the Bask Bank six-month CD may be a good fit for you if you’re looking for short-term growth without a long-term commitment, as long as you’re okay with the early withdrawal penalties and funding restrictions.

Competitive APY
Interest compounds daily
No monthly maintenance fees
Insured by the FDIC

$1,000 minimum opening deposit
Early withdrawal penalty equal to 3 months of interest

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Rates rates_last_updated

apy

6 months

min_deposit

Why We Like It

The Quontic six-month CD works well for savers who want competitive rates and are comfortable with online banking. With a $500 minimum opening deposit, it’s accessible to many and offers an easy entry into short-term savings.

You’ll get a competitive APY, and the interest earned is compounded daily. Plus, there’s a 10-day grace period after maturity for penalty-free withdrawals, which gives you some flexibility when the CD ends.

One thing to keep in mind is that if you withdraw your money before the six months are up, you’ll lose all the interest earned—a larger penalty than most other banks charge. Quontic is also a digital-only bank, so there are no physical branches or cash deposit options. However, their mobile app, available on iOS and Android, is user-friendly and packed with helpful tools for managing your account.

Overall, the Quontic six-month CD is a practical fit if you want strong rates and don’t mind handling everything online.

No monthly service fee
Takes less than 3 minutes to open an account
Innovative online tools
Insured by the FDIC
Accessible minimum deposit

High early withdrawal penalty
No physical branch locations
Doesn’t accept cash deposits

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4.00%

14 months

min_deposit

Why We Like It

The Sallie Mae 14-month CD is a solid choice for you if you want good returns on a relatively short investment. Interest is compounded daily, which helps your savings grow more over time.

With a minimum opening deposit of just $1, this CD is accessible for almost anyone. However, if you need to withdraw your money before the term ends, keep in mind that there’s a penalty equal to 180 days of interest, which could reduce your overall earnings.

The CD also automatically renews, so you don’t have to do anything to keep your investment going. Just remember that the interest rate and terms may change upon renewal, so it’s wise to review those details as your maturity date approaches.

In summary, the Sallie Mae 14-month CD is a great option for you if you can commit to the full term and don’t need to access your money early.

Competitive rates
Automatic renewal option
No monthly fees
Insured by the FDIC

No physical brances
Fee for returned deposits

How much does a $50,000 CD make in a year?

As reported by the FDIC, the average annual percentage yield (APY) for a one-year certificate of deposit (CD) is 1.88%. If you invest $50,000 in a one-year CD with this APY, you will earn $940 in interest by the end of the term.

However, you can find financial institutions offering CDs with as much as 6.00% APY. If you invest $50,000 in a 6.00% CD, you’ll earn $3,00 in interest in a year.

You can see in the table below how choosing a CD with a higher APY will result in greater earnings.

Earnings on a $50,000 one-year CD

APY	Interest earned annually on $50,000	Total ending balance
1.85%	$940	$50,940
4.50%	$2,250	$52,250
5.00%	$2,500	$52,500
5.50%	$2,750	$52,750
6.00%	$3,000	$53,000

The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.

How much does a $50,000 CD make over different terms?

A CD’s term is how long you must leave your deposit in the account until it matures. It can range from a few months to several years.

Here are some potential earnings for a $50,000 CD across different terms. These estimates are based on the average industry APYs reported by the FDIC.

Earnings on a $50,000 CD over different terms

CD term	Average APY	Interest earned on $50,000 at maturity	Total ending balance
1 month	0.24%	$9.99	$50,009.99
3 months	1.55%	$192.63	$50,192.63
6 months	1.81%	$450.47	$50,450.47
1 year	1.88%	$940.00	$50,940.00
2 years	1.55%	$1,562.01	$51,562.01
3 years	1.43%	$2,175.82	$52,175.82
4 years	1.35%	$2,755.17	$52,755.17
5 years	1.42%	$3,652.26	$53,652.26

The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.

How much can I earn on a $50,000 deposit with our top CDs?

Some banks offer much higher APYs for CDs than the industry average. You can expect the following earnings with our top picks for the best CDs.

Earnings on a $50,000 deposit with our top picks for the best CDs

Bank	APY	Term	Earnings at maturity	Total ending balance
Barclays	5.00%	6 months	$1,234.75	$51,234.75
Valley Direct	5.00%	6 months	$1,234.75	$51,234.75
Bask Bank	4.70%	6 months	$1,161.51	$51,161.51
Quontic	4.60%	6 months	$1,137.07	$51,137.07
Sallie Mae	4.00%	14 months	$2,341.03	$52,341.03

The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.

How do CDs work?

Certificates of deposit (CDs) are deposit accounts that banks, credit unions and brokerages might offer. These accounts offer a fixed interest rate and relative safety for your investment. In exchange for the interest you’ll earn, you agree to leave your money in the account without making withdrawals until the CD reaches maturity. Several factors can affect how much you’ll earn from a $50,000 CD.

APY

A CD’s annual percentage yield (APY) tells you how much it will earn from interest in a year. It takes into account compounded interest. By contrast, the interest rate you earn simply states the rate at which interest is earned on your deposit and doesn’t take into account the effect of compounding.

CD laddering

CD laddering is an investment strategy in which you divide your initial investment between multiple CDs with staggered maturity dates. For example, you might choose to invest $10,000 each in CDs that mature in three months, six months, nine months, 12 months and 15 months.

A CD ladder allows you to take advantage of the higher interest rates offered by CDs while having access to your money as each CD matures. When a CD matures, you can reinvest the funds in a new CD at the longest term so that the ladder and maturation cycle continue.

Term length

The term of a CD is how long you must agree to keep your funds in the account before you can make withdrawals without penalty. Banks previously offered the best rates for CDs with multi-year terms. However, many banks now offer high rates for short-term CDs, so make sure you compare both terms and rates before investing your money.

Compounding frequency

Banks compound interest at different frequencies. When interest is compounded, you earn interest on the interest that’s been paid and the principal balance. Banks might compound interest in CDs each day, month, quarter or year. When interest is compounded more frequently, you’ll earn more money over the CD’s term.

Penalties

Under federal law, financial institutions must assess a penalty of at least seven days of interest for early withdrawals from CDs. However, the government doesn’t set a maximum penalty amount.

Most financial institutions assess penalties of 60 days of interest for early withdrawals from one-year CDs. The penalties may be higher for CDs with longer terms. Make sure you read the terms of the CD agreement before you deposit your money to understand what you’ll have to pay if you make an early withdrawal.

Should I put $50,000 in a CD?

There are reasons for and against investing $50,000 into a CD. When interest rates are high, CD rates are higher. This means you could earn a fixed interest rate for the CD’s duration and know how much you will earn. CDs are generally safe and secure investments.

However, you could make more money by investing $50,000 elsewhere. For example, stock and bond investments tend to pay much higher returns than CDs. They also carry much more risk. You should think about your ability to tolerate risk, how long until you retire and when you’ll need to access your money before you decide to invest $50,000 in a CD.

Alternatives to CDs

Some alternatives to CDs you might consider for a $50,000 investment include:

Money market account

Banks and credit unions offer money market accounts. These deposit accounts pay higher interest rates than traditional savings accounts and have some features similar to those of checking accounts.

With a money market account, you can complete transactions with a debit card or by writing checks. However, your bank will likely limit the number of transactions you can complete with your MMA each month. An MMA can be a good option if you need access to your money and want to earn more interest than a traditional savings account will pay. However, MMAs offer much lower interest rates than CDs.

High-yield savings account

High-yield savings accounts are offered by online banks and at some in-person banks. These accounts pay much higher interest rates than traditional savings accounts but are typically slightly less than CD rates.

A high-yield savings account generally pays more than an MMA. It is a good choice if you want more liquidity than a CD and higher interest than an MMA or traditional savings account.

Our top picks for the best CDs

FAQ: How much does a $50,000 CD make?

How much does a $50,000 CD make in one year?

How much a $50,000 CD will earn in a year depends on its APY, laddering strategy and whether you make early withdrawals. Assuming you purchase a $50,000 CD at the average rate of 1.88% APY, it will earn $940 in one year. If you instead invest $50,000 in a CD at a rate of 6.00% with annual compounding, you’ll earn $3,000.

How much does a $10,000 CD make in one year?

If you invest $10,000 in a CD with an APY of 1.88%, you’ll earn $188 in one year. If you instead invest your money in a CD with an APY of 6.00%, you’ll earn $600.

How much does a $100,000 CD make in a year?

How much $100,000 in a one-year CD will make depends on the APY of the CD. The average APY for a one-year CD is 1.88%, generating $1,880 in interest.

How does CD interest work?

Interest on a CD is fixed and is paid over the CD’s term. Since the interest rate doesn’t vary, you’ll know what you’ll earn from your CD regardless of what happens in the market. Most financial institutions compound interest in CDs. As your CD earns interest, it is added to the principal and can then earn interest itself when it compounds. Banks might compound interest daily, monthly, quarterly or yearly. Those that compound interest more often yield higher earnings.

What factors impact how much I earn on a CD?

Several factors can affect how much you’ll earn on a CD, including:

APY - How much the CD earns in a year with compounded interest
Term - Some longer-term CDs pay higher rates
Compounding frequency - Frequent compounding means higher earnings
Early withdrawals - Withdrawals before maturity come with substantial penalties
CD laddering - Laddering CDs may boost earnings

Is it worth putting $50,000 in a CD?

Whether a $50,000 CD investment is worthwhile depends on your financial goals. If you have a conservative risk profile, are nearing retirement and will not need to access your money during the CD’s term, it can be a good choice since interest rates are currently high.

However, if you are less risk-averse, are younger, have a long time to invest or might need to access your funds, a $50,000 CD is likely not a good choice. Instead, you might consider building an emergency fund or saving for a down payment in an MMA or high-yield savings account. If you are looking for long-term investments and can tolerate risk, you might consider opening a brokerage investment account and investing in stocks and bonds.

About the Author

Christy Montour Personal Finance and Investment

Christy Montour is a seasoned finance writer with extensive experience in explaining a wide range of investment types, retirement accounts, and insurance products. With a background in taxation from law school, Christy possesses a deep knowledge of tax strategies and the tax code.

Christy has written thousands of blogs for clients on finance and investment topics. She covers a wide range of subjects, from the Offshore Voluntary Disclosure Program to IRS installment plans, offers-in-compromise, tax liens, levies, and criminal tax issues such as tax evasion and fraud. Christy’s expertise allows her to break down complex financial topics into clear, accessible content for her readers.

About the Reviewer

Blake Esken Los Angeles Times

Blake Esken has over 15 years of experience in product management and has been a member of the Los Angeles Times staff for over five years.

As part of his role at the Los Angeles Times Commerce Team, Blake acts as the in-house reviewer and fact checker for LA Times Compare. He supervises all content for compliance and accuracy and puts to use skills he has honed through years of experience managing high-stakes projects for a range of industry-leading companies.

He has a strong background in data analysis, compliance, and communication, which allows him to support LA Times Compare through fact-checking in an effort to provide up-to-date and factual information across our content.