If You Have Money in a CD, This Is What You Need to Know About Paying Taxes

There's a lot to love about certificates of deposit. They're low-risk, protected by federal insurance and offer guaranteed returns. But like savings and other deposit accounts, you must pay tax on the interest your CD earns. The government treats interest on CDs and other transaction accounts as taxable income. Read on to learn everything you need to know about paying taxes on your CD investments. Read more: Best Tax Software of 2025 How are CDs taxed? "Interest paid on your CDs will be taxed as ordinary income just like wages when you file your taxes," said Lisa Greene-Lewis, a certified public accountant with TurboTax. That means your CD interest is taxed at your ordinary federal income tax rate based on your tax bracket. Tax rates for the year 2024 range from 10% to 37% and depend on your income and filing status, Greene-Lewis said. When do you pay taxes on a CD? If you earn at least $10 in interest from a CD during a year, your financial institution must report that interest ... Read full article.