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Securing a high interest rate on your savings can make a big difference, especially if you set aside a large amount of cash. This is where certificates of deposit (CDs) can come in handy, as they typically pay more than traditional savings accounts and allow you to lock in a high rate for several months or years. And often, you can earn higher rates for committing to longer terms (though this is less common in falling interest rate environments).
Typically, CD terms range from three months to five years. However, some banks offer terms as long as 10 years. So is it worth keeping your money tied up for a decade in order to lock in a competitive rate?
What is a 10-year CD?
A 10-year CD is a time deposit account with a 10-year term. These accounts offer a fixed interest rate, which means you’re guaranteed to earn the same rate throughout the entire term — as long as you don’t touch the money until the maturity date.
If you must access your money before the end of the term, you’ll have to pay an early withdrawal penalty. These penalties vary by bank but are often several months’ worth of interest. No-penalty CDs do exist, which allow you to withdraw your money early with no fee, but they tend to have lower rates than other CDs.
Read more: What is a no-penalty CD?
Current 10-year CD rates
While 10-year CDs can help you lock in a high rate for quite a while, they probably won’t give you the best rates right now. Here’s a look at some of the top 10-year CD rates available as of Jan. 28, 2025:
While these rates exceed the national average, they generally don’t match the best CD rates currently available. For instance, Synchrony Bank pays a 4.35% APY on its 13-month CD, while Marcus by Goldman Sachs pays 4.30% APY on its 9-month CD. This lets you earn a higher rate without the need to keep your money in a CD for years.
Read more: The best CD rates on the market today
That said, locking in a rate upwards of 4% for 10 years can be appealing. If you have some extra cash and believe rates will continue falling over the next decade, a 10-year CD could be a good opportunity to lock in a high rate of return on your savings while rates remain relatively high.
Still, it’s impossible to predict how interest rates, your cash needs, and the larger economic landscape will change well into the future.
Pros and cons of 10-year CDs
It’s important to understand the pros and cons of 10-year CDs so you can make an informed decision about where to put your money.
Pros
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Rates are usually higher than traditional savings accounts
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Fixed interest rate provides a predictable return
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Minimal risk
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Typically, there are little to no fees to open an account
Cons
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Penalty for early withdrawals
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In most interest rate environments, it is difficult for CDs to keep pace with inflation
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May provide lower returns than other investments
Are 10-year CD rates worth it?
A 10-year CD can provide a safe way to set some cash aside while earning a fixed rate that’s higher than the typical savings account rate. This can make them an appealing option for those with cash to spare, especially when rates are high.
But 10 years is also a long time, and you may not be willing to leave your money in a CD that long. If you are looking for a low-risk account option, but also want to be able to make penalty-free withdrawals as needed, consider these alternatives:
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High-yield savings accounts: These accounts are similar to traditional savings accounts but pay much higher rates. The downside is that rates aren’t fixed, so your APY will likely decrease if the Federal Reserve cuts interest rates.
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Money market accounts: If you want some of the features of checking and savings accounts rolled into one, this could be the right choice. Money market accounts offer comparable rates to high-yield savings accounts but may include features like check-writing and debit cards. However, these accounts tend to come with higher minimum balance requirements.
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Treasury notes: The U.S. sells 10-year Treasury notes, which pay a fixed interest rate every six months until maturity. Terms are 2, 3, 5, 7, or 10 years, with yields similar to those for CDs. You can sell them on the open market if you need money before they mature.
Read more: What is the 10-year Treasury note, and how does it affect your finances?
All savings products have pros and cons, but these options generally allow you to access your money when necessary. Carefully consider the advantages and disadvantages of each before deciding where to put your money.
