A Simple Guide to Making Money With CDs

If you want a safe way to grow your savings, certificates of deposit (CDs) might be a great choice.

CDs currently offer about the same annual percentage yields (APYs) as high-yield savings accounts. The difference is that CDs have fixed rates until they mature. That means you can lock in today's APY for up to five years.

Here's a simple guide to help you make the most of CDs.

Find the best CD rates

Most importantly, you want to find the highest APY you can get. The higher the APY, the more you'll earn.

Our Picks for the Best High-Yield Savings Accounts of 2025

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.70% Rate info 3.70% annual percentage yield as of April 11, 2025. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.70% Rate info 3.70% annual percentage yield as of April 11, 2025. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
CIT Platinum Savings Member FDIC. APY 4.10% APY for balances of $5,000 or more Rate info 4.10% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000+ for max APY Open Account for CIT Platinum Savings On CIT's Secure Website. Member FDIC.	4.10% APY for balances of $5,000 or more Rate info 4.10% APY for balances of $5,000 or more; otherwise, 0.25% APY	$100 to open account, $5,000+ for max APY	Open Account for CIT Platinum Savings On CIT's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.60% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 8, 2025. 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.	3.60% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 8, 2025. 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.

Here's how to find the best rates:

• Compare online banks and credit unions. They often offer higher APYs than traditional banks.
• Look for promotional rates. Some banks offer limited-time CD terms. For example, you may find a 14-month CD that pays a much higher rate than most 1-year CDs.
• Check different term lengths. Historically, longer-term CDs have offered higher rates. That's not the case right now. At the moment, the highest rates are offered by CDs with terms between 6 months and 18 months.

Build a CD ladder

A CD ladder is a strategy that helps you earn high interest while having regular access to your money. Instead of putting all your cash into one long-term CD, you divide it into multiple CDs with different maturity dates.

Here's an example of a basic CD ladder with $10,000:

• $2,000 in a 1-year CD at 4.30% APY
• $2,000 in a 2-year CD at 4.00% APY
• $2,000 in a 3-year CD at 4.00% APY
• $2,000 in a 4-year CD at 4.00% APY
• $2,000 in a 5-year CD at 4.15% APY

Each year, when a CD matures, you reinvest it in a new 5-year CD at the best available rate. Over time, all your CDs will earn high long-term rates, and you'll have the option to cash out part of your investment every year.

Want to earn a guaranteed APY of up to 4.50%? Click here to see some of today's best CD rates and open an account today.

How much can you earn with a CD ladder?

Let's say you set up the $10,000 CD ladder above. If you reinvest your money and rates stay the same, here's how much interest you'd earn after five years:

• Year 1: $2,000 CD earns $86
• Year 2: $2,000 CD earns $163
• Year 3: $2,000 CD earns $249
• Year 4: $2,000 CD earns $336
• Year 5: $2,000 CD earns $450

Total earnings: Around $1,284 in interest over five years, with more growth to come if it's reinvested.

What to do when your CD matures

When your CD reaches its maturity date, you have a few choices:

• Reinvest in a new CD at the same bank to keep earning interest.
• Withdraw your money if you need it.
• Look for a better rate by shopping around for CDs with different terms or at a different bank.

Be sure to act quickly when a CD matures. Some banks automatically reinvest your money in new CDs. That's fine if you like the new CD terms, but you could get stuck with a lower rate.

You could earn an APY of up to 4.50% -- without locking up your money. Check out our list of the best high-yield savings accounts to find your new bank today.

Is a CD right for you?

CDs are best if you:

• Want a guaranteed return without risk.
• Don't need immediate access to your money.
• Prefer a safe, predictable way to grow savings.

If you need flexibility, a high-yield savings account or money market account may be better. These have variable APYs, so your rate could change at any time. But you can also deposit or withdraw money whenever you want.

And when it comes to retirement savings, most of us need higher growth than CDs offer. For that, you're probably better off investing in index funds or stocks through an IRA or a regular brokerage account.

Before opening a CD, compare rates and terms to get the best deal. With the right approach, you can make the most of your savings with minimal effort.