Investing in These 3 CDs Could Give You an Extra $129 By 2025

Certificates of deposit (CDs) are paying extremely competitive rates right now, especially on 12-month CDs. But just how much could you actually make if you invested your money in one?

Here are some details about the amount of money a CD could earn you by 2025 if you opened a 1-year CD today.

1. Alliant Credit Union 12-month CD

Alliant Credit Union is offering a 12-month CD with a 5.15% APY as of April 28, 2024. That APY jumps up to 5.20% if you make a deposit of $75,000 or more (although this may be out of reach for many investors).

The good news is the Alliant CD requires only a $1,000 minimum deposit, so many people can invest and get that still-competitive 5.15% yield.

You will need to become a credit union member, though. You can do that if:

• You have a relationship with a partner organization or with someone who is already an Alliant member.
• You live near their Chicago corporate headquarters.
• You become an Alliant Credit Union Foundation member (Alliant will make a one-time $5 contribution to the Foundation on your behalf if you do).

If you sign up for membership and invest the required $1,000 minimum, your 5.15% rate will be locked in and guaranteed for the full 12 months. Earnings will compound monthly and at maturity, so your interest will be added on to your principal at the end of each month and then earn more returns for you the next month.

So, how much would your $1,000 turn into after 12 months invested in this CD at 5.15%? You'd end up earning $51.50 in interest on your $1,000 balance over a year. Not bad for taking on essentially no risks and just letting your money grow.

2. Bread Financial 12-month CD

Bread Financial offers a 12-month CD paying 5.25% APY as of April 28, 2024. There's a $1,500 minimum opening balance to invest, which is a little higher than Alliant.

Interest also compounds daily, which means it is added onto the principal balance at the end of each day, so you earn returns on a higher balance the next day. And there's no membership requirements to invest with Bread Financial.

If you invest the required minimum of $1,500 and are paid the 5.25% APY for the duration of the 12-month CD, you'd end up with $78.75 in interest earned, leaving you almost $80 richer by the time next year rolls around.

3. LendingClub 12-month CD

LendingClub currently offers a 5.15% APY on a 12-month CD, as of April 28, 2024. Interest is compounded monthly. However, you must deposit a minimum of $2,500 to open a CD with LendingClub.

If you make the $2,500 required deposit and leave your funds invested for a year, you'll find yourself walking away with $128.75 in interest paid. This is by far the most of any of the three CDs mentioned here. But that's because when you invest more to start, you maximize your returns since you're earning them on a larger balance.

Now, you can invest more than the minimum in any of these CDs you're interested in, and that would increase the interest earned over the year. But this still gives you a good idea of what CDs can do for you once you start opening them, especially if you opt for high-yield CDs and put a good amount of money into them.

As you can see, you can make a lot of money in CDs with essentially no risk. So there's no reason not to give it a try if you're able to lock up your money for a while and avoid the penalties that apply if you break your CD early.

Check out one of these great 12-month CD offers or find another one on The Ascent's list of the best CD rates so you can start earning interest that leaves you richer.