Is your money stuck in a CD account?

While inflation and interest rates are both lower than they were in recent years, they’re still relatively high right now. Inflation, in fact, has risen in four consecutive months and is now a full percentage point above the Federal Reserve’s target 2% goal. And interest rate cuts, three of which were issued in the final months of 2024, are now on pause. This means that rates will remain high for both borrowers and savers.

If you find yourself in the latter group, you may be contemplating your options by opening a certificate of deposit (CD) account now. While rates on this savings vehicle barely broke 1% a few years ago, they’re exponentially higher in today’s economic climate. To earn that high return, however, savers will need to make a deposit – and keep their money there – for a predetermined period (CD term). But does that mean your money will be stuck in a CD account, perhaps permanently? And is that worth doing? Below, we’ll explain what to know now.

Start by seeing how much money you could be earning with a top CD here.

Is your money stuck in a CD account?

The answer to this question is complex. Technically, yes, the initial money you deposited into a CD account is “stuck” in the account until it matures (it won’t remain in the account indefinitely). But that doesn’t mean you lose total access, as you could always withdraw it early by paying an early withdrawal penalty. Some banks will even offer no-penalty CDs, in which you won’t have to pay a fee to regain access, although those accounts tend to come with much lower interest rates than traditional CDs do. 

Still, while that initial deposit may be stuck until your account hits its maturity date, it doesn’t mean that it’s not growing, either. Thanks to compound interest, which usually gets added to a CD account monthly or quarterly, depending on the length of the CD term, your initial deposit can grow significantly over time. That’s especially true in the interest rate climate of early 2025, when savers can easily secure a CD rate of around 4.50% or higher, no matter the term. 

By shopping around to find the highest CD rate and by being strategic with the amount deposited, savers can still potentially earn hundreds or possibly thousands of dollars in interest with the right CD account now. But they’ll have to forego the access they’ve been accustomed to with their regular savings account to earn that return. And, depending on the deposit, it could take months or even years to earn that result. Still, it will be reliable and predictable thanks to the fixed interest rate CD accounts come with. Compared to the variable rate that traditional savings and high-yield savings accounts have, a CD is especially safe and reliable as it won’t be influenced by market conditions.

So, yes, your money may be stuck in a CD for an extended period of time but if you can afford not having access to that deposit for the full CD term, you’ll generally be rewarded with a healthy return on your money upon maturity, making the sacrifice of temporarily losing access to your funds worthwhile.

Earn more on your money with a CD here now.

The bottom line

While your initial deposit may be stuck in a CD account, the loss of access can be valuable if it results in a significant return on your money. And while giving up access won’t necessarily be easy or enjoyable, the end result of hundreds or even thousands of dollars could easily outweigh any difficulty on behalf of the saver. Consider, then, using a CD rate calculator to better determine your potential earnings and the amount of money you’ll need to deposit to secure that return. You may be surprised at how easy it is to earn a decent return with a CD right now.

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Stephen Collopy

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