If you have $20,000 saved up now, you may be tempted to play the stock market. Returns on the market, historically, are reliable and the potential for making a quick profit or even more than you expected can be appealing now, especially when the economy is in a transition phase with inflation recently rising and high interest rates remaining frozen. On the other hand, if the volatility in the market and the aftereffects of the inflationary climate of recent years are too much to endure, you may find it easier to turn to a fixed-rate savings vehicle instead. 

A certificate of deposit (CD) account could be the perfect account to choose. Interest rates on CDs are fixed, allowing savers to calculate their earnings with precision. And with a $20,000 deposit, the returns could be worth hundreds and potentially thousands of dollars. But today's high rates may not last for much longer and they're already lower than what may have been secured last summer. To better determine the worth of a $20,000 CD now, then, it may help to compare the interest earnings available currently to what was available one year ago. Below, we'll complete the calculations.

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Here's how much interest a $20,000 CD can earn now compared to a year ago

With CD rates being fixed, calculating the future interest earnings is simple to do. And while rates here have declined since last summer, they haven't fallen so significantly to render a CD account ineffective. Here's how much interest a $20,000 CD can earn now compared to a year ago, using advertised rates then and rates from Bankrate that are available now (on the assumption no early withdrawal penalties are issued):

• 3-month CD at 5.50% (2024): $269.50
• 3-month CD at 4.40% (2025): $216.46
• Difference between accounts: The 2024 account earned $53.04 more

• 6-month CD at 6.00% (2024): $591.26
• 6-month CD at 4.40% (2025): $435.26
• Difference between accounts: The 2024 account earned $156 more

• 9-month CD at 5.50% (2024): $819.45
• 9-month CD at 4.40% (2025): $656.43
• Difference between accounts: The 2024 account earned $163.02 more

• 2-year CD at 5.72% (2024): $2,353.44
• 2-year CD at 4.10% (2025): $1,673.62
• Difference between accounts: The 2024 account earned $679.82 more

• 3-year CD at 5.75% (2024): $3,652.18
• 3-year CD at 4.15% (2025): $2,594.76
• Difference between accounts: The 2024 account earned $1,057.42

Comparing the two accounts, one year apart, the difference between earnings is stark. But this shouldn't discourage savers from acting and it should incentivize them to take advantage while the potential returns are still substantial, if not as high as they once were. At the start of the 2020s, rates on CDs were hovering around 1%, so today's rates are still exponentially higher.

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The bottom line

If you're looking for a predictable and guaranteed return on your $20,000, it would be difficult to find a more reliable way to get it than with a CD account now. Rates here have declined over the past years and the interest-earning potential has waned accordingly. But with rates still substantial, returns worth hundreds and even thousands of dollars and the reality of interest rate cuts looming for later in 2025, this could be one of the better ways to protect and grow your hard-earned $20,000 right now.