These days, interest rates are rather high. With those high rates, deposit accounts have the potential to yield substantial returns. Among these, a certificate of deposit (CD) is a common choice.
When you purchase a CD, you agree to keep your money in the account for the duration of the contract. The financial organization agrees to pay you a meaningful interest rate in return, usually higher than what savings accounts offer.
However, what if you wanted to buy a CD and earn $2,500? How would you approach this? There are numerous options available, each with a different deposit and set of terms.
How to make $2,500 with a CD right now
If your goal with the CD is to make $2,500, you could be better off using an online bank. The best CDs available now have rates between 4% and more over 5%. Thus, the first thing you should do is examine your options and select a CD with a high yield if you want to earn $2,500 on it.
Invest $10,200 into a 5-year CD
First Internet Bank of Indiana is offering one of the best 5-year CDs available right now. The APY on this account is 4.50%. Additionally, if you invest $10,200 into it, you will receive $2,500 in interest. In fact, over the course of the five years, you will earn $2,511.06 in interest if you do this. When the account matures, you would have a total account value of $12,711.06.
More top-rated 5-year CDs are available from Quontic Bank and SchoolsFirst Federal Credit Union. 4.35% and 4.30% APYs are paid on their accounts, respectively. At such rates, you could make the following five years with $10,200:
- SchoolsFirst Federal Credit Union: You'll earn $2,420.09 in interest for a total balance of $12,620.09 after five years.
- Quontic Bank: You'll earn $2,398.88 in interest for a total balance of $12,589.88 after five years.
Invest $17,500 into a 3-year CD
At First Internet Bank of Indiana, a 3-year CD rate of 4.61% is right now available. Additionally, if you deposited $17,500 into the account, you could make $2,500 at that rate. By doing this, you would accrue $2,533.54 in interest over the course of three years, meaning that when the account matures, the entire balance would be $20,033.54.
Other attractive choices are the 3-year CDs from Popular Direct and Quontic Bank, which pay 4.50% and 4.40%, respectively. What you could get if you deposited $17,500 into these accounts is as follows:
- Popular Direct: After three years, you would receive $2,470.41 in interest, making your total balance at account maturity $19,970.41.
- Quontic Bank: Upon the account's maturity, you would get a total balance of $19,913.13 plus $2,413.13 in interest after three years.
Invest $47,000 into a 1-year CD
If you deposit $47,000 with CIBC Bank USA, you may potentially earn $2,500 on a CD in a single year. Right now, their 1-year CD offers an APY of 5.36%. At that rate, the deposit you made would yield $2,519.20 in interest over a year, making the entire amount due at maturity $49,519.20.
First Internet Bank of Indiana and Bask Bank are two other banks with competitive one-year CD offers. Right now, the APYs on those accounts are 5.30% and 5.26%, respectively. If you deposit $47,000 into each of these accounts, you might earn the following:
- Bask Bank: After a year, you would get $2,491.00 in interest, making your account's total balance at maturity $49,491.00.
- First Internet Bank of Indiana: At the account's maturity, you would have a total balance of $49,472.20 and would have earned $2,472.20 in interest after a year.
Invest $95,000 into a 6-month CD
If you deposit $95,000 at 5.35% with Bask Bank, you may receive $2,500 on a 6-month CD. At that rate, you would get $2,508.14 in interest on a balance of $97,508.14 at maturity.
Right now, America First Credit Union is also offering a competitive rate. At 5.25%, if you put $95,000 into an America First Credit Union 6-month CD, you would earn $2,461.85, making your total account amount at maturity $97,461.85.
The bottom line
In today's high interest rate climate, there are several ways to earn $2,500 on a CD. $10,200, $17,500, $47,000, or $95,000 might be deposited into a 5-year CD, $17,500 into a 3-year CD, or $95,000 into a 6-month CD. However, there are currently other ways to make hundreds or even thousands of dollars selling CDs. Now is the time to start doing the math and lock in a high CD rate.
Source: CBS News
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