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While inflation and elevated interest rates have caused borrowing costs to surge in recent years, they’ve also resulted in substantial returns for savers. Whether via a high-yield savings or certificate of deposit (CD) account, savers can earn exponentially more on their money than they could have if they had opened these accounts a few years ago. CDs, specifically, offer savers a clear way to determine exactly how much they’ll make thanks to their locked rate. This ensures that savers will earn the same return on their money for the full CD term, no matter what changes occur during that time in the wider rate climate.
However, savers may be best served by calculating their potential returns in advance to better determine which CD term and rate to lock in. Fortunately, in today’s unique market, there are multiple lenders offering CDs with elevated rates, thus providing a variety of ways for savers to earn $1,000 or more with a CD now. Below, we’ll break down four ways savers should consider now.
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4 ways to earn $1,000 with a CD now
Looking to make five figures with a CD while rates are still high? Then it’s important to deposit a specific amount in a CD with a specific rate and term. Here are four ways to do it:
Deposit $19,000 into a 1-year CD
By depositing $19,000 into a 1-year CD with a rate of 5.36%, you will earn just over $1,000 ($1,018.40 to be specific) once the account has matured. That will bring your total funds to $20,018.40 after the 12 months are up. Just be sure to account for any potential tax implications as CD interest will need to be accounted for over a certain amount once you file your taxes.
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Deposit $10,500 into a 2-year CD
If you’re looking to make a smaller deposit but are willing to leave your funds locked up for a little longer, a 2-year CD could be preferable. With a $10,500 deposit into a 2-year CD with a rate of 4.76%, you’ll make $1,023.39 after 24 months.
Deposit $7,000 into a 3-year CD
A 3-year CD may be a bit longer than preferred but it could be a smart way to earn a reliable return in an environment in which interest rate cuts appear likely. By depositing $7,000 into a 3-year CD with a rate of 4.61% you will earn $1,013.42 upon the account maturity, bringing your total funds to $8,013.42.
Deposit $4,250 into a 5-year CD
If you want a reliable return and don’t want to worry about stock market volatility a $4,250 deposit into a 5-year CD could be an option worth pursuing. By depositing this amount with an account that has a 4.50% rate you’ll make $1,046.27 once the CD has matured.
The bottom line
The above list is not exhaustive. There are a variety of ways to earn hundreds and even thousands of dollars on a CD now. Even a 6-month CD could result in a return of $1,000 right now (although it will require a hefty $38,000 deposit and a 5.35% rate to earn it). But, in today’s economy, there’s likely a CD rate and term that works for you. And by shopping around for an account you can potentially even earn a 6% or 7% rate right now. Just be sure to only deposit funds that you’re comfortable parting with for the full CD term or you’ll get stuck with an early withdrawal penalty for accessing your money prematurely.
