Here's how much interest a $100,000 18-month CD can earn savers now
Moving any amount of money into a certificate of deposit (CD) account should always be done strategically. And that's especially true when there's a large, six-figure amount of money under consideration. When considering a long-term account, specifically, even more care should be taken, as maintaining an account of this length to maturity will generally be more difficult to complete, especially if you have $100,000 locked away. But these considerations shouldn't necessarily be enough to discount the benefits a $100,000 18-month CD offers savers right now, either.
With inflation still high, borrowing costs expected to rise further in the weeks ahead and credit card balances already impacting your money, protecting a large portion of it for the next year and a half makes a lot of financial sense right now. And with interest rates on 18-month CDs, in particular, higher than what's available with most other terms, this can be a particularly lucrative move to make, too. Still, early withdrawal penalties on account of this length and size will be costly, so you'll need to be informed and strategic before making any transfers. That starts with knowing the interest-earning capacity of a $100,000 18-month CD account if opened right now. Below, we'll outline the returns that savers can expect to see.
See how much interest you can be earning with a CD account here.
Here's how much interest a $100,000 18-month CD can earn savers now
While the top 18-month CD account rates will look similar across banks, they won't be identical. This is why shopping around for CD rates is always critical, whether you're committed to opening an 18-month version or one with a shorter or longer term. Using three of the top interest rates available now, here's how much interest a $100,000 18-month CD can earn savers now, assuming the account is maintained without penalty up until the maturity date:
- $100,000 18-month CD at 4.20%: $6,365.69 upon account maturity
- $100,000 18-month CD at 4.30%: $6,518.85 upon account maturity
- $100,000 18-month CD at 4.35%: $6,595.45 upon account maturity
Savers can expect to see a return worth between $6,366 and $6,595, approximately, with a $100,000 18-month CD that's opened right now. Because CDs utilize fixed interest rates, these returns will be guaranteed, too, in a way that they won't be with high-yield savings or money market account alternatives.
At the same time, investing this much money can potentially produce a double-digit return, so it may be worth evaluating your options there, too, before making a final decision. Just don't leave this much money in a traditional savings account, which has an average 0.38% rate right now, which essentially equates to an interest-earning loss compared to the multiple alternatives you have available now.
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The bottom line
A $100,000 18-month CD account will produce a return worth more than $6,300 for savers who get started this September. But with similar returns available with alternative account types – with none of the restrictions CDs require – it's worth thoroughly exploring your options before making a final decision. For some, the CD could still be their best option while others may prefer a high-yield savings or money market account while another group may find it most advantageous to split their funds among one or more accounts at the same time.