5-Year CD Calculator
Calculate the total return on a 5-year certificate of deposit. Lock in today's rate for maximum earnings. See how compounding grows your deposit over 60 months.
A 5-year CD offers the highest rates available on standard CDs and is designed for money you are certain you will not need for the next five years. This term makes sense for long-range savings goals where you want guaranteed growth without market risk — think a child's college fund due in five years, a known future expense like a home renovation, or the top rung of a CD ladder that maximizes yield across your savings.
Total at Maturity
$12,367.51
Interest Earned
$2,367.51
Stated APY
4.25%
Effective Annual Rate
4.34%
Month-by-Month Growth (First Year)
| Month | Balance | Interest This Month | Total Interest |
|---|---|---|---|
| 1 | $10,035.48 | $35.48 | $35.48 |
| 2 | $10,071.08 | $35.60 | $71.08 |
| 3 | $10,106.81 | $35.73 | $106.81 |
| 4 | $10,142.67 | $35.86 | $142.67 |
| 5 | $10,178.65 | $35.98 | $178.65 |
| 6 | $10,214.76 | $36.11 | $214.76 |
| 7 | $10,251.00 | $36.24 | $251.00 |
| 8 | $10,287.37 | $36.37 | $287.37 |
| 9 | $10,323.87 | $36.50 | $323.87 |
| 10 | $10,360.49 | $36.63 | $360.49 |
| 11 | $10,397.25 | $36.76 | $397.25 |
| 12 | $10,434.13 | $36.89 | $434.13 |
Key Considerations
- At 4.25% APY, a $10,000 deposit grows to approximately $12,336 over five years — earning $2,336 in compound interest with FDIC-insured safety.
- Over five years, the total interest from a CD at 4.25% roughly equals what a 1-year CD at 4.75% earns when reinvested at declining rates — the 5-year term locks in certainty.
- Early withdrawal penalties on 5-year CDs are steep, typically 6–12 months of interest ($212–$425 on $10,000). Only commit money you truly will not need.
- If you are building a CD ladder, the 5-year rung captures the highest rate and produces the largest absolute return. As shorter CDs mature, reinvesting into new 5-year terms keeps the ladder at peak yield.
- Brokered CDs available through investment accounts sometimes offer higher 5-year rates than direct bank CDs, and they can be sold on the secondary market before maturity (at market price).
Quick Numbers
| Typical APY Range | 4.00% to 4.50% |
| Interest on $10,000 | $2,150 to $2,450 |
| Interest on $25,000 | $5,375 to $6,125 |
| Early Withdrawal Penalty | 6 to 12 months of interest |
| FDIC Coverage | $250,000 per depositor, per bank |
| Minimum Deposit | $500 to $1,000 at most banks |
How This Compares
A 5-year CD locks in today's rate for maximum total return, earning roughly $1,850 more on $10,000 than rolling four consecutive 1-year CDs at declining rates. The trade-off is reduced flexibility: if rates rise, you miss out on higher yields until maturity. Compared to Treasury notes or brokered CDs, direct bank 5-year CDs offer FDIC insurance and simplicity but cannot be sold before maturity without penalty.
Frequently Asked Questions
- What is the rate lock risk with a 5-year CD?
- Rate lock risk means you are committed to today's APY even if market rates rise significantly over the next five years. If rates increase by 1% within two years, you forgo roughly $500 in additional annual interest on a $10,000 deposit. Mitigate this by building a CD ladder so only a portion of your savings is locked at any one rate, or keep some funds in shorter terms that mature and reinvest at higher rates.
- How does a 5-year CD fit as the top rung of a CD ladder?
- The 5-year rung captures the highest APY and produces the largest absolute return in a standard ladder. Open equal amounts in 1-, 2-, 3-, 4-, and 5-year CDs simultaneously, then reinvest each maturing CD into a new 5-year term. Over time, your entire ladder rotates into 5-year rates while one-fifth of your money becomes accessible every year.
- Should I choose a 5-year CD or invest in bonds for a five-year goal?
- For a known expense in exactly five years, a 5-year CD provides guaranteed principal and a fixed return with no market risk. Investment-grade bonds may offer slightly higher yields but carry price volatility if you need to sell before maturity. If the timing is flexible or you want inflation protection, a mix of I Bonds and a 5-year CD balances safety with purchasing power preservation.
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