If You Put $1,000 in a CD 1 Year Ago, Here's How Much It Could Be Worth Today

Certificates of deposit (CDs) are all the rage right now. And for good reason: CD rates haven't been this high in over two decades. For perspective, the last time CD rates hit 5.00% (2007), Rihanna had just released "Umbrella" and Transformers and 300 were some of the year's blockbuster hits.

To be sure, CD rates might not stay this high for very long. In fact, they've been declining slightly since the year began. Ever since the Federal Reserve paused its rate-hiking campaign last July, we've all known the day was coming when CD rates would hit their peak and begin to fall sharply back to the decimals from which they started.

That brings up an interesting question. If you had opened a 12-month CD last July, when rates were just peaking, how much would you have earned at its maturity today? Let's take a look.

You would have earned about $50 in a 1-year CD from last year

Let's assume that last July you opened a Bread Savings CD with a 1-year term. Bread Financial has had some of the best CD rates over the last year. Using the Internet Archive's WayBack Machine, we'll see that Bread Financial's 1-year CD had a 5.35% APY last July. If you saved $1,000 in this CD last year, you would have earned about $54 over 12 months.

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Product	APY	Min. to Earn
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Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

Here's how much other deposits would have earned over the same period:

This is how much you'd earn pre-tax. If we factor in taxes, your net earnings would be slightly less. Like other interest-bearing accounts, CD interest totaling $10 or more is taxable and must be reported on your tax return. The rate from your tax bracket is the same rate used to tax your CD earnings. You might also have to pay state and local taxes on CD earnings.

How much could you earn if you open a 1-year CD today?

Currently, a Bread Savings CD with a 1-year term has a 5.15% APY. Using the same deposit amounts from above, here's how much you would stand to gain if you opened one today:

One important factor to keep in mind is that money invested in CDs must be held within that account until maturity. Otherwise, you might incur an early withdrawal penalty. These penalties equal a certain months' worth of interest. For the Bread Savings CD 12-month term, your penalty would be 180 days simple interest.

To be sure, earning an extra $50 on a $1,000 deposit isn't going to make you rich. But it'll help you keep pace with inflation. It can also force you to save money, as the early withdrawal penalty could deter you from spending it. This gives it an advantage over high-yield savings accounts, as CDs can help you retain your initial deposit (plus interest) one year from now.