How Much Money Should You Keep in a CD Account?

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Financially planning for your future is important whether the intention is for a rainy day or retirement. Squirreling away any extra money you have now can definitely help with any short-term or long-term financial goals. If you have done your homework and want to look into investing in a certificate of deposit, rather than keeping your funds in a standard checking account, savings account or money market account, then it is time to figure out how much money to keep in your CD and why. 

Key Takeaways: How Much Money You Should Keep in Your CD

  • Minimum balance: Be prepared to meet the CD’s minimum requirement to open the account and be sure you can go without it for the duration of the CD term.
  • Short-term goals: With a CD, you will know exactly how much money you will have once the CD has fully matured. Saving for a down payment on something like a house or car means you would deposit enough money to reach the amount you need. Sometimes the interest earned on the CD can even be enough to reach your goal. 
  • Long-term goals: If you are saving for something like retirement, it may be advisable to keep a smaller chunk of your money in CDs in addition to other investments such as stocks or bonds. Though they are higher risk they also have the potential to earn higher returns over time.

A Certificate of Deposit Typical Minimum Balance

When looking into opening a CD through an online bank, brick-and-mortar bank or credit union there are a few variables to fact-check. The overall goal is to save money, but the bottom line is what CD rates are you being offered and how much interest will you have earned when the CD maturity is reached. 

That being said, how much money you keep in your CD account depends on what period of time you are comfortable going without those funds and what minimum balance your financial institution requires. On average, regular or online banks require a minimum deposit of $500 or $1,000 to open a CD account, but some don’t require minimum deposits at all. Earning more interest means putting in more money, so put the most you can spare without accessing it into your CD account. 

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How Much Do CDs Earn?

Examples of how much your CD will earn can be found below. The amounts are calculated with an initial deposit of $1,000 and an APY of 2.5%. It is important to note that APYs will vary depending on the financial institution.

CD Term LengthInterest EarnedTotal at Maturity
12-month CD$25$1,025.00
3-year CD$76.89$1,076.89
5-year CD$131.41$1,131.41

Final Take

As with anything, you get out of CDs what you put into them. They are a great low-risk investment but do not yield as much as riskier investments might. If you are looking for predictable returns to reach short-term or long-term goals, CDs may be the right type of account and investment for you

Explore More on CD Accounts


Here are the answers to questions commonly asked about CD accounts.
  • What is a good amount of money to put into a CD?
    • Most financial institutions require a minimum balance or opening deposit of $500 or $1,000. Depending on if you are saving for something specific or want to invest safely, CDs are a good option to store your money in as you'll earn a higher interest rate as opposed to a standard savings account.
  • How much will a $10,000 CD earn in a year?
    • How much a $10,000 CD will earn in a year depends on the APY your financial institution is offering. For example, if the APY was 2.5%, after one year you would have $250 in interest earned, giving you a total of $10,250.
  • Is putting your money in a CD worth it?
    • CDs are a good place to keep the money you don't need to access straight away as CDs typically earn more interest than savings accounts. However, pay attention to the term length. You might incur early withdrawal fees for cashing in the CD early.
  • What is the return on a $5,000 CD?
    • The return on a $5,000 CD depends on both the CD term and APY. For example, if you had a 5-year CD at 2.5% APY, you would have $657.04 in earned interest, giving you a total of $5,657.04 when the account reaches maturity.
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