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Protecting and growing your money is always important, but it’s especially so now for millions of Americans coping with rising inflation and higher borrowing costs. And it’s even more critical for those looking for effective ways to safeguard their retirement funds. Stock market performance has been strong recently, but a major drop earlier this month underlined the volatility of keeping your money fully invested in stocks and bonds. With geopolitical tensions elevated, a high oil price and long-term interest rate projections uncertain now, many may be understandably contemplating a savings strategy shift. That could entail moving a large, six-figure amount like $200,000 out of some volatile investments and into a safe and profitable account like a certificate of deposit (CD) instead.
CDs come with interest rates around 4% or higher now, approximately, and those rates are fixed and will hold until the account matures. With CD terms ranging from as short as three months to as long as 10 years, there’s likely a term that will align with your savings goals while still protecting your principal and growing your interest. And the interest earned on a sizable $200,000 account will be significant, no matter the term you ultimately decide on. So, how much interest can a $200,000 CD account specifically earn if opened now? That’s what we’ll examine below.
Start earning more interest on your money with a high-rate CD account here.
How much interest can a $200,000 CD account earn now?
Thanks to the fixed interest rate on CDs, savers can easily determine their prospective interest earnings. Here’s how much a $200,000 deposit into a CD account can earn now, calculated against the top rates aligned with six different terms and the assumption that there will be no penalties or fees levied against the account:
- $200,000 3-month CD at 3.90%: $1,922.11 upon maturity
- $200,000 6-month CD at 4.10%: $4,058.82 upon maturity
- $200,000 9-month CD at 4.00%: $5,970.49 upon maturity
- $200,000 1-year CD at 4.11%: $8,220.00 upon maturity
- $200,000 18-month CD at 4.15%: $12,578.29 upon maturity
- $200,000 2-year CD at 4.16%: $16,986.11 upon maturity
Savers can earn around $2,000 with a CD account of this size in just three months or close to $17,000 if they keep it in a 2-year CD. While stock market returns, historically, tend to be significantly higher than those outlined above, they’re also much less reliable, and with a CD account, the interest will be guaranteed, while your principal will be protected.
Additionally, CDs are FDIC-insured up to $250,000 per account, giving you ample protection for an account of this size. Just be sure to calculate your returns in advance. It’s also important to understand your limits, as an early withdrawal penalty for savers who take out their money prematurely could be substantial on a CD account of this size.
Learn more about your CD account options here.
The bottom line
Savers can easily earn thousands of dollars worth of interest with a $200,000 CD, and they can do so while protecting their deposit from today’s turbulent financial conditions. So, while not potentially as profitable as a stock investment, this account is still worth serious consideration for savers looking to protect their retirement funds now. And with terms here ranging from months to multiple years, there’s likely an account that fits savers’ needs now while still allowing them to shift their approach as market conditions change.