How much interest will a $20,000 1-year CD earn if opened this August?
Transferring $20,000 into a 1-year CD account makes sense this August. Here's how much interest you'd earn if you do.
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If you have $20,000 sitting in an accessible savings account right now, locking it into a certificate of deposit (CD) account may not seem to be the best decision. With inflation still sticky, interest rates poised to rise as soon as next month and stock market performance uneven, maintaining flexibility is critical for many savers now. That's especially true when it comes to a large, five-figure amount such as $20,000. An early withdrawal penalty on a CD of this size could be costly.
But what if you deposited it into a 1-year account, which will mature next August? Rates on accounts of this length are some of the most competitive available now. At the same time, the term won't be so long as to prevent a savings strategy shift as soon as next summer. In the interim, you'll protect your principal and earn a competitive rate that will grow your money even further, all while allowing you to shift your focus to other, more pressing economic concerns now.
Before getting started, it helps to understand the interest-earning capacity that a $20,000 1-year CD account offers savers now. Thanks to the account's fixed rate , that will be easy to determine. Below, we'll do the math.
See how much interest you can be earning with a top CD account here .