Looking for a low-risk way to make your money work for you? A certificate of deposit could be just the tool you need. Putting your money in a CD allows you to get a guaranteed return in exchange for keeping your cash in the account for a set period, or term.
CD rates are starting to go down after months of sitting above a 5% annual percentage yield, or APY. But there are still plenty of accounts with rates at -- or above -- that level. If you have some extra cash in your savings that you won’t need to access for a while, putting it into a CD now can help you maximize your earnings.Â
For example, if you have $1,000, you may want to put it in First Internet Bank of Indiana's one-year CD, which currently has one of the highest CD APYs of all the banks we track.Â
Here’s how much you could earn by depositing $1,000 into First Internet Bank of Indiana's 1-year CDÂ
If you deposit $1,000 right now into First Internet Bank of Indiana's one-year CD at 5.15% APY, you’ll have earned $51.50 in interest when your CD matures.Â
Other deposit amounts
If you can set aside more than $1,000, you'll earn even more. Here are some examples of how much interest you can earn if you deposit larger amounts into this CD. (Note: First Internet Bank of Indiana's minimum deposit requirement for CDs is $1,000.)
| CD term | Amount deposited | APY | Interest earned | Balance at maturity |
| 1 year | $1,000 | 5.15% | $51.50 | $1,051.50 |
| 1 year | $2,000 | 5.15% | $103.00 | $2,103.00 |
| 1 year | $5,000 | 5.15% | $257.50 | $5,257.50 |
| 1 year | $10,000 | 5.15% | $515.00 | $10,515.00 |
APYs as of August 21, 2024. Earnings are based on APYs and assume interest is compounded annually.
Other CD terms
First Internet Bank of Indiana offers CDs with other term lengths, including six months, 18 months, 36 months and 60 months. Here's what your earnings would look like with these terms:
| CD term | Amount deposited | APY | Interest earned | Balance at maturity |
| 6 months | $1,000 | 5.03% | $24.84 | $1,024.84 |
| 18 months | $1,000 | 4.83% | $73.72 | $1,073.72 |
| 36 months | $1,000 | 4.45% | $139.53 | $1,139.53 |
| 60 months | $1,000 | 4.35% | $237.26 | $1,237.26 |
APYs as of August 21, 2024. Earnings are based on APYs and assume interest is compounded annually
Other high-interest CDs to consider
CD rates are favorable right now, but they're likely to drop in the coming weeks and months. By locking in one of today's top rates now, you can protect your earnings from these drops and maximize your earning potential.
Here are a few other CDs you might want to consider, and how your earnings would look after a year if you deposit $1,000:
| Term | APY | Bank | Interest Earned | Balance at maturity |
| 1 year | 5.05% | America First Credit Union | $50.50 | $1,050.50 |
| 1 year | 5.00% | CommunityWide Federal Credit Union | $50.00 | $1,050.00 |
| 1 year | 4.80% | Marcus by Goldman Sachs | $48.00 | $1,048.00 |
| 1 year | 4.75% | BMO Alto | $47.50 | $1,047.50 |
APYs as of August 21, 2024. Earnings are based on APYs and assume interest is compounded annually.
How to choose the right CD for you
Getting a good interest rate is important, but it’s not the only thing to consider when comparing CDs. Think about these factors, too.
- Early withdrawal penalty: CDs work best if you leave your money alone throughout the term. If you need to withdraw cash before the term ends, you may pay an early withdrawal penalty. This can cost as much as a few weeks to a few months of interest, so look for a CD term that fits your savings timeline. Or consider a no-penalty CD, which may not have as high an APY but won't charge you if you need your funds before the CD matures.
- Other fees: On top of early withdrawal penalties, there could be other fees associated with the account. Pay attention to the fine print to see if there are any extra costs, such as a monthly maintenance fee, that come with the CD.Â
- Federal deposit insurance: Getting a CD at a bank backed by the Federal Deposit Insurance Corporation (FDIC) means your money is insured for up to $250,000 if anything happens to the bank. The same is true for credit unions insured by the National Credit Union Association (NCUA). Opening a CD at an FDIC- or NCUA-insured institution means your money will be more secure.Â
- Minimum deposit requirement: Some banks may require you to deposit a certain amount to open a CD. This could be anywhere from $500 to multiple thousands of dollars. Limit your search to accounts with requirements you can reach.
Are CDs still worth the hype?
CD rates have been going up steadily since March 2022 as the Federal Reserve regularly raised the benchmark federal funds rate to fight record inflation. When the Fed increases this rate, banks often do the same to stay competitive and boost their cash flow. That means savers can enjoy high rates on consumer products like CDs and savings accounts. At one point, the top CD rates we track at CNET were as high as 5.65% APY for select terms.Â
However, after 11 rate hikes, the Fed paused interest rate increases in July 2023 as inflation started to show signs of cooling, and it’s held them steady ever since. In response, CD rates plateaud and have trended downward since the end of 2023.Â
The Fed indicated that a rate cut could be on the way in September 2024. With a weak July jobs report, some economists have called for an emergency rate cut before the Fed’s scheduled meeting in September, which could bring CD rates down even more.Â
Since your rate is locked in on the day you open a CD, opening a CD now can protect your earnings against future rate drops.
