How much interest can an 18-month CD account earn now?
Summary
An 18-month certificate of deposit (CD) account offers a fixed interest rate of about 4.15% currently, allowing savers to earn guaranteed interest while protecting their money. However, savers must keep their money in the CD until the end of the term to avoid penalties, and traditional savings accounts have much lower interest rates.Key Facts
- An 18-month CD has a fixed interest rate of approximately 4.15% right now.
- Interest earnings range from about $31 for a $500 deposit to over $3,100 for a $50,000 deposit at maturity.
- CDs are insured by the FDIC up to $250,000 per account, making them safe.
- Early withdrawal from a CD may result in penalties, which can reduce or eliminate interest earned.
- Traditional savings accounts offer much lower interest rates, around 0.38% on average.
- High-yield savings and money market accounts offer interest rates similar to CDs without locking in the money.
- CDs protect money from market ups and downs because their interest rate stays the same for the term.
- An 18-month CD balances earning a good return with not locking funds away for too long.
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