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Certificates of Deposit (CDs) can generate a significant return. With the offer of leading financial institutions APYs ranging from around 4% to over 5%, they can be hard to ignore. These accounts usually include federally backed insurance that guarantees your money is safe up to the insurance maximum, which is usually $250,000.
But what if you wanted to get a specific performance? invest in a CD? For example, let's say you wanted to earn $500 from your deposit. The good news is that there are several ways to earn $500 in a CD in today's high interest rate environment. But, make sure you start fast. As inflation cools, CD APYs may start falling soon. Therefore, you will want lock in today's high CD rates as fast as possible.
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5 Easy Ways To Make $500 With A CD Now
Here are five easy ways to make $500 on a CD right now:
Deposit $19,000 into a 6-month CD
You could earn $501.63 by depositing $19,000 to one 6 month CD with an APY of 5.35%. If you did, your total account balance would be $19,501.63 at maturity.
Start earning more from your savings with a CD now.
Deposit $9,400 into a 1-year CD
some top 1 year CD they come with APYs up to 5.36%. If you were to deposit $9,400 into a 1-year CD at that rate, you'd earn $503.84 in interest, bringing your total account value to $9,903.84 at the end of your term.
Deposit $3,500 into a 3-year CD
If you deposit $3,500 to a 3 year CD at a leading financial institution, you could earn 4.61% over the life of your account. At this rate, you would earn $506.71 on your deposit for a total account balance of $4,006.71 at the end of your term.
Deposit $2,050 into a 5-year CD
You could earn $504.67 by depositing $2,050 to one 5 year CD with an APY of 4.50%. This would bring your total account balance to $2,554.67 at account maturity.
Deposit $1,130 into a 10-year CD
Currently, 10-year CDs are available with APYs as low as 3.75%. If you deposit $1,130 to a 10 year CD at 3.75%, you'd earn $502.90, bringing your total balance to $1,632.90 when your account matures.
Also consider a high-yield savings account
“Savings accounts provide more flexibility than a CD,” explains Matt Willer, managing director of capital markets at financial planning firm Phoenix Capital Markets. “While you may have limitations on transaction volume, your money is rarely locked up. So it's a more flexible option than a CD, while allowing for a reasonable return and remaining FDIC insured.”
But, there is a trade-off to consider. while high yield savings accounts they usually give you more access to your money than CDs, theirs returns are variable. Therefore, if rates fall, the returns on these accounts may also fall.
However, you can earn between 4.25% and 5.25% return in some of today's high-yield savings accounts. So how long would it take you to make $500 on a $10,000 deposit at these rates if they stayed the same for as long as you had the account?
- 4.25%: At 4.25%, you'd earn $534.04 in interest on a $10,000 balance after 15 months.
- 5.25%: At 5.25%, you would earn $525.00 in interest on a $10,000 balance after 12 months.
But, keep in mind that the returns above assume that your rate of return stays the same for every 12 or 15 months and there is no guarantee that will happen.
Compare the best paying high yield savings accounts today.
The bottom line
There are several ways to earn $500 on a CD. Some of the easiest ways are to deposit $1,130 into a 10-year CD, deposit $2,050 into a 5-year CD, deposit $3,500 into a 3-year CD, deposit $9,400 into a 1-year CD, or deposit 19,000 dollars in a 6-month CD. CD Also, if you're not interested in locking up your money in a CD, a high-yield savings account could still give you access to a significant return. Compare top high-yield savings accounts here and top CDs here to make more money today.
