A report released Friday showing that the economy lost jobs in July only underscored what millions of Americans already know: Where you keep your money now is more important than usual. And investing it in a market known for big swings may not feel particularly strategic or secure currently. Fortunately, there are multiple high-interest-rate savings vehicles to explore instead. High-yield savings, money market and certificate of deposit (CD) accounts are three viable options that will boost your returns while avoiding the market risks investments will inevitably encounter.
A CD account, specifically, could be one of the better options worth consideration now, especially for those savers with large, five-figure sums at play like $75,000. This account comes with a fixed interest rate that will hold through periods of market volatility and, because of that, will produce a predictable and reliable return. And with rates on CDs elevated now, a return on a $75,000 deposit could prove to be substantial. Still, you’ll need to be comfortable locking your funds into the account for the full term to earn that rate, though that should be relatively easy to do with an account that matures in just one year.
To best determine the value an account of this size and length offers, then, it helps to begin with the interest-earning capacity, which is simple to complete thanks to the account’s fixed rate. Below, we’ll crunch the numbers that savers should know before making any transfers.
Start by seeing how much interest you can be earning with a CD account here.
Here’s how much interest a $75,000 1-year CD can earn savers now
CD interest rates will vary by term and bank. It’s the latter type that’s particularly important for savers to account for as online banks often have more competitive rates than banks with in-person branch locations thanks to the savings the online banks keep by not having to operate those branches. So, if you want to earn as much interest as possible, start your CD account search there.
Understanding that dynamic, here’s how much interest a $75,000 1-year CD will earn savers who open an account this August, calculated using three of the top available rates and the assumption that no fees or penalties diminish the returns:
- $75,000 1-year CD at 4.15%: $3,112.50 upon account maturity
- $75,000 1-year CD at 4.25%: $3,187.50 upon account maturity
- $75,000 1-year CD at 4.40%: $3,300.00 upon account maturity
With more than $3,100 in interest earnings here, and $3,300 potentially for those who secure a rate of 4.40%, this account could be the right type at the right moment to open right now. Just be confident in your ability to see the account through to its maturity date to avoid paying an early withdrawal penalty.
If you’re unsure, consider an account with a shorter term, which will allow you to earn a similarly high rate without the headache of having to sacrifice access to your money for a full year.
Explore the top CD rates and terms available to you now.
The bottom line
A $75,000 1-year CD account won’t be the right one for each saver, especially in today’s unpredictable financial landscape. But for those who can easily part with the funds for the next year and for those looking to earn a return worth thousands of dollars, it makes a lot of sense to strongly consider this account with this deposit now. Consider shopping around via an online marketplace, which will allow you to easily compare rates, terms, banks and more with a side-by-side view.