How much interest can a 6-month CD earn now?
Summary
A 6-month certificate of deposit (CD) account currently offers an interest rate around 4%, which is much higher than traditional savings accounts. CDs keep this interest rate fixed until the end of the term and are insured by the government up to $250,000, but savers must leave their money untouched until maturity to avoid penalties.Key Facts
- 6-month CDs now offer about a 4.10% fixed interest rate, much higher than typical savings accounts with rates below 0.40%.
- The interest earned depends on the deposit amount; for example, a $10,000 deposit would earn about $203 over 6 months.
- CDs are insured by the FDIC up to $250,000, making them a safe place to save money.
- Withdrawing money from a CD before 6 months usually causes penalties that reduce or erase earned interest.
- 6-month CDs balance good interest earnings with a relatively short commitment period compared to longer CDs.
- High-yield savings accounts offer competitive interest rates and let savers access their money anytime but have variable rates that can change.
- The Federal Reserve is currently keeping interest rates steady, so savings rates are expected to remain stable for now.
- Online banks often offer higher CD rates than traditional banks and can be a good option to explore.
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