How Much $25,000 Could Earn in a CD

How Much You Can Earn With a $25,000 CD

With an average one-year CD rate of 2.5%, according to Curinos data, you'd earn $625 in interest on a $25,000 deposit. Over five years at an average rate of 1.96%, that grows to $2,547.94.

If you shop around, however, you can find yields that are much higher than average. In fact, some of the best CD rates right now are over 4%. At that rate, your money could earn $1,000 or more in just one year.

Here's a look at how your earnings compare based on different rates and terms:

^*Source: Curinos LLC, July 2025

Learn more: What Is APY?

Benefits of a CD vs. Savings Account

CDs can be an attractive option if you want to earn more interest without taking on much risk. Compared to traditional or even high-yield savings accounts, CDs offer some clear advantages.

For starters, CD rates often outpace both standard savings accounts and high-yield savings accounts. That's especially true if you lock in a top rate during a period of rising yields.

Also, the return you receive on a CD is more guaranteed. Unlike savings accounts, where rates can fluctuate, CD rates are fixed until maturity. That means no surprises and no risk of your earnings dropping over time.

That said, CDs aren't liquid. You typically can't touch the funds until the CD term ends without triggering an early withdrawal penalty. So while they offer security, they're best for money you won't need right away.

Learn more: Types of CDs and How They Work

Are CDs Safe?

CDs tend to be one of the safest places to park your money, but only if you don't need access to your funds until the account matures. Here are some CD features that can provide some peace of mind:

• Federal insurance: CDs at banks are protected by the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA) at credit unions up to $250,000 per depositor, per institution and per ownership category. That means your money is safe up to that certain amount even if the bank fails.
• No market volatility: Unlike stocks, bonds and other investment securities, CDs don't rise and fall with the market. Your principal and interest are locked in, so there's no risk of losing value.
• Predictable growth: With a fixed APY, you know exactly how much interest you'll earn. This makes CDs ideal for conservative savers who prioritize stability.

That said, be aware of early withdrawal penalties. In some cases, financial institutions may institute a penalty that eats into your principal balance, which could result in a loss.

Learn more: Do CDs Pay Interest or Dividends?

Top Strategies to Maximize CD Earnings

There are several ways to make the most of your savings with a CD. Here are just a handful of strategies to consider:

• Deposit more. The more you invest, the more you'll earn. If you can afford it, depositing more than $25,000 can amplify your returns. Just be sure to stay under federal insurance limits.
• Compare rates. Not all CDs are created equal. Online banks and credit unions often offer higher yields than big national banks, so it pays to shop around.
• Use a CD ladder. The CD ladder approach involves spreading your savings across multiple CDs with different maturity dates. This gives you more access to your cash and helps you take advantage of both short- and long-term rates.
• Lock in a good rate. If interest rates are expected to fall, securing a higher rate with a long-term CD now can lock in earnings before yields drop.
• Avoid early withdrawals. Only invest money you won't need during the CD term. That way, you'll avoid penalties and maximize your earnings.

Learn more: Strategies for CD Savers

The Bottom Line

A $25,000 CD is a safe, straightforward way to earn guaranteed interest, especially with today's high rates. It's ideal for savers who want predictable returns without the ups and downs of the stock market.

But keep in mind, CDs aren't built for flexibility. Your money is typically locked in for the full term, and early withdrawals can trigger penalties. If you won't need the funds right away, though, a CD can offer peace of mind and solid growth. Just make sure to shop around and choose a term that fits your goals.