Here's How Much You Can Earn by Investing in These 3 High-Yield CDs in 2024

High APYs and the possibility of Fed interest rate cuts have made certificates of deposit (CDs) a hot commodity in 2024. Before you decide to invest in CDs, you might want to see just how much yield you can get.

CDs have a few big advantages as a place to put your savings:

• They give you a guaranteed rate of interest
• Your money is FDIC or NCUA insured just like a typical bank savings account
• You can choose a certain "term" or length of time to commit your money

The exact amount of yield you can earn from a CD depends on the financial institution and the term that you choose. Let's look at three of the best CDs for some typical terms that CD investors might want -- and see how much you can earn with each.

Best 1-year CD: Bread Financial (5.25% APY)

Currently, Bread Financial is offering 5.25% APY on 1-year CDs. This is the highest APY of The Ascent's best 1-year CD rates. The Bread Financial 1-year CD requires a minimum opening deposit of $1,500 and is FDIC insured. If you renew your Bread Financial CD after your 1-year term is up, you can get a slightly higher APY as a loyalty rate.

Here's how much you can earn with a 1-year CD from Bread Financial, based on a few different balance amounts:

The more money you put into a CD, the more your savings can grow. The Bread Financial 1-year CD could be a good fit for many people's short-term savings goals, especially because its APY is higher than all of the best high-yield savings accounts on our list at this time.

Best 2-year CD: Bread Financial (4.65% APY)

Bread Financial also gets the nod for best 2-year CD rate, with 4.65% APY. This is higher than all of the other best 2-year CD rates. Bread Financial offers CDs and other banking products through its state-chartered bank, Comenity Capital Bank, which is FDIC insured (like all the financial institutions on our "best of" lists). Just like its other CDs, Bread Financial requires a $1,500 minimum opening deposit for a 2-year CD.

Here's how much you can earn with a 2-year CD from Bread Financial, based on a few different balances:

A 2-year CD is not the best fit for every financial situation; if you think you'll need your money sooner than two years, you should probably choose a high-yield savings account or shorter term CD instead. But if you're confident that you can leave your money alone for two years without incurring early withdrawal penalties, the 2-year CD from Bread Financial is tough to beat.

Best 3-year CD: Quontic (4.40% APY)

Quontic currently offers 3-year CDs with 4.40% APY. This makes it tied for No. 1 on the list of best 3-year CD rates -- but I chose to feature Quontic here because it only requires a $500 minimum deposit. Quontic is an FDIC-insured digital bank and a Community Development Financial Institution (CDFI).

Here's how much you can earn with a 3-year CD from Quontic, based on a few different balances:

If you get a CD with a longer multi-year term like this, you can start to see the power of compound interest. The longer your money is left alone to earn interest, the more your money can build upon itself. A 3-year CD could be a good fit for some financial goals, like saving for a down payment on a house or planning a dream vacation.

Bottom line

The Ascent does a lot of research to find the best CD rates, but there's no one right answer for what is the best CD. It depends on your investment time horizon and financial goals. Some people might prefer to keep emergency savings in a bank account instead of a CD, even if the APY is lower. No-penalty CDs offer a flexible way to avoid early withdrawal penalties. But if you have longer-term savings goals that are five to 10 years away (or more), like college or retirement, even the best CDs are probably not right for your investment portfolio -- consider buying stocks instead.