How Much Interest Will $10,000 Earn in a CD?
At 4.00% APY, $10,000 earns $400 in a 1-year CD and about $2,167 over 5 years. The rate you pick matters more than almost anything else: at the 1.73% national average for 12-month CDs, the same $10,000 earns just $173 in a year. This guide shows the interest for every common term and rate, what taxes take and when a CD makes sense.
The quick math
When a CD rate is shown as APY, the interest already includes compounding, so the math is simple:
For terms shorter than a year, use the fraction of a year as the exponent. A 6-month CD at 4.00% APY grows to $10,000 × 1.040.5 = $10,198.04, earning $198.04.
Interest on $10,000 by term and rate
Here is what $10,000 earns by maturity for common CD terms and rates:
| Term | 1.73% APY | 3.00% APY | 4.00% APY | 4.40% APY |
|---|---|---|---|---|
| 3 months | $42.97 | $74.17 | $98.53 | $108.23 |
| 6 months | $86.13 | $148.89 | $198.04 | $217.63 |
| 1 year | $173.00 | $300.00 | $400.00 | $440.00 |
| 2 years | $348.99 | $609.00 | $816.00 | $899.36 |
| 3 years | $528.03 | $927.27 | $1,248.64 | $1,378.93 |
| 5 years | $895.45 | $1,592.74 | $2,166.53 | $2,402.31 |
In practice, banks pay different rates for different terms, and longer CDs do not always pay more. Compare the APY for the exact term you want. The 4.40% column reflects the best 1-year CD rates listed by NerdWallet on September 28, 2026.
Shopping for a rate is worth more than you think
On $10,000 for one year, the gap between the national average and a top rate is $267. The difference grows with the deposit:
| Deposit | 1 year at 1.73% | 1 year at 4.00% | Extra from a better rate |
|---|---|---|---|
| $5,000 | $86.50 | $200.00 | $113.50 |
| $10,000 | $173.00 | $400.00 | $227.00 |
| $25,000 | $432.50 | $1,000.00 | $567.50 |
| $50,000 | $865.00 | $2,000.00 | $1,135.00 |
Online banks and credit unions often pay far more than large branch banks. Make sure the bank is FDIC-insured or the credit union NCUA-insured, which protects deposits up to $250,000 per depositor, per institution, for each ownership category.
Taxes and early withdrawal penalties
Two things can shrink what you actually keep:
- Taxes. CD interest is generally taxed as ordinary income each year it is credited, even before maturity. At a 22% tax rate, $400 of interest becomes about $312 after tax. Your bank reports interest on Form 1099-INT.
- Early withdrawal penalties. Taking money out before the CD matures usually costs a set amount of interest. As an example, a 90-day interest penalty on $10,000 at 4.00% APY would be about $97, roughly a quarter of a year’s interest. Longer CDs often carry bigger penalties.
Because of the penalty, only put money in a CD that you will not need before it matures. Keep your emergency fund in a savings account you can reach any day.
CD or high-yield savings for $10,000?
| CD | High-yield savings | |
|---|---|---|
| Rate | Fixed for the whole term | Can change at any time |
| Access to money | Penalty if withdrawn early | Withdraw anytime |
| Adding money | Usually not allowed | Add anytime |
| Best for | Money you will not need for the term, when you want to lock in a rate | Emergency funds and goals with flexible timing |
If you want both flexibility and a locked rate, a CD ladder can help: split $10,000 into five $2,000 CDs that mature in 1, 2, 3, 4 and 5 years. One CD comes due every year, so part of your money is always close to available. For goals where you keep adding money, our savings goal calculator is a better fit.
Frequently asked questions
How much interest will $10,000 earn in a 1-year CD?
At 4.00% APY, $10,000 earns $400 in a 1-year CD. At the best rates of about 4.40% APY in late September 2026, it earns $440. At the 1.73% national average for 12-month CDs, it earns only $173.
How much will $10,000 earn in a 5-year CD?
At 4.00% APY, a $10,000 5-year CD grows to about $12,166.53, earning $2,166.53 in interest. At 3.00% APY it earns about $1,592.74.
Is a CD better than a high-yield savings account for $10,000?
A CD locks in a rate for a set term, so your earnings are predictable even if rates fall. A high-yield savings account lets you withdraw anytime, but its rate can change. If you might need the money soon, savings is usually more flexible. If you will not touch it for the full term, a CD can protect your rate.
Do I pay taxes on CD interest?
Yes. CD interest is generally taxed as ordinary income in the year it is credited, even before the CD matures. With a 22% tax rate, $400 of interest leaves about $312 after tax. CDs held in an IRA follow the IRA's tax rules.
What happens if I cash out a $10,000 CD early?
Most banks charge an early withdrawal penalty, often a set number of days or months of interest. For example, a 90-day interest penalty on a $10,000 CD at 4.00% APY would cost about $97. Check the penalty in the account terms before opening the CD.
Run your own numbers
Enter any deposit, rate and term to see your balance at maturity, interest earned, interest after taxes and the maturity date.
Open the CD CalculatorSources and how we calculated
Interest figures use the stated APY compounded over the term, rounded to the cent, before taxes. The national average rate for 12-month CDs is the FDIC national rate, as published on FRED for September 2026. The top 1-year CD rate comes from NerdWallet on September 28, 2026. Deposit insurance limits are from the FDIC’s deposit insurance page. Rates change often, so check current offers before opening a CD.
This guide is for educational purposes only and is not financial or tax advice. CD rates, compounding methods and early withdrawal penalties vary by bank. We do not recommend or receive payment from any bank.